NIL vs NCAA: House Settlement, Title IX Appeal, and Employee Status

The fight between NIL and the NCAA is no longer a fight over whether college athletes can be paid. That question was settled by the Supreme Court’s 2021 ruling in NCAA v. Alston and the $2.8 billion class-action settlement in House v. NCAA, approved in June 2025. The live fight now is over how athletes get paid, how much, who enforces the rules, whether the settlement complies with Title IX, and whether athletes are legally employees of their schools. As of mid-2026, Division I schools can pay athletes directly up to roughly $20.5 million a year, a new oversight body is reviewing every third-party deal of $600 or more, back-pay damages are frozen on appeal, and Congress is debating a bill that would give the NCAA federal antitrust cover for the first time.

How We Got Here: Alston and the Interim Policy

The modern era started with antitrust litigation filed in 2014 and 2015 by current and former Division I football and basketball players. Those cases were consolidated as NCAA v. Alston, and on June 21, 2021, the Supreme Court unanimously held that NCAA rules capping education-related compensation violated Section 1 of the Sherman Antitrust Act. Justice Brett Kavanaugh’s concurrence went further, signaling that the NCAA’s remaining compensation limits were legally vulnerable too.¹

Nine days later, on June 30, 2021, the NCAA adopted an interim NIL policy letting student-athletes earn money from their name, image, and likeness.¹ The NCAA never replaced that interim framework with permanent rules. States filled the vacuum, athletes began signing endorsement deals, and booster-funded collectives began paying athletes in ways that often looked like pay-for-play. The interim policy did nothing about direct payments from schools. That is what House changed.

The House Settlement in Plain Terms

House v. NCAA, formally In re College Athlete NIL Litigation (No. 4:20-cv-03919), was filed in 2020 in the Northern District of California and consolidated claims from House, Hubbard, Carter, and Oliver. The plaintiffs argued that NCAA rules barring athletes from NIL compensation violated the Sherman Act.² Settlement documents were filed on July 26, 2024,³ and Judge Claudia Wilken granted final approval on June 6, 2025.⁴

Back Damages

The settlement pays roughly $2.8 billion in back damages to Division I athletes who were on rosters between June 15, 2016, and September 15, 2024, and did not receive NIL compensation during that window.² Payment is spread over ten years at about $280 million a year. The money comes from NCAA reserves and insurance (about $1.1 billion) and from withholdings against future Division I revenue distributions (about $1.6 billion). Of the withheld piece, 40% is assessed on the five defendant conferences (ACC, Big Ten, Big 12, Pac-12, and SEC) and 60% on non-defendant conference institutions.⁵

About 95% of the damages are allocated to football and men’s and women’s basketball players from the defendant conferences, with the remaining 5% split among every other Division I athlete.⁵ Projected individual payouts vary sharply: power-conference football and men’s basketball players average roughly $135,000, women’s basketball players roughly $30,000,⁶ and some athletes in other sports under $100.⁷ Verita Global is the claims administrator, and estimated payments and claim filing are handled through collegeathletecompensation.com.⁸ The back-pay damages are currently stayed pending appeal.

Revenue Sharing Going Forward

The bigger structural change is prospective. Starting with the 2025–2026 academic year, Division I schools that opt in may pay athletes directly, capped at approximately $20.5 million per institution per year. That cap is set at 22% of the average media, ticket, and sponsorship revenue of the Power Five conferences and rises 4% annually over the ten-year agreement, reaching an estimated $32.9 million.⁹ Schools are permitted, not required, to pay, and the first $2.5 million in education-related Alston awards counts against the cap.¹⁰

Every member of the five defendant conferences participates automatically. Other Division I schools can opt in, but the choice is institution-wide; a school cannot opt in for football alone.¹⁰ Non-defendant institutions had until June 30, 2025 to opt in for the first year. Revenue sharing took effect July 1, 2025.²

Roster and Scholarship Changes

Traditional scholarship limits are gone at opt-in schools. Those institutions can offer scholarships to every athlete on a roster, but each sport now has a hard roster cap. The tradeoff has drawn concern about reduced opportunities for walk-ons and non-revenue sports.¹¹

Who Enforces NIL Now

In July 2025, the Power Five conferences created the College Sports Commission LLC, an independent oversight body led by CEO Bryan Seeley. The CSC runs two systems. NIL Go is the central clearinghouse where every third-party NIL deal of $600 or more must be reported within five business days. CAPS, the College Athlete Payment System, is the reporting portal for schools in the revenue-sharing framework.¹²

