The End of “Amateurism” in College Sports

A federal judge has approved a landmark $2.8 billion antitrust settlement that fundamentally changes how college athletes are compensated. The settlement – stemming from the House v. NCAA case – effectively ends the NCAA’s 119-year amateurism model by allowing, for the first time, direct revenue-sharing payments from schools to student-athletes. NCAA President Charlie Baker hailed the deal as “a pathway to begin stabilizing college sports” under a new framework of payments and rules. One of the athlete plaintiffs, Sedona Prince, called it “historic... going to change millions of lives for the better”. Starting July 1, 2025, every Division I college can choose to pay its athletes a share of sports revenue, shredding the last vestiges of the old amateur model that forbade such payments.

Major changes introduced by the settlement include:

• Revenue Sharing with Current Athletes: Schools may pay current players up to a fixed annual amount (starting at $20.5 million per school in 2025-26) as salary-like compensation in addition to scholarships. This cap will rise by at least ~4% each year over the 10-year settlement period. For context, $20 million is roughly 22% of the average Power Five athletic department’s annual revenue. These payments begin in July 2025 and mark the first time colleges can directly pay athletes for their participation.
• Back Payments for Past Players: The NCAA and its co-defendants will also pay about $2.7–$2.8 billion over the next decade to athletes who played between 2016 and 2024, compensating them for the name, image, and likeness (NIL) opportunities they missed under the old rules. This retroactive payout will be distributed to hundreds of thousands of former athletes (with football and basketball players likely receiving the largest shares) as relief for past restrictions.
• Replacement of Scholarship Limits with Roster Limits: In exchange for allowing revenue sharing, the settlement lets teams offer scholarships to every player on the roster – a break from decades-old scholarship caps (e.g. the 85-scholarship limit in FBS football). However, new roster size limits will cap the total number of players on each team (for example, football rosters will be limited to 105 players). This trade-off raised concerns about thousands of walk-ons losing roster spots. In fact, initial estimates suggested nearly 5,000 athletes across all sports could be cut due to the new limits. Judge Claudia Wilken delayed approval until the parties agreed to “grandfather” in current players: no existing athlete will lose their place mid-career because of the roster cap; schools can temporarily exceed the new limits until current players finish their eligibility. Going forward, though, teams must abide by the roster maximums, meaning fewer walk-on opportunities in some sports in exchange for more full scholarships for those who do make the team.
• Direct Pay for Play (Not Employment): The settlement formally sanctions pay-for-play in college sports, but preserves athletes’ status as non-employees for now. Schools will issue the payments through contracts (potentially seven-figure deals for star players), treating athletes akin to independent contractors rather than employees. This distinction is critical – and possibly contentious – because it avoids immediately triggering employment benefits or collective bargaining, even as athletes begin to receive substantial income for their athletic services.

The result of this settlement is nothing short of a seismic shift in the college sports landscape. It simultaneously resolves three related lawsuits (House v. NCAA, Carter v. NCAA, and Hubbard v. NCAA) that challenged NCAA compensation limits. College sports at the Division I level will now operate under a dramatically different model – one that experts say “permits levels and types of student-athlete compensation that have never been permitted in the history of college sports”, according to Judge Wilken’s order. The once “unthinkable” concept of paying college players directly is becoming reality, bringing new opportunities along with new uncertainties.

Key Provisions of the Settlement – At a Glance

The approved settlement introduces a complex framework of rules and caps. Below is a summary of its key provisions and financial terms:

