On June 6, U.S. District Judge Claudia Wilken approved a proposed settlement agreement [VZ1] between the National Collegiate Athletics Association (“NCAA”), the Power Five Conferences and student athletes, effectively paving the way for name, likeness, and image (“NIL”) compensation for student athletes.[1] The approval comes nearly five years after student athletes filed the class action lawsuit for alleged violations of the Sherman Act related to horizontal price fixing and unlawful restraint of trade. Under the settlement, the NCAA will provide nearly $2.8 billion in back pay to former and current student athletes while creating an avenue for schools to share billions in revenue with athletes over the next ten years.
Antitrust Claims in the NCAA Lawsuit
The settlement covers three of the major class action antitrust lawsuits brought against the NCAA, consolidated into “In re College Athlete NIL Litigation”: House v. NCAA, Hubbard v. NCAA and Carter v. NCAA. The lawsuits alleged that the NCAA and conferences engaged in anticompetitive conduct under Section 1 of the Sherman Act by: 1) collectively preventing athletes from receiving fair market compensation, which unlawfully restrained trade; and 2) engaging in price-fixing, group boycott and refusal to deal by agreeing with member schools to not pay student athletes and/or to cap their compensation. Plaintiffs asserted financial injuries from this conduct and from the prohibition on revenue sharing with athletes.
The settlement applies to: 1) the “Damages Settlement Class,” which includes all Division I student athletes who competed from June 2016 to September 2024 and received full scholarships (subject to certain exceptions); and 2) the “Injunctive Relief Settlement Class,” which includes all Division I student athletes competing between June 15, 2020 and ten years following the settlement approval.
Background
The approval is the most recent shift in the landscape of student athlete compensation, which has been heavily litigated for the past decade. At the time that the class action complaints were filed, the NCAA’s rules prohibited schools from offering student athletes any compensation beyond cost-of-attendance stipends, as a result of the holding in O’Bannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015). In 2021, a year after House was filed, the U.S. Supreme Court in NCAA v. Alston overturned the NCAA’s long-standing ban on educational-related compensation, holding that the ban violated antitrust laws. In Alston, the Court found that the NCAA’s limits on education-related benefits like laptops, books and musical instruments constituted an unlawful restraint of trade.
Following Alston, many states began requiring colleges to allow NIL compensation for student athletes, largely modeled after California’s “Fair Pay to Play” Act from 2019. Prompted by the growing number of states enacting these laws, in June 2021, the NCAA revised its policies to allow NIL compensation for student athletes as long as it was consistent with the laws of the state of their respective schools. This interim rule is likely to have paved the way for the final settlement.
Summary of Settlement
As approved on June 6, the settlement has the following key components:
- Back Payments: $2.576 billion in back payments to student athletes, allocated among different types of student athletes and distinguished by type of injury (e.g., lost NIL compensation, lost revenue share from broadcasting, lost opportunity damages, damages for “pay for play” claims)
- Direct Revenue Sharing: Allowing Division I schools to make direct revenue share payments to student athletes with a cap of $20.5 million per school (22% of Power Five Conference schools’ average athletic revenue)
- Changes to Payment Rules: In exchange for the release of claims, the NCAA and Power Five Conferences agree to revise rules that formerly restricted payments from colleges and third parties to student athletes, including by:
- allowing Division I colleges and student athletes to enter into licensing and endorsement agreements for the use of NIL, institutional brand promotion, or other rights, subject to some exceptions;
- allowing Division I colleges to act as the student athlete’s marketing agent with respect to third party NIL contracts; and
- allowing Division I student athletes to receive payments from third parties for NIL, subject to reporting requirements.
- Release of Claims: Class members that did not opt out of the settlement agree to release any claims and actions against the NCAA and the Power Five Conferences that arise from rules about student athlete compensation for a duration of ten years.
- Additional Rule Changes:
- The NCAA will now impose roster limits, which replace previously imposed scholarship caps. The elimination of scholarship caps will enable schools to provide scholarships to all athletes on the roster for any sport; while the imposition of roster limits requires schools to limit the number of athletes that a team can have on its official roster.
- While third party NIL deals are allowed, the NCAA can still prohibit payment arrangements from “associated entities and individuals,” which include donors and collectives, where the payment is not for a “valid business purpose.” This gives the NCAA and schools power to limit the influence of “pay-for-play” deals from boosters and collectives.
Objections
The settlement marks a transformative shift in how student athletes will be compensated going forward, as well as the overall structure and amateurism of college sports. The approval, however, has been and continues to be subject to legal challenges.
Several objections have been raised, mostly by current and former Division I athletes, which the court’s approval recognized and overruled in its 76-page opinion, each time rejecting the objectors’ arguments that the settlement itself would constitute a per se violation of the antitrust laws.
