The House v. NCAA settlement was approved on June 13, and in its simplest terms, it means that colleges can now directly pay their student-athletes.
In 2021, the Supreme Court ruled that prohibiting student-athlete compensation was a violation of antitrust laws. Name, image and likeness, or NIL, was established following the ruling.
NIL allows for students to profit off of their likeness, however, the money had to come from companies outside of the college. It was the NCAA’s last attempt to keep pretending college sports were not professional and at the amateur level.
In a letter from NCAA President Charlie Baker, he said the new settlement will bring more stability to college sports that was not there due to the initial NIL ruling.
“For several years, Division I members crafted well-intentioned rules and systems to govern financial benefits from schools and name, image and likeness opportunities, but the NCAA could not easily enforce these for several reasons,” Baker wrote. “The result was a sense of chaos.”
The letter then outlines more details of the settlement, such as the $20.5 million that Division I schools have to distribute among their student-athletes. The ruling will last 10 years, and the initial amount is expected to go up as time passes.
Dan Wetzel of ESPN wrote that the money handed out will most likely go straight to football and men’s basketball.
“One rough initial estimate within the industry is that 75% of the $20.5 million will get allocated to football players, 15% to men’s basketball, 5% to women’s basketball,” Wetzel wrote. “And 5% to other sports — softball, volleyball, hockey, soccer, lacrosse or whatever specific sport a school prioritizes.”
Wetzel uses this estimate because football and men’s basketball typically bring in the most money for a school.
Minnesota, like the majority of schools, has made it clear that football and men’s basketball are a priority, especially with the recent firing of men’s basketball coach Ben Johnson and P.J. Fleck’s $6.7 million salary.
However, Minnesota always prioritized hockey as well. With nearly 125 skaters sent to the NHL, the estimate of 5% to hockey will likely not cut it.
This is the reality for other Big Ten teams. Ohio State University put $20 million into their football team last year alone and is already trying to figure out how to get around the budget with “over-the-cap” NIL deals, according to The Athletic.
The NCAA expected this and set up the College Sports Commission. Every NIL deal over $600 must be cleared with the commission.
The commission is there to make sure that colleges adhere to the new guidelines and deal out punishments if they do not.
The ruling allows money to start being handed out as early as July 1 and accounts for athletes who never saw a dime during their time playing in college.
ESPN reported that $2.8 billion will be allocated to student-athletes who started playing in 2016 or later and never saw money for their likeness being used. The limited amount of money is projected to mainly be divided between college football and men’s basketball stars.
The landscape of college sports will now be changed forever, but this will likely not be the final answer to the question of how to pay student-athletes.
Cal Stein, a sports lawyer interviewed by The Athletic, said that the NCAA made their job even more difficult, and the chaos and lawsuits created by NIL are not remedied yet.
“The House settlement started with the goal of the NCAA putting an end to the losses it has taken in these litigations,” Stein said. “The great irony is that it’s really going to lead to more lawsuits.”