• Annual Revenue-Sharing Pool: Each Division I school may share up to $20.5 million with its athletes in 2025-26, across all sports. This cap is expected to increase by at least 4% each year for the 10-year span of the agreement, potentially reaching around $32–33 million per school by the mid-2030s. Schools are not forced to spend the full amount, but the cap represents the maximum they can distribute to players annually.
• Division of Funds by Sport: Schools have discretion in how to allocate their athlete salary pool among sports, though most plan to concentrate funds on the revenue sports. A common approach (mirroring the settlement’s back-pay formula) is roughly 75% of the money to football players, 15% to men’s basketball, 5% to women’s basketball, and 5% to all other sports. For example, at a Power Five school using the full $20.5 million cap, about $15 million (over 70%) might go to football alone. However, these ratios aren’t mandated – some schools might choose different breakdowns (e.g. a basketball-centric school could devote more to hoops). Notably, non-football Division I programs (like those in the Big East) could now funnel their entire pool into other sports, potentially gaining a competitive edge in basketball or other championships. How Title IX gender equity requirements will figure into these allocations remains a bit unclear, but at least a portion of funds is expected to go to women’s sports in order to ensure fairness.
• Ten-Year Injunctive Term: The revenue-sharing system is locked in for 10 years under the court-approved deal. During this period, NCAA Division I rules will be amended to accommodate these payments, and schools that opt in must abide by the settlement’s terms. (Originally, had the NCAA lost at trial, the financial exposure was estimated around $20 billion – so the negotiated 10-year, $2.8B settlement was seen as a compromise that all parties could live with.) After a decade, new negotiations or legal actions might be needed to determine what comes next.
• Opt-In Participation: All of the Power Five conference schools (ACC, Big Ten, Big 12, SEC, and the diminished remnants of the Pac-12) are required to opt in to this revenue-sharing model. Other Division I schools (including Group of Five conferences, mid-majors, and even Division I FCS programs) may choose to opt in by a June 15, 2025 deadline if they agree to follow the new rules. Any school that opts in will be bound to the settlement’s provisions and allowed to make these payments. In practice, most Power Five universities have affirmed they will pay the full amount to remain competitive, while a number of smaller-budget schools are expected to forego or limit participation due to the cost. (For instance, the American Athletic Conference – a Group of Five league – has set a more modest target of about $10 million in athlete revenue-sharing over the next three years for its member schools, far below the Power Five’s $20 million per year pace.) Importantly, if a school chooses not to opt in, it would not be protected by the settlement’s antitrust safe harbor – but it also wouldn’t have to pay the new salaries, at the likely peril of falling behind in recruiting.
• Funding the Back-Pay Settlement: To finance the $2.7–2.8 billion in back payments to former athletes, the NCAA and conferences will pool resources. The Power Five conferences are covering roughly 60% of that cost, while the NCAA and the rest of Division I (i.e. other conferences) cover the remaining ~40%, largely by taking reduced NCAA revenue distributions over the next decade. In other words, part of the money that would normally flow from the NCAA to all Division I schools (from March Madness TV contracts and such) will be redirected to the settlement fund. This means even schools that don’t opt in to pay current players will indirectly contribute to the payouts for past players (through smaller annual distributions from the NCAA).
• New Roster Limits (with Scholarships for All): The settlement created fixed roster caps in every NCAA sport – a significant change from the old system of scholarship limits. For example, FBS football rosters will max out at 105 players, men’s basketball at 13, women’s basketball at 15, baseball at 40, etc., covering all 43 Division I sports. Critically, any player on the roster can now receive a full scholarship, even if they previously would have been a walk-on. This should increase the number of athletes on full rides (a win for those who make the team) but also eliminates some walk-on positions in sports that used to carry very large rosters (for instance, many track, rowing, or swimming programs will shrink in headcount). To prevent unfair cuts, the deal allows schools to “designate” current athletes to stay above the roster limits until they graduate, so no one already on a team in 2024 loses their spot solely because of the new rule. However, as new athletes cycle in, teams will adjust down to the capped sizes. The intent is to balance opportunities: more scholarships (hence more financial support) for those on the team, at the cost of fewer total roster slots available.
• Enforcement and NIL Regulations: Alongside allowing payments, the settlement imposes strict regulations on outside booster/NIL deals to prevent pay-for-play abuses. A new, independent enforcement entity called the College Sports Commission (CSC) will oversee and enforce both the salary cap and NIL rules, taking over duties that used to belong to the NCAA’s enforcement staff. The CSC will be run by the Power Four conferences (SEC, Big Ten, Big 12, ACC) as a separate organization empowered to investigate violations and levy punishments. In fact, the power leagues have already hired a CEO for the commission – former MLB executive Bryan Seeley – to build out its compliance operations. One major task is creating an NIL clearinghouse (“NIL Go”) in partnership with Deloitte, the consulting firm. All endorsement deals above $600 must be submitted to this clearinghouse, which will evaluate whether the payment reflects a legitimate “fair market value” for a real sponsorship or job. Deals judged to exceed fair market value (i.e. suspect deals that look like disguised recruiting inducements) can be flagged for neutral arbitration or even vetoed. If a booster or athlete tries to circumvent these rules – for example, by proceeding with an inflated deal that was disapproved – the new enforcement body can punish both the school and player, with penalties ranging from fines to loss of eligibility. These measures aim to curb the wild-west booster spending that exploded in recent years, bringing more uniformity and oversight to NIL money now that schools themselves will also be paying athletes.
• Timeline for Implementation: The changes roll out on a tight timeline. The NCAA’s Division I Board has already passed about 150 new rule amendments (in April 2025) to align its bylaws with the settlement, contingent on Judge Wilken’s approval. With that approval now granted in June, the new rules take effect immediately. Key dates: by June 15, 2025, non-defendant schools must decide whether to opt in to the revenue-sharing system; on July 1, 2025, schools can start issuing the first direct payments to athletes; and starting with the 2025-26 season, teams must comply with roster limits (with fall sports required to trim rosters by the start of competition, except for grandfathered players). The College Sports Commission is being set up over the summer of 2025, and its NIL clearinghouse (“NIL Go”) is slated to launch by June 11, 2025 – meaning schools and boosters will soon have to submit contracts for approval. It’s a rapid pivot, and college administrators are scrambling to have the infrastructure in place within weeks.

