The National Collegiate Athletic Association has come to a preliminary settlement in the House v. NCAA lawsuit, promising to pay athletes what they could’ve made without its limitations and establishing new programs offering further student-athlete benefits that schools can choose to opt in to. The settlement comes four years after it was filed in 2020.
House v. NCAA is a class action antitrust lawsuit alleging the NCAA broke antitrust laws by limiting how much athletes could earn from their athletic abilities and name, image and likeness. The plaintiffs, a group of former NCAA athletes (2016-2021), alleged that these limitations were harmful to competition and hurt their ability to make a profit, thus violating United States antitrust laws.
With the Ivy League choosing to opt out of the settlement, Cornell Athletics will likely not change with the new collegiate landscape. Cornell will not be subjected to roster limitations and will not provide its athletes with scholarships or other revenue-sharing opportunities.
Former Cornell athletes between 2016 to 2021 will likely not be eligible for compensation provided by the settlement.
The lead plaintiff in the lawsuit is Grant House, a former All-American swimmer from Arizona State University. His goal behind the lawsuit was for the NCAA to pay athletes what they could have made without its limitations, under current name, image and likeness rules.
“What the settlement basically allows for is each participating conference that opts into the settlement agrees to spend a certain amount of money per year on athletes,” said sprint football head coach and lawyer Prof. Michael L. Huyghue ’83, law. “The goal is to repay athletes.”
House and his fellow athletes have seen success in their efforts. In November 2023, federal judge Claudia Wilken ruled that not only should there be changes to the rules in the NCAA surrounding athlete profitization, but that these former athletes were eligible for some sort of compensation under Federal Rules of Civil Procedure Rule 23, which outlines the requirements for a class action lawsuit.
The NCAA ultimately came to a tentative settlement for this case and two others — Hubbard v. NCAA and Carter v. NCAA. The settlement resolved three key claims — the payment of damages relating to NIL, academic-related funds and other financial benefits; the increase in financial awards and benefits from universities to student-athletes in the future and the elimination of scholarship limitation rules and replacing them with roster cuts.
The NCAA now owes $2.78 billion in “damages” to athletes to be paid over ten years.
The NCAA concluded that Division I schools could decide to participate in their new proposed structure to increase benefits for student-athletes. This “structure” would establish a ten-year plan to allow student-athletes to profit off 22 percent of the average athletic revenue their school made beginning in the 2025-2026 academic year.
Schools could also decide to opt into a $22 million yearly sports revenue cap to be distributed amongst all athletic programs. However, the distribution of this “cap,” which is expected to be at roughly $33 million by the end of the ten-year plan, would be at the school’s discretion with no formal rules on how the money should be divided. The goal of this cap is to move college athletics closer to the professional league style of play.
A Jan. 16 U.S. Department of Education Office for Civil Rights memo addressed the potential unfairness and damage the cap could do to current Title IX regulations that maintain gender equity in college athletics.
“I think this settlement will further erode what Title IV is supposed to be, and it will be difficult to enforce spending,” Huyghue said.
None of these numbers nor the proposal itself have been finalized, with estimates hoping to be completed before the start of the 2025-2026 academic school year. A fairness hearing will take place on April 7, 2025, as one of the last steps before this settlement is finalized and fully implemented. Schools must also decide if they want to opt into the settlement by March 1, 2025.