Game Changer: How the House v. NCAA Settlement Moves Athletes Closer to Employee Status
On June 6, 2025, a federal judge granted final approval of the landmark $2.8 billion settlement in House v. NCAA, marking yet another historic shift in the landscape of college athletics. This settlement resolves three major federal antitrust lawsuits that challenged the NCAA’s longstanding restrictions on athlete compensation.
With Judge Claudia Wilken’s long-anticipated ruling, the NCAA and its member institutions have agreed to a new model that permits direct revenue sharing with college athletes—something that would have been inconceivable just a few years ago. The decision comes just weeks before schools are set to begin issuing payments to athletes on July 1.
This moment represents more than just the resolution of litigation; it signals a fundamental transformation in how college athletes are paid and how employment is defined in the world of sports.
Why Employers Need to Pay Attention
1. Revenue-sharing looks a lot like employment.
Under the new model, schools are permitted to pay athletes directly starting on July 1, 2025, with an anticipated cap of approximately $20.5 million per year per school, subject to annual adjustments. While the NCAA still insists these athletes aren’t employees, this kind of direct compensation—structured around participation in a revenue-generating enterprise—looks and functions a lot like a paycheck.
For employers of all kinds, this raises serious questions:
- What distinguishes a compensated athlete from a traditional employee?
- How will labor agencies (like the NLRB) respond to this evolving model?
- Could a similar legal theory apply to athletes in other settings?
2. Unionization and collective bargaining are on the horizon.
We’ve already seen unionization efforts in college sports (e.g., Dartmouth men’s basketball), and this settlement may fuel momentum. Athletes now have more incentive, and arguably more legal standing, to organize around wages, benefits, and working conditions.
Sports employers, from athletic departments to minor league teams to training organizations, should assess:
- Are your athletes or contractors showing signs of collective action?
- Do your current policies comply with evolving labor laws?
- Are you prepared for a future where athletes have collective bargaining rights?
3.Title IX compliance gets more complex.
One of the biggest unknowns is how revenue-sharing will impact gender equity in college sports. While the NCAA says Title IX applies, there’s little guidance yet on how schools will balance multi-million-dollar payments to football and men’s basketball players with competing obligations to women athletes. A group of female athletes have already filed an appeal, arguing that the settlement’s back-pay formula violates Title IX.
If you’re part of a college, team, or brand affiliated with athletic programs, now is the time to:
- Reassess your Title IX risk around athlete compensation
- Build policies that ensure fair, proportional treatment
- Understand how compliance obligations may shift in this new landscape
Why This Matters Beyond College Sports
The House settlement may center on athletes, but it raises a much bigger question: when does someone who brings in money stop being a “participant” and start being an employee?
That question won’t stay confined to college sports. If schools pay athletes directly, it’s not a stretch to imagine other organizations facing similar pressure. Any employer relying on unpaid or underpaid contributors (e.g., interns, fellows, residents) should be paying close attention. This is about more than athletics. It’s about the future of work.
Questions
If you have any questions, please contact the author or a member of the Miller Johnson Employment and Labor Practice Group.