- Pool caps: Some objectors, including the Department of Justice under the Biden Administration [2], have argued that the cap on annual revenue share payments constitutes an agreement among “competing employers.” Objectors argue that the cap creates an artificial limit on what free market competition might yield, violating the Sherman Act. The court overruled these objections based on no finding of a per se violation and recognizing Defendants’ procompetitive justification that pool caps help ensure a level playing field and are necessary for competitive balance.
- Roster limits: The “roster limits” component of the settlement has been the subject of myriad of objections, largely due to the role it plays in defining which athletes are eligible for revenue sharing and how the pool is divided. Objectors argued that the roster limits reduce competition for athletes among NCAA members by limiting the number of spots for each team. A lower number of spots decreases the number of scholarships and other benefits that schools can award to student athletes. The limits can also result in walk-ons and partial scholarship athletes losing their spots; though a recent modification to the settlement exempts athletes who lost roster spots due to the new rule from the roster limits provision for the remainder of their Division I athletic careers. Roster limits have also been challenged on the basis that uniform limits across schools raises risk of horizontal collusion in the form of group boycott or price fixing. The court overruled these objections, crediting Defendants’ arguments that the limits enhance competitive balance among Division I schools and enhance output of college athletics.
- Limits on NIL payments: Some objectors argued that allowing the NCAA and its members to scrutinize student athletes’ NIL deals with boosters and collectives unduly restricts student athletes’ ability to enter into contracts or maximize their NIL payments. The court rejected these objections, too, finding that these limits would not constitute a per se antitrust violation.
Tangential to antitrust concerns, objectors also raised Title IX concerns, arguing that the limits prevent equitable distribution of benefits. On June 11, a group of women’s athletes appealed the approval of the settlement to the Ninth Circuit.[3] Another group of objectors filed a secondary appeal on June 16.[4] While the appeals do not affect injunctive remedies under the settlement, all damages payments will be delayed until the appeals are resolved.[5] Appeal briefs are due early September.
Looking Ahead
While the appeals will surely extend litigation, additional antitrust disputes are also likely to arise from the settlement’s new rules, some of which have gone into effect already, such as deal reporting obligations for student-athletes. Decisions by the NCAA’s to reject NIL deals between student athletes and booster collectives are prone to appeal – a feature of the settlement that is likely to result in arbitration.
NIL compensation is not the only antitrust challenge that the NCAA is currently facing. Student athletes have recently brought antitrust lawsuits claiming that the NCAA eligibility rules unreasonably restrain trade under the Sherman Act. Two courts have granted preliminary injunction enjoining the NCAA from limiting student athletes to four years of competition[6], while one refused to apply antitrust scrutiny to the NCAA’s eligibility rules because of their “non-commercial” nature[7].
Further, since the approval of the NIL settlement, federal lawmakers have introduced congressional bills that, if passed, will impose a national framework for NIL compensation, aimed to resolve some of the confusion created by state laws and the recent settlement.[8]
The overarching debate about whether to preserve amateurism within college athletics is certain to extend antitrust challenges to the NCAA, and the real impact of the NIL settlement is yet to be seen.
Wiggin and Dana routinely represents clients in connection with the Sherman Act claims at all phases of litigation, arbitration and appeals. Wiggin and Dana also regularly advises clients concerning evolving antitrust and regulatory landscapes. Special thanks to Wiggin and Dana’s 2025 Summer Associate Mia Carbone for her contribution to this article.
[1] See Opinion Regarding Order Granting Motion for Final Approval of Settlement Agreement, In re College Athlete NIL Litigation, No. 20-cv-03919 CW [Dkt. 978] (N.D. Cal. 2025).
[2] See Statement of Interest of United States of America, Id. [Dkt. 595].
[3] See Notice of Appeal, Id. [Dkt. 982-83].
[4] See Notice of Appeal, Id. [Dkt. 984].
[5] See Opinion Regarding Order Granting Motion for Final Approval of Settlement Agreement, 14, In re College Athlete NIL Litigation, No. 20-cv-03919 CW (N.D. Cal. 2025).
[6] Pavia v. NCAA, No. 3:24-cv-01336 (M.D. Tenn., Dec. 18, 2024); Elad v. NCAA, No. 3:25-cv-01981 (N.J. 2025, April 25, 2025).
[7] Goldstein v. NCAA, No. 3:25-cv-00027 (M.D. Ga. 2025, Feb. 28, 2025).
[8] Lawmakers Float NIL Bills Following NCAA Deal, Law360, available at https://www.law360.com/competition/articles/2351459?nl_pk=14e0bb6b-1178-4997-94d9-c755b11e45d7&utm_source=newsletter&utm_medium=email&utm_campaign=competition&utm_content=2025-06-11&read_main=1&nlsidx=0&nlaidx=8