These provisions collectively represent a sweeping overhaul of how college sports operate. Football and basketball stars at big schools stand to gain significantly (some star quarterbacks are already signing contracts worth over $10 million in NIL deals alone), while thousands of walk-ons and athletes in non-revenue sports worry about their future roster spots. The NCAA’s role in policing pay is shrinking as the conferences take the helm. And an influx of money will now officially flow to players, reshaping everything from recruiting to program budgets.

Power Five vs. Group of Five: A Widening Resource Gap

One of the biggest questions raised by this settlement is how it will impact smaller athletic programs – especially the Group of Five (G5) conferences and other mid-major schools – in comparison to the wealthy Power Five (P5) programs. The new rules allow each school to spend up to eight figures on athlete compensation, but not every school has the means to do so. This threatens to widen the already large financial gap between the haves and have-nots of college sports.

Power Five advantages: The Power Five conferences (now effectively a “Power Four” after realignment upheavals) enjoy massive television contracts and revenue streams. Most of these schools are prepared to invest the full ~$20 million (or close to it) per year into paying players, treating it as the new price of doing business to recruit and retain top talent. In fact, administrators expect that “most Power 4 schools” will direct at least $15 million of their yearly pool just to football players alone. The high-resource programs can afford to max out athlete salaries without drastically cutting elsewhere – their overall athletic revenues often exceed $150–200 million annually at the richest schools, making a $20 million payroll plausible. These universities also tend to have robust donor support and booster collectives that were already paying players via NIL deals; now that energy (and money) will likely flow through official channels. The settlement essentially formalizes what was already happening under the table or via third-parties at top programs, giving schools more control. As one observer noted, this will lead to “high-stakes and expensive recruitment of stars” destined for pro leagues, as the biggest colleges devote much of their bankroll to signing and keeping blue-chip player.

Group of Five challenges: For smaller-budget FBS programs (e.g. those in the American Athletic, Sun Belt, Conference USA, MAC, and Mountain West conferences), the new mandates pose an existential financial challenge. Many G5 athletic departments operate on budgets that make a $20 million player payroll prohibitively expensive – in some cases, $20 million approaches their entire annual athletics revenue. For example, in Louisiana, only LSU (an SEC school) has an athletics budget over $30 million; most other Division I schools in the state bring in only a half or a third of that amount. “There are programs at the G5 level where $20 million in revenue sharing would nearly eclipse their entire department revenue for the year,” one analysis noted. The resource gap has been growing for years – in 2005, the average power-conference football program made about $10.9M annually vs. $4.4M for the average Group of 5 program, but by 2022-23 that gap had exploded to over $30 million more per year for power schools. Now, with power schools poised to spend millions more on player pay, G5 coaches doubt they can “ante up” anything comparable. As one ESPN report bluntly summarized: in this new era of revenue sharing, it’s “doubtful many Group of 5 schools will be able to ante up with anything comparable to a Power 4 school”.

The practical effect is a risk to competitive balance. If some schools can pay each football starter hundreds of thousands of dollars, while others can only afford (or choose) to pay little or nothing, the talent will flow to the money. College sports already had an arms race in facilities and coaching salaries – now there is an arms race in paying players directly, and not everyone can keep up.

