On June 6, 2025, the U.S. District Court issued a long-awaited final approval of a $2.8 billion settlement in the blockbuster Grant House, et al. v. National College Athletic Association, et al., No: 5:20-cv-3919, ( U.S. District Court for the Northern District of California, June 6, 2025) antitrust case that allows for direct sharing of revenue between NCAA colleges and universities and thousands of student-athletes. NCAA rules “prohibit student-athletes from receiving anything of value in exchange for the commercial use” of their names, images, and likenesses (NIL).

Essentially, the student athletes alleged that absent the challenged NCAA rules, the NCAA and its member conferences and schools would allow student-athletes to take advantage of opportunities to profit from their NIL, and NCAA member conferences and schools would share with student-athletes the revenue they receive from third parties for the commercial use of student-athletes’ NIL.  These rules violate anti-trust laws because they (1) fix at zero the amount that student-athletes may be paid for the licensing, use, and sale of their NIL; and (2) foreclose student-athletes from the market for licensing, use, and sale of their NIL.

NIL money is from sources outside of the school, e.g. boosters, etc. NIL rules lay out what college athletes and their sponsors can and cannot do. There is no limit how much NIL money could be spent on one student athlete.

The District Court agreed with the student athletes.  The class essentially are those students who were student athletes in the four years prior to the filing of the date of the complaint.

In short, the settlement is as follows:

1. It permits the NCAA to allow schools to share up to $20.5 million in revenue with student-athletes beginning in the 2025-26 school year.
2. Each campus is permitted to allocate settlement funding to student-athletes at their discretion, and the NCAA will not provide oversight as to the manner of distribution.
3. Financial agreements reached between athletes and third parties will not count toward an athletic department's annual cap, though any deal greater than $600 is now subject to approval by NIL Go, an online clearinghouse within the College Sports Commission. All outside NIL deals must be vetted by NIL Go as representing a legitimate business purpose. This policy is designed to prevent recruitment incentives disguised as NIL deals.
4. One of the most immediate impacts of the settlement is the imposition of roster limits, also referred to as "roster caps." In the past, schools had a limited number of full scholarships available to recruits and often promoted partial scholarships and walk-on scholarships for less popular positions. With the settlement in place, schools will have a hard limit on the number of athletic scholarships available across sports. This will likely eliminate partial scholarships and financial support for walk-on athletes. The overall number of roster spots will shrink.
5. The settlement agreement is valid for 10 years.

As expected, this settlement will positively impact major sports and large, well-endowed universities.  Mid-major and smaller programs will have to adjust their expectations as the financial gap becomes more difficult to overcome.

As for students, any money they receive whether NIL or Direct Payment is taxable. Money made from NIL would have to be reported on any need-based financial aid application. NIL income is much more likely to affect freshman and sophomore athletes’ future aid eligibility, given that it will be reported on their applications during their final years at school.

The student athlete and parents will have to be educated as to the financial impact of these payments. For HR, this presents another opportunity to provide parents with financial literacy education.

Source: Benesch 6/19/25, Mad about College Sports 6/19/25, CollegeNetWork 6/15/25, Sportico 7/6/21