Although college athletes have been earning money since 2021 through Name, Image, and Likeness (NIL) deals, a new agreement has paved a path for student-athletes to receive unprecedented financial benefits. The arrangement coming into effect on July 1, 2025, will see almost 50% of revenue generated from sporting activities at universities channeled towards funding student-athletes’ benefits.
Schools will now dole out $20.5 million to student-athletes this year, and the amount is expected to increase every year throughout the ten years the agreement covers. In addition to that, the NCAA will pay out nearly $2.8 billion in back damages over the decade. This amount will go to athletes who competed in college from 2016 to the present day.
What Led To This Change?
The ten-year deal between the NCAA, its collegiate athletic conferences, and Division I athletes resolves the federal antitrust class action lawsuit alleging that the NCAA was illegally inhibiting the earning power of student-athletes. Opting to settle the lawsuit, the parties involved reached an agreement, which Judge Claudia Wilken approved on June 6, 2025. Confirming this development, NCAA President Charlie Baker affirmed that the deal is a new beginning for Division I student-athletes and the NCAA.
“Approving the agreement reached by the NCAA, the defendant conferences and student-athletes in the settlement opens a pathway to begin stabilizing college sports,” stated Baker. “This new framework that enables schools to provide direct financial benefits to student-athletes and establishes clear and specific rules to regulate third-party NIL agreements marks a huge step forward for college sports,” added the president.
How Much Is Each Sport Getting?
According to Baker, it’s up to the defendant conferences to implement the settlement. Among other things, they will design and enforce an annual 22.5% cap for financial benefits, which Division I schools are expected to directly pay student-athletes. That percentage amounts to about $20.5 million in the first year and is expected to increase yearly.
How much each sport and each student-athlete will receive isn’t clear-cut, but it’s said that most schools will follow the same formula for paying the back damages. If that’s the case, then 75% of the $20.5 million will go to football and 15% to men’s basketball. The remaining 10% will be evenly split among women’s basketball players and student-athletes in other sports.
Additionally, the student-athletes will receive other forms of support, including scholarships, housing, nutritional support, and academic tutoring. This will ensure that 50% of revenue generated from sports at universities goes back to paying student-athletes and funding their benefits. “With these reforms, along with scholarship and other benefits, student-athletes at many schools will be able to receive nearly 50% of all athletics department revenue. That is a tremendously positive change and one that was long overdue,” asserted the NCAA President.
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