IT has Begun
It’s finally here. The House vs. NCAA settlement has been formalized and ratified and will now further complicate the already deteriorating situation going on in college sports. Complicate? How does a settlement complicate things? This was supposed to be the end of things, why does this huge “agreement” make things substantively worse, and not settle the situation?
The simple answer to all of those questions is that this is a coerced agreement between a single individual (in this case some six plaintiffs) backed by a court and an organization that is being bludgeoned into a corner by repeated court-imposed blows. Just take a look at some of the articles, the actual settlement text hasn’t been published for the general public but there are some more analyses of the top end of the situation.
Judge OK’s $2.8B settlement, paving way for colleges to pay athletes – ESPN
With $2.7 billion settlement, college sports’ big money era is officially here : NPR
Back Pay Might Present Fodder for Future Court Involvement
The first element of the settlement is the monetary penalty that the FBS Division 1 “Power 4 (formerly 5)” conferences will have to pay out to athletes from 2016-2024. Given the number of schools, the number of athletes, and the time allotted to pay off the settlement ‘fine’, the member organizations will be hemorrhaging money just being a party to the agreement.
Remember that the estimated $2.78 billion (yes folks, that is billion, not million) is not equally for all of the former athletes. There is some formula out in the minds of lawyers and administrators that will distribute settlement money based on a list of criteria still not greatly discussed, but the Knight Commission review of the proposed settlement from back in February is a reasonable summary. KnightCommissionBrief_HousevNCAA_182025.pdf.
As explained in the document, it’s not the official summary, but the Knight Commission has been noted for its neutral analyses of collegiate sports activities. The number cited is closer to $1.6billion for the punitive (damages) portion of the settlement that will have to be paid out directly by the programs over a 10-year period of time. The other $1.1billion is supposed to be indemnified by insurance (How that works and what insurance company would dole that out would be an interesting investigation for a business reporter.) That’s still quite a lot of money and will stress the financial resources of most peloton programs in the defendant class. As stated in the document, that’s $280million a year, for all P4 programs combined.
In order to be paid, the eligible athletes have to sign an individual agreement to refrain from any personal suits and accept whatever monetary remunerations come from the pool of funds. There are quite a few who seem to be unwilling to accept the terms and have opted not to sign the deal.
“Hundreds” is not the 40,000 plus, but it only takes a few to form a class and have a serious impact on the agreement if they get a favorable judge situation. The major controversy that will probably rear its head on this formula is that in gross, the conferences are proposing to pay some 90% of the money to just football, men’s, and women’s basketball, leaving a tiny amount for other athletes. Which is probably a major reason why there could be a growing number of former athletes who are unwilling to “opt-in”.
One thing is for sure, if they do sign up, their portion of the settlement will be paid over a defined period of time (It looks like 10 years). For some athletes the number might seem paltry, and for others rather lucrative. To that end, there are former athletes who are opting to remain outside of the settlement terms. Hundreds of Division I Athletes Opt Out of House Settlement and will Pursue Separate Legal Action | News | 2aDays News
Revenue Sharing and NIL Payment Caps
The next item on the list of things to ponder on the agreement is the $20.5 million per year commitment/cap on direct “NIL” payments to the athletes. Now remember there are two forms of NIL; direct paid by the athletic program and fund raisers, and indirect which is paid by endorsement deals. The former “indirect” payment method was what most folks out in college sports fandom were thinking that NIL involved, not direct payment of student athletes by the programs. This settlement codifies the difference and places a cap on the amount of money that can be paid directly to the athletes. The current number is expected to rise to the range of $33 million in the next few years to decade, but those caps are likely to become a major bone of contention as compensation tables are derived, and payments designated for various athletes. It would only take a few four- and five-star football and men’s basketball players to soak up a huge percentage of the cap money, leaving other athletes in the same sport, or other sports – remember the settlement covers all sports, not just football and men’s basketball – including those covered by Title IX rules. Title IX is not covered in the agreement and is likely to provide feedstock for many lawsuits and then a major class action is likely to be filed.
Who is Involved and What’s the Future?
The conferences involved in this “headache” are listed as what we know as the Power 5. That’s the SEC, B1G, Big XII, Pac 12, and the ACC. Of course, the PAC 12 has evaporated, and if it finally can reconstitute or merge, it will probably not be a “Power” conference. The Mid-Major conferences are not involved in this settlement. They have a window to “opt in”, but given the enormous amount of money that would be required for them – very few mid-majors can come up with $20.5mil just for the privilege of having athletes play a sport – the very ephemeral and probably inadequate lawsuit exemption might not be enough bait to get the rest of Division 1 into the mix. Some teams might opt in, but frankly, they’d be foolish to do so. It would obligate them to payments to be competitive that almost all of them can ill afford. Most college athletic programs actually really are non-profit, and many have to go begging hat in hand to their foundations, regents, and/or endowments for funds to operate.
This agreement is something that most of the “Power 5” teams will struggle to fulfill. Yes, there is immunity from directly related lawsuits, and a cap on direct NIL payments but given the current tort environment, those levels are unlikely to stand the test of lawfare fire.
One Big Bone of Contention – Roster Size vs. Scholarships
Besides the monetary remunerations and penalties, the programs are looking at changes to roster limits for various sports. The argument over the issue even held up the agreement as the judge refused to accept the “final” proposed settlement because the limits weren’t agreed to and published. There was a convoluted solution reached regarding current roster positions and grandfathering, but the logic is pretty twisted, and the results are likely to be unsatisfactory for many.