• Recruiting and retention: Group of Five coaches are already witnessing an acceleration of talent drain to the Power conferences. With the one-time transfer rule and transfer portal, it has become easy for a star at a smaller school to jump to a bigger program. Now, the financial incentive to do so is even higher. Coaches from multiple G5 teams reported that the money required “just to retain the bulk of their starters” has doubled or tripled recently. Even so, some schools simply cannot match what players are being offered elsewhere. For instance, after a solid season in 2024, the University of New Mexico saw its starting quarterback, top wide receiver, starting running back, and best offensive lineman all transfer to Power Four programs, because New Mexico couldn’t come close to the lucrative deals on the table at bigger schools. “In nearly every case, it was clear there was no way to retain them,” said former UNM coach Bronco Mendenhall of those departures. G5 coaches fear this scenario will become common: any breakout player at a mid-major will quickly be poached by richer teams able to offer an NIL deal or salary package the original school can’t afford. “The more you win, it makes it easier for every other school to recruit your roster,” observed Boise State coach Spencer Danielson – meaning whenever a G5 develops a star or achieves success, it essentially puts a target on their players for poaching.
• Pressure on budgets: Smaller programs that do attempt to pay players must find new revenue or make hard cuts. Coaches at the G5 level are increasingly required to fundraise to fill the gap. Northern Illinois head coach Thomas Hammock said it’s become nearly impossible to focus solely on coaching because from January to June he spends a huge portion of his time raising money instead. Several Group of 5 head coaches have even left their positions (sometimes taking lesser roles at bigger schools) because they grew weary of the constant chase for dollars to keep the program competitive. “I worked a whole lot of hours... and in this era... I was going to have to do more next year and the next year,” said Jerry Kill, who retired from New Mexico State and hinted that the ever-“bigger and bigger” financial grind was a factor: “there was no way I could do it” long-term. Some coaches have half-jokingly cited “losing the free coffee in the office” as a last straw in penny-pinching athletic departments. It illustrates how razor-thin the margins are for many G5 schools – they worry how they can possibly carve out millions for player salaries without either massive new income or painful austerity moves.
• Innovation and external help: Group of Five conferences are scrambling for creative solutions to generate revenue. New revenue streams are being explored, from selling naming rights to entire conferences or putting more advertising on jerseys, to seeking private investors or even state government support. In Louisiana, for example, lawmakers this spring considered bills to direct public funds and tax breaks toward college athletics. One proposal would dramatically hike the tax on sports betting and funnel 25% of those gambling revenues (roughly $30 million a year) into a fund for the state’s college athletic programs – benefiting schools like Louisiana, ULM, Louisiana Tech, and others alongside LSU. The idea came from recognition that “the need is so high” for funding in this new environment, even “just to be competitive in recruiting,” as one lawmaker put it. Similarly, the American Athletic Conference’s commissioner Tim Pernetti has talked about setting a minimum required revenue share for athletes in his league and finding unconventional revenue sources to support it. “The money doesn’t just fall out of the air,” one conference official said, emphasizing that conferences feel a responsibility to help smaller schools find new income.

Despite these efforts, many administrators acknowledge there is no realistic way for most mid-majors to fully match the player compensation of a Power Five peer. “Everyone is trying to figure out the maximum investment to have success,” said one Group of 5 athletic director, “The hard part is, it creates some gaps in what some institutions will do versus others.” In plain terms, some schools will simply spend vastly more on players than others. That gap could translate into a growing competitive divide on the field.

Some optimists in the Group of Five believe they can still carve out a niche by emphasizing things money can’t buy, like a tight-knit culture or developing overlooked players. “Bigger schools can offer money... But [we] can offer relationships, growth and development,” NIU’s coach Hammock said, hoping that some recruits will prioritize those aspects. Boise State’s staff, for instance, pitches that players “can have it all” at Boise – maybe not the absolute biggest paycheck, but a chance to win, become a star, and still get compensated decently. Indeed, Boise State has managed to retain a top running back, Ashton Jeanty, in part by rallying donor support, showing that a few well-supported G5 programs can keep some of their talent. However, Boise is more the exception than the rule, as it has a strong football brand and booster base built over decades as a top mid-major.

For the many others, the coming years may force tough decisions: Do they stretch their budgets (taking on debt or reallocating funds from other sports) to pay football and basketball players and remain competitive? Or do they accept a new status as something akin to a “feeder system” for bigger programs, focusing on developing players who might later transfer up? The settlement has accelerated an ongoing stratification in college sports. As one FBS athletic director summed up, “There’s seemingly no feasible way to come up with the cash to match what bigger schools will spend.” The competitive balance concern is that the rich will get richer, while schools that cannot afford this revenue-sharing may fall further behind on the field.

