College Athletes Compensation Models: A New Era in Collegiate Athletics

The landscape of college athletics is undergoing a seismic shift, driven by landmark legal decisions, settlements, and evolving perspectives on the amateurism model. This article delves into the emerging compensation models for college athletes, examining the key factors shaping this transformation and the potential implications for institutions and athletes alike.

The Foundation: Legal Challenges and the NIL Era

Several pivotal court decisions paved the way for the current era of college athlete compensation. O’Bannon v. NCAA and National Collegiate Athletic Association v. Alston played crucial roles in establishing student-athletes' rights to their name, image, and likeness (NIL). These cases challenged the NCAA's restrictions on student-athletes' ability to profit from their personal brand.

In response, the NCAA issued an interim NIL policy in 2021, marking a historic turning point by allowing student-athletes to profit from their NIL for the first time. This opened the door for endorsement deals, sponsorships, and other commercial activities, fundamentally altering the financial dynamics of college sports.

The House v. NCAA Settlement: A Game Changer

The multi-billion-dollar House v. NCAA settlement, approved by Judge Claudia Wilken on June 6, 2025, represents a watershed moment in the evolution of college athlete compensation. This settlement resolves three separate federal antitrust lawsuits that claimed the NCAA was illegally limiting the earning power of college athletes. The settlement ends three separate federal antitrust lawsuits, all of which claimed the NCAA was illegally limiting the earning power of college athletes.

Key Provisions of the Settlement:

Back Pay: The settlement requires schools to distribute $2.8 billion to former collegiate student-athletes for previously denied NIL earnings, covering athletes who competed from 2016 through the settlement date.
Revenue Sharing: It establishes a revenue-sharing framework that allows universities to pay student-athletes directly, up to $20.5 million per year, with that figure set to increase 4% annually over the next 10 years.
Elimination of Scholarship Limits: Colleges will no longer be restricted by the "head count" scholarship model. Instead, schools will be permitted to offer each student-athlete a full, partial, or no scholarship at all.
Roster Limits: Each sport will now have its own roster cap, which may increase or decrease depending on the sport. Football teams will be capped at 105 total roster spots, with scholarships distributed at varying levels.
Enforcement: A new organization, the College Sports Commission (CSC), will be in charge of enforcing the new rules. This includes making sure colleges are following the new revenue-sharing system and ensuring NIL deals are legitimate.

Judge Wilken's long-awaited decision comes with less than a month remaining before schools are planning to start cutting checks to athletes on July 1. While college sports leaders have been making tentative plans for a major shift in how they do business, the tight turnaround time means schools and conferences will have to hustle to establish the infrastructure needed to enforce their new rules.

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Congressional Involvement: The SCORE Act

The US Congress is also seeking to shape the future of college athlete compensation. The House Committee on Energy and Commerce, Committee on Education and Workforce, and Committee on the Judiciary introduced the Student Compensation and Opportunity through Rights and Endorsements Act (SCORE Act).

Objectives of the SCORE Act:

Codify the House settlement.
Prevent restrictions on student-athletes entering NIL deals, including preempting state laws.
Prohibit student athletes from being classified as employees.
Grant the NCAA antitrust protections.

Backers of the SCORE Act argue that it is necessary to bring uniformity to a fractured landscape and protect the long-term viability of college sports. However, the bill faces opposition from House Democrats, who warn that it would shield the NCAA from future legal challenges while offering athletes little recourse if the terms of the $2.8 billion court settlement over NIL and student-athlete pay are violated.

Presidential Influence: The Executive Order

Recognizing the significance of these developments, President Trump issued an executive order aimed at guiding the implementation of college athlete compensation models. While the executive order clearly identifies the areas in which the US administration intends to limit direct payments and revenue sharing in collegiate athletics, much of what is requested of schools, as well as how this impacts decisions already made for the upcoming athletic season, is left to be determined by the implementing administrative agencies. As a result, higher education institutions and third parties alike must remain flexible in making decisions involving these issues.

