A Friday night news dump is supposed to be innocuous, but not when the entire college sports world is waiting for the announcement, bracing itself for a historic change.
The NCAA’s pillar of amateurism has been slowly eroding, especially in 2021, when the association created a policy for athletes to profit from their name, image, and likeness, or NIL. On June 6, U.S. Senior District Judge Claudia Wilken shattered that cracked pillar altogether, ruling that schools would directly pay student-athletes for the first time ever.
Wilken’s ruling, established almost eight months after her preliminary approval, settled three federal antitrust lawsuits against the NCAA — the suits alleging the NCAA and its power conferences illegally limited athletes’ earning power. Former Arizona State University swimmer Grant House was one of these plaintiffs, and his surname became etched in what has become known as the House settlement, which took effect on July 1.
Billions of dollars will be paid to former athletes, schools will operate under a $20.5 million financial cap for compensating athletes this season, and third-party NIL payments will be subjected to more scrutiny.
But not every athlete will be receiving money. Not every school is opting in to the settlement. Legal challenges were launched and will likely continue in the future.
“There will be a transition period and certainly bumps in the road,” NCAA president Charlie Baker wrote in an open letter on June 6. “Opportunities to drive transformative change don’t come often to organizations like ours. It’s important we make the most of this one.”
Back damages on hold
The word “billion” is hard to ignore, especially with a dollar sign attached.
The first part of the House settlement declares the NCAA will pay $2.8 billion over the next 10 years, divided among all Division I athletes who participated in their sport between 2016 and 2024. How these “back damages” are paid is at the NCAA’s discretion.
The money will be paid in yearly installments of about $280 million, according to a brief on the settlement from the Knight Commission on Intercollegiate Athletics, an independent reform organization based in Miami. The NCAA reserves and insurance will cover $1.1 billion of the total, while the remainder will be withheld from future distributions to DI schools.
“Every year the NCAA distributes more than $650 million to DI schools,” Knight Commission CEO Amy Privette Perko told The Daily Iowan. “That money comes primarily from the March Madness basketball tournament … [Schools] will still receive money, but it’s being reduced by about 20 percent overall.”
These withheld distributions are levied differently. The Big Ten, SEC, Big 12, ACC, and PAC-12 – known as the Power 5 and now as the Power 4 when the PAC-12 lost a majority of its teams in 2024 – are the defendant conferences in the settlement. Forty percent of the $1.6 billion remainder will be withheld from the Power Five conferences, while 60 percent will be withheld from other DI conferences.
The Knight Commission and other outlets report an estimated 95 percent of back pay will go toward football and men’s and women’s basketball players. Critics argued this would be a violation of Title IX, the federal law that mandates gender equity in public education.
However, Wilken said the back damages are the result of an antitrust case, and Title IX claims are a separate issue. On June 11, eight female athletes filed an appeal of the settlement, claiming the back damages did violate Title IX. The litigation is ongoing and the back pay is on hold as a result.
Revenue sharing disparity
While all schools in the defendant conferences must abide by the settlement’s ruling and directly pay athletes, others are left with an option. The Ivy League and the service academies all declined to participate, as did the Patriot League, which doesn’t offer athletic scholarships. The opt-out choices are only temporary, as non-defendant schools decide every year, according to the settlement.
Hitting the $20.5 million cap isn’t a requirement in the settlement. Schools technically only have to pay one athlete if they choose. Yet the reality is that power conference schools like the University of Iowa are expected to pay the $20.5 million this season, as they can easily afford to do so.
The $20.5 million figure is based on 22 percent of the average Power conference school’s athletic revenue in terms of ticket sales, corporate sponsorships, and media rights distributions. However, payments to athletes are not required to come from these sources.
For the Big Ten, these categories amounted to over $1.5 billion in revenue in 2024, equaling 64 percent of what the conference raked in that year, according to data from the Knight Commission. The Big Ten began a new seven-year media deal worth $7 billion in 2023.
UI athletics earned nearly $68.5 million from media rights in 2024. After factoring in ticket sales and sponsorship, the $20.5 million cap is only 18 percent of what the UI made from those categories. In other words, the UI has flexibility. Other schools don’t have this luxury.
NCAA football is divided into two subdivisions. The Football Bowl Subdivision, or FBS, contains the Power 5 conferences as well as five other smaller conferences, known as the Group of Five. All other DI schools are in the Football Championship Division, or FCS.
