A California judge approved the $2.8 billion House v. NCAA settlement Friday, which will drastically alter the landscape of college athletics moving forward. The settlement will allow colleges to pay student-athletes directly.
“Approving the agreement reached by the NCAA, the defendant conferences and student-athletes in the settlement opens a pathway to begin stabilizing college sports,” NCAA President Charlie Baker said in an open letter. “This new framework that enables schools to provide direct financial benefits to student-athletes and establishes clear and specific rules to regulate third-party NIL agreements marks a huge step forward for college sports.”
The decision means that universities like Northwestern have the option to distribute up to $20.5 million to their student-athletes over the 2025-26 season. This number is expected to increase over each of the next 10 years, with the majority of the money expected to be distributed to revenue sports, such as football and men’s basketball.
Schools are not required to sign onto the settlement and have the ability to opt out of the settlement terms. Athletic Director Mark Jackson spoke to The Daily earlier this week and did not indicate whether or not the University will opt out of the agreement, but it appears unlikely given the department’s realignment during his tenure.
The agreement also introduced roster limits, replacing scholarship limits for teams, varying by sport. This includes 105 roster spots for football, 15 for men’s and women’s basketball, 34 for baseball, 28 for men’s and women’s soccer, 25 for softball and 18 for volleyball.
Since a 2021 ruling that allowed student-athletes to earn money from their name, image and likeness (NIL), many players have benefited from NIL collectives — third-party organizations that are funded by boosters, donors and alumni that use NIL money to lure players to their favored school. Northwestern’s NIL collective is TrueNU, helmed by Executive Director Jacob Schmidt.
Now, all deals of $600 or more from collectives or third-party sources must be approved by the NCAA. The money that formerly came from these collectives, such as TrueNU, is expected to now come primarily from the school’s athletic departments.
“We’re not going to be built like a traditional athletic department,” Jackson said in his interview with The Daily. “We’re really going to build it like a C-suite model, and we’ve done some of that already. So we hired a Chief Revenue Officer (Jesse Marks), we hired a Chief Communications and Branding Officer (Savanna Wood), we’ll have a chief operating officer and a chief administrative officer. Those positions are all uniquely designed to help navigate what’s coming at us.”
The department also hired Christian Sarkisian as its general manager last month, a position that many Power conference schools have created with the House settlement looming.
The agreement also included the NCAA paying nearly $2.8 billion in back damages, which will extend back to 2016. The majority of this money is expected to go to football and men’s basketball players.
Universities can begin sharing revenue with their student-athletes starting July 1.
U.S. District Judge Claudia Wilken’s settlement approval comes nearly two months after the final approval hearing on April 7. She did not initially approve the settlement due to her concerns about the roster limits, which would have resulted in thousands of athletes being cut from rosters.
“What I have absolute confidence in is that as an institution, we are fully committed to doing this as good as anyone in the Big Ten in terms of our commitment to moving into this new landscape,” football coach David Braun said during the team’s Pro Day in March. “What I have absolute confidence in is that we’re going to be in the fight on this from a revenue share standpoint.”
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— Christian Sarkisian named Northwestern Athletics’ general manager