Given President Trump’s stated intent in issuing this executive order-protect student-athletes and collegiate athletic scholarships and opportunities, including in non-revenue generating programs-and ongoing litigation around what is required by way of providing compensation and other opportunities for all student-athletes, it is safe to assume that some higher level of proportionality may be required.

Emerging Compensation Models

As the legal and regulatory landscape evolves, several compensation models are emerging in college athletics.

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Employment Status: Some student-athletes have already been designated as employees by the National Labor Relations Board. This means they can unionize, engage in collective bargaining, and may be owed money for unpaid wages and overtime. Even though federal labor laws only apply to private employers, this may also apply to public institutions.
Education-Related Awards: Many institutions already offer education-related awards (also called Alston awards) to student-athletes, but proposals to expand this compensation could dramatically shift how D-I institutions fund their athletics departments. This model is currently being investigated by the NCAA Division I Council and could involve institutions directly signing NIL deals with players or giving direct payments to student-athletes.
Revenue Sharing: Many athletes and coaches are advocating for-and several institutions say they’re “preparing for”-a model in which institutions split revenue from broadcasts and media deals. This model would likely mimic professional sports leagues, which means student-athletes would likely engage in collective bargaining at the institutional or conference level.

Key Considerations and Challenges

The shift towards compensating college athletes raises several important considerations and challenges for institutions and stakeholders.

Title IX Compliance: The settlement is also (intentionally) silent on the application of Title IX to payments from an institution to the student-athlete. Do the amounts paid directly to men and women student-athletes need to be consistent with Title IX proportionality standards, or they can be appropriated according to some other metric?
Competitive Balance: Many sources in the college sports industry have doubts about whether the limit on booster spending -- aimed at protecting competitive balance -- will be effective in slowing the rapid increase in money flowing to athletes at the NCAA's richest schools. Some believe the rule will spur new lawsuits. For non-Power 4 schools, keeping up with the financial powerhouses like the Big Ten and the SEC will become even harder.
Impact on Non-Revenue Sports: College sports like tennis, swimming, and track (such as non-revenue generating sports or Olympic sports) may face tough times ahead. With more money going to football and basketball, colleges may choose to cut back on funding for other sports.
Enforcement and Oversight: The power conferences are launching a new enforcement organization to monitor payments that come from schools and boosters, a duty that was previously one of the main functions of the NCAA's national office. College sports officials hope the new organization will have a more streamlined and effective approach to investigating potential violations and punishing those who break the rules.
Potential for Unionization: Another major question McCareins sees on the horizon is how players will approach unionizing and collective bargaining. “I think there will be a dramatic effort to attempt to unionize these paid players on the grounds that, okay, the fiction of them being student athletes is now gone.”

The Role of NIL in the New Landscape

Even with the advent of direct payments, NIL deals are still alive and well. Since 2021, college student-athletes have benefited from the opportunity to make money through deals involving their name, image, and likeness. In some cases, these collectives were paying millions of dollars, mostly to top football and basketball players. With the House settlement, that money will now be coming directly from the school’s athletic department.

However, NIL can no longer be used just to pay players to join a team. One major factor in NIL success is a school’s location and proximity to business opportunities. For high school student-athletes, this means that NIL deals could become even more important, and the level of scrutiny around these deals is likely to increase.

The Duke Model: A Performance-Based Solution

The time has long come for the NCAA, its member institutions, and college athletes to sit down and discuss compensating college athletes for playing. Rather than continue a war of words with increasing animosity between college athletes and the NCAA, the parties should take advantage of the existing infrastructures to begin a discussion that would lead to the abandonment of the prohibition on compensating athletes and the adoption of a model for payment.

The Duke Model would compensate college athletes in football and men's basketball, which are the two revenue generating sports, based on their performance on and off the field. In particular, the more a player plays, the more that player earns. The model also includes bonuses for athletic and academic performance through tangible measurements.

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Key Dates and the Road Ahead

With major changes on the horizon, it’s important for student-athletes and families to stay on top of the timeline. The rollout of the House v. NCAA settlement includes several key milestones that will impact eligibility, roster management, and revenue sharing.

Dec. 1, 2025: With the exception of “designated” student-athletes, winter and spring sports must be at or below roster limits by their first day of competition or Dec.

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