College Sports' Revenue-Sharing Era Enters Its First Full Season Under the House Settlement

College athletics is operating under a new financial structure after a federal court approved a landmark settlement that allows schools to pay student-athletes directly for the first time. The House v. NCAA settlement, approved in June 2025 by U.S. District Judge Claudia Wilken in Oakland, California, resolved a set of antitrust lawsuits and set the framework for revenue sharing that began with the 2025-26 academic year.

What the Settlement Allows

Under the agreement, participating Division I schools may share a capped portion of their athletic revenue with athletes. The cap for the 2025-26 season is set at roughly $20.5 million, and it is scheduled to rise in future years. The settlement also included a payment of about $2.8 billion in back damages to former athletes who were barred from earning compensation from their names, images and likenesses while those rules were in effect.

Schools that opt in must also reduce or eliminate some scholarships to stay within the cap. That tradeoff has drawn criticism from some athletes and advocates who argue that scholarship losses could affect opportunities for less prominent sports, particularly those outside football and men's basketball.

A New Layer of Oversight

Alongside revenue sharing, the settlement created the College Sports Commission, an entity tasked with reviewing NIL agreements between athletes and third parties, including companies and collectives affiliated with schools. The commission was designed to separate deals that are tied to real marketing work from payments that could function as disguised compensation for recruiting or enrollment.

Enforcement has been a central question since the system launched. Clearinghouse reviews take time, and the rules governing what qualifies as a legitimate NIL deal remain a subject of debate among schools, conferences and athletes. Legal challenges and disputes over the framework are expected to continue.

Federal Involvement

The White House also weighed in on the issue. In July 2025, President Donald Trump signed an executive order titled "Saving College Sports," which directed federal agencies to examine how athletes are classified and how NIL arrangements operate. The order signaled that Washington intends to play a role in shaping rules that were previously governed largely by the NCAA and individual conferences.

Competitive and Financial Implications

The strongest financial impact is concentrated among the wealthiest athletic departments, which generate the most revenue from media rights, ticket sales and donations. Conferences with large television contracts are positioned to pay the most, while smaller programs may struggle to keep pace. That divide has already fueled discussion about whether the sport is drifting further toward a professional model, and whether Olympic sports and women's athletics will receive equitable investment.

Observers also point to the labor implications. Because schools are now paying athletes directly, questions about employment status, workers' compensation and collective bargaining have moved closer to the center of the debate. Several pending cases and policy proposals address those issues, and their outcomes could redefine the relationship between universities and their athletes.

What Comes Next

The first full season under the settlement will serve as a test of whether the revenue-sharing model can stabilize college sports or intensify its inequalities. Schools, conferences, athletes and federal officials will be watching closely as the College Sports Commission processes deals, as scholarship changes take effect, and as the cap grows in coming years. For now, the era of unpaid college athletics that defined the NCAA for generations has effectively ended, and the system that replaces it is still taking shape.