The Business of College Sports just published a table of the old situation and the new limits. New Roster Limits Set by House v. NCAA The following is an extraction of their table with only the relevant Virginia Tech sports listed, and the Average D1 number rounded to the nearest whole number (face it a fraction of a roster spot isn’t particularly useful information).
Roster Comparison for Sports Played by Virginia Tech
Sport
Previous Scholarship Limit
Previous Roster Size (NCAA D1 Average)
New Roster Size
Sport
Previous Scholarship Limit
Previous Roster Size (NCAA D1 Average)
New Roster Size
Baseball – Men’s
11.7
41
34
Basketball – Men’s
13
17
15
Basketball – Women’s
15
15
15
Cross Country – Women’s
6
14
17
Cross Country – Men’s
5
14
17
Football – Men’s
85
124
105
Golf – Men’s
4.5
10
9
Golf – Women’s
6
8
9
Lacrosse – Women’s
12
25
38
Soccer – Men’s
9.9
30
28
Soccer – Women’s
14
27
28
Softball – Women’s
12
21
25
Stunt (M&W) Sprit Squad
14
39
65
Swimming & Diving – Men’s
9.9
21
30
Swimming & Diving – Women’s
14
23
30
Tennis – Men’s
4.5
10
10
Tennis – Women’s
8
9
10
Track and Field – Women’s
18
33
45
Track and Field – Men’s
12.6
35
45
Volleyball – Women’s
12
17
18
Wrestling – Men’s
9.9
29
30
*Decimals represent partial scholarships
These are the current numbers as reported
Business of College Sports (edited by Gobbler Country for Clarity)
The trade-off in the agreement, besides the byzantine grandfathering of rostered players under certain conditions was a new fixed limit on roster sizes for all participating programs (P4/”P5”). The limits were supposedly balanced off by a removal of the limits on scholarships for the relevant sport. What this means is a massive increase in the number of scholarships allowed over all sports. That can be a huge pill to swallow for many managers within each sport.
Before we do a deeper look at the ramifications, the reality is that the biggest change is in the football programs. Previously all NCAA football programs were allotted 85 active player scholarships (there were special case scholarships like medical retirement from chronic injury). Also, the removal of the cap on the number of scholarships means that. The number of scholarships offered is now up to the program. The full roster can be offered full relief or some part. The roster cap is also the scholarship cap; it’s not a requirement.
So, now there is a limited pool of money available to scatter to the roster, and the “walk-on” for no compensation player slots are likely to begin to evaporate. Those 20 slots over the old cap for football will suddenly become much more significant than somebody doing a “Rudy” and hanging in on his own dime for the glory of the program cause.
Because of eligibility requirements (as long as they still last) and redshirting practices, the result will be an average of 21 scholarships available each year, if the conveyor works out and the program fully funds all 105 scholarships. The football changes (men’s basketball doesn’t change all that much) the other sports, especially baseball, wrestling, and swim/dive will be challenged because schools offering NIL and scholarship money will attract more attention than those programs continuing to be parsimonious with the grant funds.
Surfing the Swells
Whit Babcock is doing his level best to put the best face on this as is possible, but everyone reading this with an understanding of the Tech athletic program over the last decade knows that the AD is rarely completely candid about the details, trials, and problems meeting the department’s finances.
The interview with Hokie Hall of Fame announcer Bill Roth is available, here.
️ Whit Babcock breaks down what the House settlement means for Virginia Tech and the future of college athletics.
The game is changing—but our commitment to compete, support our student-athletes, and strengthen the Hokie community remains steadfast. We’ll do it together.
— HokieSports (@hokiesports) June 10, 2025
Whit can shine this one up all that he wants. This isn’t the end of the road, and like sitting in the middle of rough chop in a modest sized boat, he’s praying that the swells don’t get worse because he’s too far out to get home before dark.
Final Note in Observation
A major part of this mayhem is the serial and often independent stovepipes of narrow interests being driven into a sports association that has very little actual broad-based power (NCAA) to enforce rules, and the first big pin was the Supreme Court’s antitrust ruling that called it a monopoly and removed its limited abilities to control the membership. Until Congress finally gets into the act and turns the NCAA into an actual viable league manager with an antitrust exemption, this barrage of suits, settlements, and court rulings will continue to slowly cripple college sports.
Labor Employment and the Law might have the best non-sports oriented, business and labor type opinion of the settlement.
We will have to wait and see. I’d expect ticket prices to rise (it might be steep for some programs), seat premiums to be universal and increased to the point where ticket holders balk. The begging hand will be out to fund these new organizations, and most athletic departments won’t be able to handle this well. They aren’t for-profit businessmen and women so their traditional methods of raising money are going to be wholly inadequate as the demand for compensation increases and the labor related lawsuits continue to roll in.
The House Settlement is increasingly looking like this judge’s (and jury’s) prior torpedo into the side of the ship of collegiate athletics the O’Bannon decision. O’Bannon v. National Collegiate Athletic Association, 802 F.3d 1049 (2015), cert. denied, 137 S. Ct. 277 (2016): Case Brief Summary | Quimbee It will probably not answer much of much other than to further contribute to the end of big time collegiate athletics.
(Note: For the unaware, the O’Bannon decision established the right to NIL earnings.)
We’ll be monitoring how this all goes. This season is pretty well locked in, except for team personnel issues for incoming players to fall practice.
GO HOKIES!!!!