The House, Carter, and Hubbard Settlement

House Settlement: A Brief Explanation

On June 6, Judge Claudia Wilken of the United States District Court for the Northern District of California approved a settlement agreement between the National Collegiate Athletic Association (“NCAA”), power conferences, and current and former Division I athletes represented in the House, Carter, and Hubbard antitrust suits. The lawsuits challenged longtime restrictions placed by the NCAA on student-athlete compensation under a model that professed the athletes be considered “amateurs” and banned them from sharing in the billions of dollars of revenue they helped their schools generate. This settlement is set to drastically reshape the college athletics landscape in an unprecedented manner.

Which schools/conference are affected?

Not every Division I program will opt into the settlement and pay its athletes, but the vast majority of power conference programs are expected to opt in to remain financially competitive with the programs who choose to opt in. This includes schools in the Southeastern Conference, Big Ten, Atlantic Coast Conference, and Big 12, though many schools not in a power conference may choose to opt in as well.

Settlement Details:

Revenue Sharing

For the first time, on July 1, Universities will be permitted to directly pay their athletes. Any Division I school can opt to pay its athletes up to a collective cap of $20.5 million this year. Over the course of the 10-year settlement, that cap will rise incrementally by around 4% per year, translating to about a $1 million annual increase in the early years.

Compensation for former athletes

This settlement will pay out nearly $2.8 billion in back damages for current and former athletes and their attorneys. The “back pay” provision of the settlement is limited to athletes who competed between June 2016 and September 2024.

NIL Clearinghouse

In an attempt to reign in the Name, Image, and Likeness (“NIL”) landscape that is widely considered under-regulated, the settlement sets up a clearinghouse for NIL deals named “NIL Go” that will be run by Deloitte and the power conferences. The clearinghouse must review every NIL deal exceeding $600 and rule whether it is serving a “valid business purpose” and the compensation is within a “reasonable range.”

Mandatory Roster Limits

Schools will have a maximum number of athletes that they can have on a roster. The roster limits will vary based on the sport and will be subject to change from year to year.

Potential Impacts: Olympic Sports Cuts

Despite Judge Wilken’s April ultimatum that current athletes be grandfathered in and have their roster spots protected from cuts, the settlement does not require schools to preserve roster spots for any athletes. Four national collegiate coaching associations representing coaches in the sports of volleyball, wrestling, swimming & diving, and track & field released a joint statement expressing their concerns: “We are concerned that the new financial obligations placed on schools will force administrators to divert attention and resources away from non-football and non-basketball sports—the very programs in which the majority of NCAA student-athletes participate.” It continued: “This is no hypothetical. Budget cuts and program eliminations have already occurred in anticipation of today’s decision, and more are likely to follow.”

Even if the settlement did preserve current athletes’ spots, much of the damage has already been done. Schools across the nation have already cut hundreds of roster spots on Olympic sports in preparation for this settlement. For example, the University of Virginia’s athletic department recently elected to eliminate its diving program, despite the department generating over $153 million in revenue fiscal year 2023-2024. While roster and program cuts may provide an opportunity for traditionally mid-tier athletic programs to have access to a higher caliber of talent, this may disrupt the academic and athletic careers of current athletes and limit the opportunities for current high school athletes to join higher caliber programs.

Looking Forward: A New Era of Litigation

While this settlement provides student-athletes with more flexibility to earn money and is in some ways a step towards being more in line with existing legal precedent, several legal issues remain unresolved and will likely be the subject of future litigation:

• Title IX: Georgia’s current plan is to spend just under 80% of their $20.5 million in direct payments on football and men’s basketball. Whether it is a violation of Title IX for male athletes to receive more compensation than female athletes is unclear and already the focal point of the first Appeal filed in response to the House Settlement approval.
• NIL Clearinghouse: Prospective NIL deals that are rejected by the NIL clearinghouse because they pay substantially more than the NIL value is worth may be the subject of litigation as some skeptics of the settlement take issue with a consulting firm, instead of the free market, declaring what constitutes a “reasonable range” of compensation.
• Cut Sports: Athletes whose sports have been cut as part of austerity measures designed to enable stretched athletic department budgets to pay football and basketball athletes even greater sums of money are likely to have issue.

Conclusion:

The approval of the House, Carter, and Hubbard settlement marks a historic turning point for college athletics, ending decades of strict amateurism and ushering in an era where athletes can finally share directly in the billions of dollars of revenue they help generate. While the settlement brings much-needed stability and new opportunities for athletes—especially those in football and basketball—it also introduces significant challenges for Olympic sports and raises unresolved legal questions, particularly around Title IX compliance and the future oversight of NIL deals. As universities and conferences navigate this new landscape, the true impact of this transformation on student-athletes, the broader NCAA ecosystem, and the future of college sports remains to be seen. One thing is clear: this is the dawn of a new chapter in collegiate athletics, defined by both unprecedented opportunity and profound uncertainty.