The CSC reviews reported deals for valid business purpose and fair market value, and it has rejected deals it considers non-compliant. In March 2026, it blocked roughly $7.5 million in arrangements between University of Nebraska football players and a multimedia rights partner, calling them impermissible “warehousing” of NIL rights with no plan for actual use. An arbitrator sided with the CSC in May 2026.¹² In January 2026, the CSC warned that using third-party NIL offers to pull athletes through the transfer portal before deals are cleared through NIL Go creates serious compliance exposure.¹³

Under the rules in force in 2026, Division I athletes can earn money from NIL activities with a genuine business purpose: social media endorsements, autograph signings, camps, commercials, and sponsorship agreements. Athletes may hire agents or marketing representatives. Still prohibited: pay tied to attending a particular school, to competing, or to athletic results; passive income with no required promotional activity; deferred deals with no defined use plan; and compensation well outside the market range for comparable services.¹⁴

The Title IX Appeal That Could Undo Back Pay

Five days after final approval, on June 11, 2025, eight female athletes filed the first appeal in the Ninth Circuit, arguing that the settlement violates Title IX because over 90% of the damages go to male athletes.¹⁵ More appeals followed. Appellants argue the damages allocation is disproportionate, the damages calculations are flawed, and class representation was inadequate.¹⁶

At the district court, Judge Wilken held a fairness hearing on November 6, 2025, and overruled post-approval objections a week later. She said the court lacks authority to modify the settlement, but noted that class members can still file separate Title IX lawsuits because those claims were not released by the agreement.¹⁶

As of mid-2026, briefing in the first batch of Ninth Circuit appeals is complete, with reply briefs filed in early 2026. A second group, challenging the 2025–26 incoming-class treatment and roster limits, finished briefing in late April 2026. No oral arguments have been scheduled and no merits ruling has issued.¹⁷ Revenue sharing continues during the appeal; only the back-pay damages are stayed.²

The Title IX question also reaches forward. If courts hold that revenue-sharing payments count as “financial assistance” under Title IX, schools could be required to distribute them proportionally between men’s and women’s sports, forcing budget restructuring or unraveling parts of the settlement. The Trump administration rescinded Biden-era guidance that said NIL compensation had to be made proportionately available, and the Department of Education said in February 2025 that no clear legal authority exists to force proportional distribution based on gender.¹⁸

Other Live Cases Against the NCAA

House did not end the litigation. Several other cases are pushing on different edges of the system.

Fontenot v. NCAA. Filed November 2023 in the District of Colorado, this antitrust class action alleges that NCAA bylaws prohibiting athlete pay operate as an illegal wage-fixing cartel under the Sherman Act. A separate antitrust class action filed in June 2026 in the Northern District of California by two Division I football and basketball players argues that the House settlement’s $20.5 million revenue-sharing cap itself violates state NIL laws in 17 states and that the NCAA, Power Four conferences, and CSC are unlawfully restraining trade by enforcing it.¹⁹²⁰
Pavia v. NCAA. Vanderbilt quarterback Diego Pavia challenged the rule counting junior-college seasons against eligibility limits on antitrust grounds. A Tennessee district court granted a preliminary injunction in December 2024, and the NCAA then issued a waiver allowing athletes in his position to play. The Sixth Circuit dismissed the NCAA’s appeal as moot in October 2025, though the underlying challenge to the rule continues.²¹
Zeigler v. NCAA. Tennessee guard Zakai Zeigler sought a fifth year of eligibility, arguing the four-season rule violated antitrust law and cost him NIL earnings. In June 2025, the Eastern District of Tennessee denied his injunction, reasoning that any losses could be addressed with money damages and that extra eligibility would displace other players.²²
Johnson v. NCAA. In July 2024, the Third Circuit held that college athletes are not categorically barred from being classified as employees under the Fair Labor Standards Act. The court rejected amateurism as an automatic defense and set out a four-part test examining whether athletes perform services primarily for the institution’s benefit, under its control, in exchange for compensation. The case was remanded to the Eastern District of Pennsylvania.²³

Are College Athletes Employees?

Whether athletes are employees of their schools, conferences, or the NCAA is the question that could matter more than House itself. Employee status would bring minimum wage, overtime, tax withholding, and potentially collective bargaining into college sports.