Can They Afford It? G5 Financial Pressures and Competitive Balance

The financial pressures on Group of Five schools deserve a closer look, as they highlight potential ripple effects on competitive balance and even on the survival of some sports programs. Here are a few specific challenges and considerations facing the smaller programs in this new paradigm:

• Budget strain and trade-offs: To pay athletes significantly, many G5 schools will have to either increase revenue or cut costs (or both). Increasing revenue might involve raising ticket prices, seeking new sponsorships, intensifying fundraising from boosters, or lobbying for state support as noted above. Cutting costs could mean reducing spending on facilities, support staff, or even cutting some sports teams altogether – a scenario some fear could happen if athletic departments are forced to reallocate limited funds to the football payroll. University leaders insist they remain committed to broad-based sports offerings; “Carolina remains committed to providing outstanding experiences and broad-based programming to student-athletes,” said North Carolina’s AD Bubba Cunningham when asked about the coming changes. But if revenues don’t keep up, that commitment will be tested. Olympic sports (like swimming, track, gymnastics), which don’t generate profit, might be at risk at schools that must tighten belts to afford football and basketball salaries. The settlement explicitly ensures current athletes in those sports won’t be cut immediately, but it can’t guarantee what schools decide to do in the future with sponsorship of non-revenue teams. This tension – between paying a few high-profile athletes vs. funding a broad sports program – is a core challenge of the new model.
• Arms race in incentives: With different resource levels, the concept of competitive equity takes a hit. The original intent behind NCAA amateurism rules was (theoretically) to keep richer schools from simply buying up all the talent. Now that pay-for-play is allowed, albeit capped, schools will try to maximize their appeal. Some Power Five programs might quickly hit the cap and still have boosters eager to spend more. Meanwhile, some G5 programs might only muster a few million dollars total for all athletes. That raises questions: Will a $20 million cap truly rein in the most deep-pocketed programs, or will they find ways to push additional benefits to players? And conversely, will a minimum spending requirement or expectation emerge for those who want to compete at the FBS level? (The AAC’s plan for a $10 million/3-year commitment is one early example of trying to set a floor.) If schools choose not to invest in athletes, they could be effectively choosing to compete at a lower tier. There is even speculation that some schools might eventually drop out of Division I football if the financial pressures grow too intense – similar to how a few universities in the past have downgraded or eliminated football when costs soared. While no school has announced such plans yet, leaders are certainly calculating how to balance these new expenses.
• Uneven playing field and postseason access: The talent concentration at top-paying schools could lead to more lopsided competition. This comes at a time when the College Football Playoff is expanding, and debates already rage about how many guaranteed playoff spots (if any) the Group of Five should have. If G5 champions cannot field teams anywhere near as strong as the top Power Five teams because of resource disparities, it may fuel arguments to reduce their access to major bowls or playoffs. G5 representatives, like Mountain West commissioner Gloria Nevarez, stress that “as long as [the] expanded CFP has access” for their teams, they can remain relevant. But if the competitive gap widens (e.g. more G5 teams getting blown out in postseason games), that access could be politically threatened by power schools who feel they’re “leaving money on the table” by including less marketable teams.

In summary, Group of Five programs face an uphill battle. They must get creative and perhaps redefine success in the new landscape. While the revenue-sharing settlement is a huge win for athletes, it presents a daunting new expense for schools that don’t have massive TV contracts to lean on. As the CEO of the College Football Playoff, Bill Hancock, said of the broader changes, “It remains to be seen how this will impact the future of inter-collegiate athletics.” In the near term, the likely effect is the rich conferences consolidating even more talent and influence – unless the G5 can find unexpected ways to bridge the financial gap.

Future Legal Battles: Employment Status, Unionization, and New Lawsuits

It’s important to note that this settlement, while resolving certain claims, does not end the legal battles over college sports compensation. In fact, many experts believe it will open the door to new lawsuits and challenges on multiple fronts. Here are some of the potential legal developments on the horizon:

• Employment status of athletes: A looming question is whether college athletes should be legally considered employees of their universities. The settlement pointedly avoids calling them employees – players will be paid but not given employee benefits or allowed to unionize under the deal. However, this may not settle the matter. There are ongoing efforts outside this case that could force the issue:
  • The National Labor Relations Board’s General Counsel has taken the position that certain college athletes (at private universities) are employees under federal labor law, and a case involving athletes at USC is in progress to test this classification. If the NLRB or courts eventually recognize athletes as employees with the right to unionize, it could upend the current model by enabling collective bargaining for college players.
  • A lawsuit known as Johnson v. NCAA (a separate case in Pennsylvania) is seeking to have athletes treated as employees under the Fair Labor Standards Act (for minimum wage/overtime purposes). That case is working through appeals and could have major implications if successful – potentially requiring schools to pay athletes as hourly workers, which conflicts with the current “grant-in-aid plus stipend” approach.
  The House settlement did not resolve these issues, and even explicitly, “questions about whether athletes should be considered employees … remain unanswered.” NCAA President Charlie Baker has been candid that he fears an employee model – he and many university leaders argue that treating students as employees could destroy the collegiate sports system, in part because schools would have to pay salaries far beyond the settlement caps and might face collective bargaining over everything from salaries to practice hours. Baker is lobbying Congress to intervene and codify that athletes are not employees, but until that happens (if it ever does), the door is open for legal actions on this front.
• Antitrust and the salary cap: The settlement imposes what is essentially a salary cap (the $20.5M per-school limit) on athlete pay. In professional sports, caps are only legal because players have unions that agree to them in collective bargaining – otherwise a cap would be a form of price-fixing among competitors (the teams). In college sports, there is no players’ union (yet), so the only thing protecting this cap from antitrust attack is the settlement itself (the plaintiffs agreed to it as a compromise). If a group of athletes down the line believe the cap is artificially suppressing their market value, they might challenge it in court once the settlement period nears its end – or even sooner, if some aspect of the deal is violated. Some insiders predict that “the settlement is expected by many in the legal community to draw additional lawsuits challenging parts, or all, of the issues it addresses”. In other words, we might see legal challenges to the new pay rules themselves. Already, there is chatter that certain booster groups or even state lawmakers might challenge the NIL restrictions as unfair restraint of trade. Additionally, at least one new case, Fontenot v. NCAA, has been cited as a “notable example” of ongoing litigation – it reportedly challenges limitations on direct compensation based on athletic performance(perhaps arguing for incentive pay or performance bonuses beyond what the settlement provides). How that differs from what was just settled is yet to be seen, but it underscores that the legal battles are far from over.
• Federal legislation and antitrust exemption: The NCAA’s leadership is pursuing a political solution in Congressto solidify the new model and shield it from further antitrust challenges. They are asking for a limited antitrust exemption that would permit things like salary caps or transfer restrictions in college sports without courts striking them down. They also want federal law to preempt the patchwork of state NIL laws (discussed more below) and to definitively declare college athletes are not employees. There have been hearings and proposed bills over the past couple of years, but as of mid-2025 no law has passed. The settlement’s backers hope that now, with a system in place that gives athletes more money, Congress might be more sympathetic to “safe harbor” protections so that this system isn’t upended by another antitrust suit. However, if Congress fails to act, the NCAA and schools remain vulnerable to legal attacks on any rules that limit athlete compensation or movement.
• Unionization efforts: Even absent a legal mandate, we may see grassroots unionization attempts by players. This could happen on a school-by-school or conference basis. For example, football players at a particular university could attempt to form a union and demand collective bargaining. The NLRB’s stance will matter here (it only covers private schools under federal law; public school athletes would have to use state labor laws). A successful unionization could force negotiation of terms like revenue shares beyond the cap, health insurance, long-term medical coverage, and so forth. The current settlement doesn’t address those broader benefit issues, focusing only on pay and scholarships. Some observers think the momentum from this win (revenue sharing) could embolden athletes to organize for more. On the other hand, giving athletes a significant share of revenue might dampen the urgency to unionize for some – if players are satisfied with the new money and fearful that pushing for employee status could lead to roster cuts or other trade-offs, they might hold off. It’s an open question, and likely to differ by school and sport.
• State law conflicts and more NIL litigation: Another source of potential legal friction is the mismatch between the settlement’s uniform rules and the various state laws on NIL and athlete compensation. Currently, states like Texas, Oklahoma, Missouri, and others have passed laws granting schools or boosters broad leeway in facilitating NIL deals, some even prohibiting the NCAA or conferences from penalizing certain NIL activities. If a state law says a booster can do X, but the new College Sports Commission rules say X is a violation, we might see a court battle over which prevails. It could be argued that the settlement (a federal court order) should override state laws for those who opt in, but state legislators could amend laws or sue on behalf of state universities. “States still have separate laws regarding how NIL can be doled out, which could lead to legal challenges,” the AP noted. The NCAA and conference officials desperately want a single federal standard to avoid such conflicts. In the meantime, expect lots of lawyers poring over state statutes and the settlement terms to identify any loopholes or points of contention.

In essence, while the House settlement is a major milestone, it is not the final word on the collegiate model. “What the settlement does not solve is the threat of further litigation,” wrote one analysis plainly. Whether it’s antitrust, labor law, or state regulatory issues, the next few years could bring new court cases. The NCAA’s hope is to get ahead of this by working with lawmakers (there’s even talk of a Presidential Commission on college sports, involving people like former coach Nick Saban, to recommend solutions). But if those efforts falter, the “barrage of legal challenges” that has rocked college sports in recent years will likely continue. One wry takeaway from Justice Kavanaugh’s concurring opinion in the 2021 Alston Supreme Court case was practically an invitation for lawsuits challenging any remaining athlete compensation limits. The House settlement answered some of that call, but further economic and legal shifts (like collective bargaining or free agency in college sports) may still be on the horizon.