The median FCS athletic department earned $19 million in 2023, while the median non-Power Five FBS school earned $42 million. Both are a far cry from the $145 million of their Power Five counterparts. Unlike Power Five, more than half the funds came from student fees and government support.
For example, the University of Northern Iowa, an FCS school, made about $22.2 million in athletics revenue in 2024, and more than 72 percent of that came from student fees, government support, and donor contributions. Ticket sales, sponsorships, and media rights totaled roughly $3.9 million.
In its annual report, Opendorse, a leading athlete marketplace and NIL technology company, estimated that Group of Five schools, plus the PAC-12, will allocate an average of $4.3 million toward the
cap this year.
To spend toward the cap but have money left over requires alternative strategies. In August, the school announced the UNI Athletics Competitive Excellence Funds, allowing for sport-specific donations. This is one option for smaller schools to get closer to the cap, but for Perko, it isn’t the only one available.
Perko said some institutions are turning to increase student fees, boost fundraising, or ask for more institutional funding.
Schools aren’t required to max out the $20.5 million, and that’s necessary because many would struggle to do so. Plus, this 22 percent cap will increase by four percent every year. Some would deride this landscape as unfair, as wealthier schools could dominate recruitment and the transfer portal. For Ramogi Huma, there was never any equality in the first place.
A former football player at the University of California-Los Angeles, Huma started a student group that transformed into the National College Players Association, or NCPA, a nonprofit advocacy group. He said unlike professional sports leagues such as the NFL, there’s never been competitive balance. A power conference’s revenue stays within that league, and recent conference expansion only consolidates that financial leverage.
“When’s the last time Northern Iowa won a recruit from Ohio State?” Huma said. “It’s all because of the money and the powers and the TV dollars. Athletes shouldn’t be denied compensation to pretend that competitive balance exists when it never existed.”
For Huma, raising student fees is an option to close the gap, but so is cutting program expenses. He pointed to Division II, where athletes are on scholarship but coaches are paid less than in DI.
“There’s still money in there,” he said. “If they operated their budget more like a DII school, they would have millions of dollars to spend on players.”
How to spend, where to spend it
It’s no secret the UI will spend all $20.5 million. The question remains which sports will receive how much funding. Athletics Director Beth Goetz told reporters in July that payments were sent out to athletes via Venmo, which partnered with the Big Ten. Not every athlete will be paid, Goetz said, but the department aims to be flexible.
“It’s sort of a moving target. At the end of the year, we’ll have to see,” Goetz said in a press conference. “Clearly, we’re focused on men’s, women’s basketball, and football; and wrestling is a priority for us as well. But, there’ll be a smattering of other individuals, I think, along the way that we’ll see.”
The DI and other outlets requested exact figures from UI athletics via the Freedom of Information Act. The department said in an email data won’t be available until
around mid-2026.
The department said in a statement select scholarship athletes and teams outside of football, men’s and women’s basketball, and wrestling “have been included through a combination of direct revenue sharing and enhanced scholarship support.”
Opendorse estimated Power Four schools will spend an average of 65.6 percent of their allocations on football, followed by men’s basketball and women’s basketball at 20.3 percent and 6.6 percent, respectively.
Using Opendorse’s estimate of 65.6 percent and the Hawkeyes’ 105-person roster, a UI football player would earn $128,076 for this season, but that’s
not reality.
Football general manager Tyler Barnes told Hawk Central Radio this summer, “Our best, most productive players and top leaders will make the most money.”
UI graduate defensive lineman Aaron Graves started every game last season and entered 2025 as a Phil Steele preseason second-team All-American. He said the team is “blessed” to be financially supported, but hasn’t been outspoken on payments.
“We addressed it right awayt when it came out,” Graves said. “We were like, ‘You know, people are gonna get paid, but that’s
a private thing.’”
For UI defensive line coach and former Hawkeye Kelvin Bell, revenue sharing was “long overdue.” His best advice to players: “stay in business, stay available.” That availability, he said, hinges on success in the classroom. Student-athletes must be academically eligible to obtain revenue sharing.
“The better you play, the more money you make,” Bell said. “The better you play, the more marketable you are. So I don’t think they should set their sights low. There is no ceiling.”
Kamari Moulton, a second-year running back from Fort Lauderdale, Florida, said he chose the UI because of the team culture. He explained financial support doesn’t always equate to a program’s
true acceptance.
“I wouldn’t go for a lot of money and you’re not at a place where the coaches really love you, in a sense,” Moulton said. “Just go where you feel you’re needed and wanted.”