In September 2021, NLRB General Counsel Jennifer Abruzzo issued a memorandum concluding that certain college athletes are employees under the National Labor Relations Act and that labeling them “student-athletes” itself violates the Act.²⁴ The NLRB has also pursued a complaint alleging that the NCAA, Pac-12, and USC are joint employers of USC athletes.²⁵

Dartmouth became the test case. On February 5, 2024, an NLRB regional director ruled that the men’s basketball players were employees because the school exercised significant control over their work in exchange for compensation including equipment, meals, and academic support.²⁶ On March 5, 2024, the team voted 13–2 to unionize with SEIU Local 560, becoming the first certified bargaining unit of college athletes in the United States. Dartmouth refused to bargain and appealed to the full board. Then on December 31, 2024, the union withdrew its petition. The withdrawal was strategic: with the Senate having failed to reconfirm NLRB chair Lauren McFerran, the union feared a new Republican-majority board would overturn the regional director’s ruling and set an unfavorable national precedent. Withdrawing preserved the regional decision as precedent even though the bargaining unit dissolved.²⁷

Combined with the Third Circuit’s Johnson decision, the employee-status question is still open, with implications for Title IX analysis, tax treatment, and the structure of college athletics overall.

The State-Law Patchwork

Because the NCAA never replaced its 2021 interim NIL rules, 35 states have enacted their own NIL laws through statutes or executive orders. The first was California’s Fair Pay to Play Act (SB 206), signed in 2019.⁹ State laws differ meaningfully: some require athletes to disclose NIL contracts to their schools; some exempt those contracts from public-records requests; some restrict which industries athletes can endorse; Kentucky is the only state to extend NIL rights to high school athletes.²⁸ Seven states have considered tax exemptions for NIL earnings, and Arkansas is the only one to enact one. No federal law currently preempts state NIL statutes.

What Congress and the White House Are Doing

Congress has not passed comprehensive NIL legislation. The SCORE Act, introduced in the House, was pulled twice for lack of support.²⁹ In May 2026, Senators Ted Cruz and Maria Cantwell, joined by Senators Eric Schmitt and Chris Coons, introduced the bipartisan Protect College Sports Act of 2026. The bill would set a federal NIL framework, grant the NCAA targeted antitrust exemptions to enforce rules on transfers and eligibility, codify $600-plus reporting, require medical coverage for five years after an athlete’s eligibility ends, limit athletes to one penalty-free transfer, and let conferences negotiate broadcast deals collectively.³⁰ The bill is silent on whether athletes are employees, which has drawn skepticism from House committee chairs.

On April 3, 2026, President Trump signed Executive Order 14400, “Urgent National Action to Save College Sports.” The order targets what it calls “fraudulent NIL schemes,” defined as payments above fair market value, and directs federal agencies to evaluate whether universities with over $20 million in athletics revenue that violate governing-body rules should face suspension or debarment from federal grants and contracts.³¹ It encourages a five-year eligibility cap, transfer limits, a national agent registry, and a ban on using federal funds for NIL or revenue-sharing payments. It takes effect August 1, 2026. The order does not have the force of legislation and does not bind the NCAA directly, but it uses federal funding as leverage, and the Attorney General is directed to challenge state laws that conflict with NCAA governance, hinting at a federal preemption strategy.³²

On the transfer side, the NCAA’s Division I Cabinet in April 2026 adopted an immediate prohibition on signing, rostering, or allowing participation by any transfer athlete who has not officially entered the transfer portal. Violations carry an automatic 50% season suspension for the head coach and a fine equal to 20% of the sport’s budget.³³ If passed, the Protect College Sports Act would codify a one-transfer rule with immediate eligibility and let the NCAA require second-time transfers to sit out a year.³⁴

Where Things Stand in 2026

Schools are paying athletes directly under the House settlement. The College Sports Commission is auditing third-party deals and winning arbitrations. Back-pay damages are frozen while the Ninth Circuit considers Title IX appeals. New antitrust suits are challenging the $20.5 million revenue-sharing cap as illegal price-fixing. The Third Circuit has opened the door to athletes being classified as employees under federal wage law. A bipartisan Senate bill would give the NCAA antitrust protection but has not passed. An executive order will use federal funding as a compliance lever beginning August 1, 2026. The old amateur model is gone. What takes its place is being built case by case, bill by bill, and audit by audit.

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25
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26
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27
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32
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33
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34
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