Full Court Press: The Legal Questions That Persist After House v. NCAA Settlement Sets $2.8 Billion Payout For College Athletes

On 6 June 2025, Federal Court Judge Claudia Wilken, of the Northern District of California, approved a USD 2.8 billion settlement for the landmark House v. NCAA case which held that the NCAA illegally limited student athletes’ rights to be fairly compensated. This historic agreement fundamentally alters how college sports operate, ending over a century of prohibitions on student athlete compensation while raising new legal complexities around Title IX compliance, athlete employment status, and Name, Image, and Likeness (NIL) enforcement.

The Settlement’s Core Provisions

The settlement resolves a lawsuit filed by Grant House, a former Arizona State swimmer, whose case was combined with two others challenging NCAA restrictions on athlete compensation. The agreement requires the NCAA and Power Five conferences to pay USD 2.576 billion over ten years to former and current Division I athletes, compensating them for past restrictions on NIL opportunities.

More significantly for the future, starting in the 2025-26 academic year, Division I schools that opt into the settlement can share a capped amount of athletic revenue—initially estimated at USD 20 million per institution—directly with athletes. This cap represents approximately 22-22.5% of athletic department revenue from media rights, ticket sales, and sponsorships. NCAA President Charlie Baker has suggested that when combined with scholarships and other benefits, student-athletes at many schools may receive nearly 50% of all athletics department revenue.

NIL Rights Evolution and Enforcement

The settlement represents the culmination of years of legal pressure on NCAA amateurism rules. These protections are not just limited to famous athletes or celebrities but apply to all individuals, with the commercial value of NIL rights becoming especially prominent with the rise of digital media.

EA Sports’ announcement allowing over 10,000 college football players to monetize their NIL by appearing in EA Sports College Football 25 exemplifies this new era, though the USD 600 compensation has sparked debate over fairness. The situation is further complicated by varying age of majority across states, which can range from 18 to 21 years old, requiring careful consideration when contracting with minor athletes.

Employment Status Remains Unresolved

Although Judge Wilken expressly declined to address whether student-athletes are employees under federal or state law, the leading case Johnson v. NCAA, currently on remand to the Eastern District of Pennsylvania, could significantly expand wage-and-hour exposure for Division I schools if athletes are deemed employees. Further complicating compensation structures would be potential obligations for overtime pay, workers’ compensation coverage, unemployment insurance, and collective bargaining rights—transforming athletic departments into employers managing hundreds of employees with varying pay scales across different sports.

Schools should proceed cautiously by reviewing revenue structure to ensure payments are not compensation for services under traditional employment tests and avoiding conditioning payments on performance or hours worked. This is a legal issue that has been raised in the esports industry where the more control a brand exerts—through structured training, codes of conduct, or required appearances—the harder it is to deny that players are employees and not independent contractors.

Title IX Challenges Emerge

The settlement’s approval hasn’t ended legal challenges. A group of eight women filed an appeal on Wednesday, arguing that the back damages portion violates Title IX gender equity requirements. Attorney Ashlyn Hare estimated the current structure “deprives female athletes of USD 1.1 billion,” arguing that schools would have paid male athletes over 90% of revenue as though Title IX didn’t apply. The disparity is best exemplified by EA Sports’ College Football game, which offers NIL payments exclusively to football players while female athletes in sports without comparable video game opportunities receive nothing, highlighting the gender-based economic inequities that Title IX challenges seek to address.

Judge Wilken declined to weigh in on whether payments schools make to student-athletes under the settlement had to comply with Title IX, but noted that if any parties believed a school’s payments violated Title IX, class members would have the right to file suit. This uncertainty creates significant compliance challenges for institutions designing revenue-sharing programs.

New Enforcement Structure

The defendant athletic conferences (ACC, Big Ten, Big 12, SEC and Pac-12) will be responsible for implementing several elements of the settlement, including design and enforcement of the annual cap for financial benefits and launching rules regarding third-party NIL contracts. This new enforcement arm, the College Sports Commission, promises to be quicker and more efficient than the NCAA, analyzing third-party deals worth USD 600 or more to ensure appropriate “market value” for services provided. However, this creates additional legal complexities as schools must navigate potentially conflicting state NIL laws, antitrust concerns over market value determinations, and questions about whether conferences have the legal authority to enforce rules that may conflict with state legislation protecting athlete compensation rights.

Licensing and Image Rights Complexities

In the digital interactive entertainment industry, licensing confirms its pivotal role in allowing both video games production and distribution, and the spreading and strengthening of competitive video gaming phenomenon. Unlike traditional athletes, esports players can be identified using gamer-tags or pseudonyms, with some registering their pseudonyms as trademarks to enhance their negotiating position. These evolving forms of athlete identity raise novel legal questions about intellectual property ownership, the intersection of university trademarks with player-created brands, and how traditional NIL frameworks apply to digital personas and virtual representations in gaming environments.

Looking Forward

As one commentator noted, “The NCAA is experiencing death by a thousand cuts,” with the organization scrambling to find ways to compensate women’s basketball programs while professional athletes assert their rights. NCAA President Charlie Baker acknowledged that with these reforms, “the foundation of college sports is stronger than at any point in years,” as the NCAA can increase focus on fair competition, academics and student-athlete well-being.

The House settlement marks not an ending but a beginning of a new compliance-driven era in college sports. Institutions must now navigate complex legal terrain involving Title IX compliance, potential employee classification, NIL valuation, and revenue-sharing structures. Those treating this transformation as merely a legal development rather than an operational pivot risk falling behind in both competitive recruiting and legal compliance. As college sports enters this unprecedented era of direct athlete compensation, the only certainty is that further legal challenges and regulatory evolution lie ahead.