Critical Questions and Potential Loopholes in the New System

As college sports enter this unprecedented territory, there are several critical questions and possible loopholes that athletes, schools, and regulators are already pondering. While the settlement lays out a structure, the real-world implementation may expose gaps or invite attempts to game the system. Here are a few of those concerns:

• Will schools try to skirt the $20 million cap? It didn’t take long for cynics to ask: might wealthy programs find ways to effectively pay more than the allowed cap to gain an edge, despite the new enforcement? One obvious avenue was through booster-funded NIL deals – essentially, keep doing what schools were already doing via collectives, but perhaps in a more coordinated way. The settlement anticipated this by beefing up NIL oversight: every sizable deal must go through the “NIL Go” clearinghouse for fair-value approval. This makes blatant overpayments harder; a booster can’t just give a star quarterback $1 million for a token autograph session without auditors flagging it. However, some loopholes or gray areas could remain. For instance, determining “fair market value” is tricky – a truly famous college athlete might genuinely command high endorsement fees. A local business owned by a booster might justify paying an athlete a hefty sum if, say, that athlete’s social media reach or celebrity brings real marketing value. Schools could exploit this by channeling booster money into legitimately structured deals (e.g. star players doing bona fide commercials, appearing on billboards, etc., which can be valued quite high). As long as they can pass the smell test, those deals would augment the athletes’ income beyond the cap. The new enforcement group will have to draw lines and possibly battle over edge cases in arbitration. Some worry that the richest schools will still manage to provide extra benefits on top of the capped amount – if not cash, then lavish perks, alumni job promises, etc. It’s worth noting that many booster collectives scrambled to sign athletes to big NIL deals in the months before the settlement took effect (before July 1, 2025) precisely to avoid the new scrutiny. That suggests a potential short-term loophole: contracts signed prior to implementation might not face the same oversight, allowing some players to bank large sums outside the new system (at least until those deals expire).
• Enforcement and compliance questions: The establishment of the College Sports Commission is an attempt to create a strong enforcement regime, but it remains to be seen how effective it will be. The CSC will have to hire investigators and define penalties. If a powerhouse program is caught willfully circumventing the cap or NIL rules (say, by funneling money through a third party or misreporting contracts), what will the punishment be? A fine might not be a deterrent if the competitive stakes are high. Can the CSC suspend a program from postseason play or hit them where it hurts? These questions will determine whether schools take the rules seriously or treat violations as a cost of doing business. “Many sources in college sports have doubts about whether the limit on booster spending will be effective… Some believe the rule will spur new lawsuits,” ESPN reported. Indeed, if a school gets penalized, you might see litigation challenging the authority of the CSC or the interpretation of “fair value.” In short, will the policing have teeth, and will it hold up under legal scrutiny? NCAA enforcement in the past was often slow and inconsistent; the leagues hope a more focused body can do better, but it’s untested.
• Potential for creative circumvention: Schools might also explore indirect ways to reward athletes outside of direct payments. For example, could a university boost the value of a scholarship by covering things beyond tuition, room, and board? The Alston decision already allowed schools to give academic achievement awards up to $5,980 per athlete per year – presumably that will continue on top of the new pay. Schools might give athletes other benefits: better housing, extra grad school funding, family travel stipends, etc. If those aren’t counted in the cap, they become a way to spend on athletes beyond the limit. The NCAA’s 150 new rule changes likely try to define what counts as compensation under the cap, but any ambiguity could be exploited. Another area is employment by the university in non-athlete roles – for instance, could a school “hire” a star player as an intern in the campus marketing department for $50,000/year, separate from their athlete stipend? If not explicitly barred, that could be a loophole (though such maneuvers might fail the smell test and invite NCAA or legal blowback).
• Title IX and gender equity: A major unresolved question is how these new payments will comply with Title IX, the federal law requiring gender equity in educational programs (including athletics). Title IX doesn’t require equal spending on men’s and women’s sports, but it does require equal treatment and benefits for male and female athletes. If schools give all the football players hefty salaries but give women athletes only a token amount, could that be deemed inequitable treatment? Schools will argue the payments are tied to revenue generation, not gender, but Title IX lawyers may see it differently if the disparity is stark. At minimum, to be safe, many schools will likely ensure female athletes receive some portion of the new benefits (for example, the settlement’s inclusion of women’s basketball in the formula, and possibly some share to other women’s sports). It’s conceivable that schools may set aside a percentage of the revenue-sharing pool for women’s teams to preempt Title IX complaints. If they do not, legal challenges on gender grounds could arise. The settlement doesn’t spell out Title IX compliance, so colleges must navigate that on their own, and it’s a critical question hanging over the implementation.
• Opt-outs and competitive carve-outs: What happens to schools that choose not to opt in to the settlement’s revenue sharing? This is a bit of a wildcard. If a handful of FBS programs (or entire conferences) decide they simply can’t afford it and don’t opt in, will they become second-class citizens in Division I? The NCAA isn’t forcing every school to pay – it’s voluntary outside the Power Five – but market forces might force their hand. One could imagine, for example, some smaller FBS schools saying, “We’re going to treat ourselves like FCS; we won’t pay, we’ll focus on traditional scholarships.” That might save money, but how will they recruit against teams offering paychecks? Perhaps those schools might end up dropping to a lower competition level or reorienting to a different model (some have floated the idea of a split in Division I – where the top tier are essentially professionalized and the rest are more traditional). It’s too early to say, but the settlement by design allows some flexibility. The opt-in is on a yearly basis, meaning a school could try one year paying athletes and the next year decide not to, or vice versa. This could create turmoil if not managed – imagine a school opting in one year to attract a recruiting class and then opting out later (those athletes would suddenly lose their expected salaries unless they transfer). The governance around opt-in/opt-out will be important, and we might see rules or pressure to discourage flip-flopping. This could also be a loophole: a school that’s rebuilding might opt out to save money, then opt in when they’re ready to compete, effectively timing their spending strategically. The settlement didn’t fully detail how that will be handled publicly, and it’s something to watch.
• Loopholes in back-pay distribution: While not as contentious, the distribution of the $2.8B to former athletes will be a massive undertaking. There could be disputes or confusion about who gets how much. The settlement likely outlines a formula (with football and men’s/women’s basketball getting the bulk). But athletes will have to register to receive their payments. One could imagine issues like athletes who transferred – do they get shares from multiple schools’ pools, or just one? Or athletes who might have violated NCAA rules in the past – are they eligible? These aren’t so much loopholes as logistical challenges, but they will need to be ironed out by the administrators of the settlement fund.
• Long-term sustainability and “loophole” of time: Finally, a broader question: is this model sustainable, or is it a stopgap that schools will try to “ride out” for ten years? The settlement essentially freezes the system in a compromise state for a decade (with annual increases). After that, if no further agreement or law intervenes, the “no cap” world could come roaring back via antitrust (absent an exemption). One might view the 10-year term as a kind of loophole in itself – perhaps the NCAA is banking that within that time, they’ll secure a Congressional solution or a new collective bargaining mechanism with players to replace the settlement. If not, when the settlement expires, the system could be challenged again. Universities might be planning under the surface for a more radical change (like forming a new breakaway league or lobbying for Olympic-style amateur definitions) by the time this deal runs out. So while not a loophole per se, the temporary nature of the truce is noteworthy. As one college sports attorney put it, the settlement “marks a new beginning for Division I student-athletes and for the NCAA”, not an endpoint. It buys time, but it doesn’t guarantee peace forever.

