Judge paves way for colleges to pay athletes directly
Published 11:36 am Monday, June 9, 2025
The ever-evolving world of college athletics will be changing again after a California judge approved the NCAA’s settlement of three antitrust cases, paving the way for schools to be permitted to directly share revenue with athletes.
California judge Claudia Wilken approved the agreement between named defendants in the cases – the NCAA, SEC, Big 10, Big XII and ACC – and the plaintiffs, which included dozens of former student-athletes to settle the consolidated antitrust lawsuits.
“Despite some compromises, the settlement agreement nevertheless will result in extraordinary relief for members of the settlement classes,” Wilken said in her ruling. “If approved, it would permit levels and types of student-athlete competition that have never been permitted in the history of college sports, while also very generously compensating Division I student-athletes who suffered past harms.”
This settlement will not only pay thousands of dollars to former athletes – that played from 2016 through 2014 – but will allow schools to directly compensate athletes in a system that will feature an annual cap and will have a new enforcement entity that is expected to more heavily scrutinize booster-backed payments.
Schools will be allowed to begin distributing actual paychecks to student-athletes beginning July 1. The enforcement entity, College Sports Commission, also immediately takes effect.
“This is new terrain for everyone. Opportunities to drive transformative change don’t come often to organizations like ours,” NCAA President Charlie Baker said in a statement. “It’s important we make the most of this one. We have accomplished a lot over the last several months, from new health and wellness and academic requirements to stronger financial footing. Together, we can use this new beginning to launch college sports into the future, too.”
Any new contract struck between athletes and a third-party entity – using Name, Image and Likeness (NIL) – will be subjected to the new NIL clearinghouse. The clearinghouse, NIL Go, will be charged with evaluating NIL deals between athletes and third parties to determine their legitimacy.
Contracts that were signed before the settlement approval – and paid out before July 1- are not subject to the clearinghouse or the cap. The cap is projected to be a total $20.5 million in year one, July 2025 through June 2026, with schools permitted to share up to a certain amount of revenue annually with their athletes. The cap is calculated by taking 22 percent of the average of certain power school revenues.
Each school will determine how to distribute the funds, with most seemingly planning to distribute nearly 90 percent to football and men’s basketball. Generally, football and men’s basketball are the only revenue-generating sports within athletic departments around the country.
Along with this new revenue-sharing model will come new contracts. The contracts will grant schools permission to use a player’s NIL rights but will also include buyouts, athlete requirements and prohibitions.