Schools like the UI want to compete for championships across all sports, but the $20.5 million only goes so far in achieving that goal. Instead, Power Four schools are on a mission to “exceed the cap,” wherein extra money is brought in from third-party NIL payments, oftentimes from collectives. As the final part of the House settlement, these NIL third-party details are subjected to regulation — a process that’s caused frustration and legal skepticism.
Clearinghouse criticism
Brad Heinrichs jokingly called it the “filing cabinet in the sky.”
Heinrichs is the director of the Iowa Swarm Collective, or SWARM, an organization that facilitates NIL deals for UI student-athletes. He didn’t mince words when discussing the new NIL regulations under the College Sports Commission, or CSC, an independent association responsible for enforcing the NCAA’s new policies on revenue sharing and third-party
NIL payments.
The House settlement required all DI athletes to report any third-party NIL deal worth more than $600. This process is done via NIL Go, an online clearinghouse platform made by the CSC and the accounting firm Deloitte. The
CSC’s website claims NIL Go doesn’t calculate the fair market value of a deal, but rather that the deal serves a valid business purpose, which it defines as “the promotion of endorsement of goods or services provided for the general public for profit.”
The CSC demands all deals must have an associated status between the deal sponsor and deal facilitator, as well as an appropriate range of compensation, where athletes with similar business obligations are paid fairly. These regulations are all designed to prevent situations where the athlete receives compensation for nothing other than representing the school, informally known as pay-for-play deals.
For Heinrichs, these new rules limit the nonprofit portion of SWARM, as the CSC wants documentation of the third party’s effort to profit from the deal.
“This was the College Sports Commission trying to crush the collectives,” Heinrichs said. “The [SWARM] nonprofit component was, ‘Hey, donate to us. It’s a non-taxable contribution. And the work that’s being done by the student-athlete is for the nonprofit.’”
Heinrichs said any deal SWARM does is worth over $600, but added the approval process is taking too long. Athletes will agree to a deal with a business weeks in advance, but they might not hear back from the commission in time for their promotional event, then have to make the difficult choice of whether or not to attend.
Heinrichs said athletes can fulfill all contract requirements, but they cannot be paid until approval is received. Athletes could also risk a loss of eligibility if they do a promotional event that is rejected by the clearinghouse.
“We’re getting to the point where
student- athletes aren’t going to want to go to events anymore that they could have otherwise been making money on,” he added. “They’re worried they’re never going to get
paid for it.”
According to a Sept. 4 release from the CSC, 6,090 deals worth $35.42 million were approved from June 11 to Aug. 31, while 332 were rejected. The value of the denied deals was about $10 million.
Legal doubts, lingering questions
Ferentz is all for revenue sharing, calling it “so deserved” and a “great deal” for his players. Where he’s more hesitant, however, is third-party NIL deals.
“If we could just keep it to [revenue sharing], I’d be a perfectly happy person,” Ferentz said in a press conference. “But unfortunately, we struggle with that as a rule … I just hope at some point we can contain what’s going on with NIL and that type of thing.”
Ferentz’s wish to regulate the NIL marker is seen in the CSC, but for some, any regulation at all would violate not just federal antitrust law, but state law as well.
“The NIL restrictions that stem from the settlement I don’t think are going to last,” Huma said.
Huma points to legislation in California, Michigan, Ohio, and Virginia as examples where the House settlement’s provisions would contradict.
Michigan House Bill 4643, led by State Rep. Joe Tate, D-Detroit, a former football player at Michigan State University, is especially damning. The bill states schools can’t uphold any rule that prohibits a student of that institution’s NIL rights. Additionally, schools can’t comply with any NCAA investigation or regulation related to NIL agreements, compensation, or activities, or report any of that information to the NCAA or “association with authority over intercollegiate sports.”
Huma also rejects the term “pay-for-play” as being illegal.
“When you’re talking about somebody’s use of an arbitrary label, the concept that they can create or demonize an activity they don’t prefer by creating a label they try to demonize does not hold water in court,” he said.
For Huma, the House settlement is constructed of cards — flimsy and temporary. He said he was “alarmed and disappointed” when he first read the ruling in the summer, but believes once the legal system does its job, then athletes can obtain their true worth.
“You’re going to see a free market,” he said. “If any schools can start paying players directly as much as they want, then you’re going to see, for the first time, a free market that might exceed what the pros get.”