In conclusion, the NCAA’s newly approved antitrust settlement represents a historic shift toward compensating college athletes with a share of the billions in revenue they help generate. The major changes – from direct pay to roster management – aim to address past inequities and bring more order to the chaotic NIL era. Yet they also raise big questions about fairness across schools, the sustainability of smaller athletic programs, and the possibility of future legal upheavals. College sports are essentially entering uncharted territory: the long-held amateurism model is gone, replaced by something akin to a semi-professional framework unique to the college context.

As NCAA President Charlie Baker wrote in his open letter, “This is new terrain for everyone… Opportunities to drive transformative change don’t come often… It’s important we make the most of this one.” Stakeholders from university presidents to coaches to athletes themselves will be feeling their way through this transition. Will it truly “stabilize” college sports as intended, or simply usher in a new era of turbulence?

What’s clear is that college athletes, at long last, will directly benefit financially from the booming business of college sports – a victory that was hard-fought through years of legal challenges. “A fantastic win for hundreds of thousands of college athletes,” is how lead plaintiffs’ attorney Steve Berman described Judge Wilken’s approval of the deal. On the other hand, the coming adjustments will test colleges’ commitment to broad participation and their creativity in maintaining competitive balance. The eyes of the sports world – and indeed, of lawmakers and judges – will be watching closely as this grand experiment unfolds.