By Sabria McElroy
On June 6, 2025, US District Judge Claudia Wilken granted final approval to one of the most significant antitrust settlements in sports history in House v. NCAA. The settlement resolves a trio of antitrust cases, all of which challenged NCAA’s amateurism rules as anticompetitive, by creating a $28 billion fund to compensate past athletes who were harmed by then existing restrictions on opportunities to profit from the names, image, and likeness, or NIL. It also includes significant injunctive relief with three main components. First, it eliminates scholarship limits and replaces them with roster limits. Second, the settlement allows schools to make direct payments to athletes. Beginning with the 2025-26 academic year, each Division I school may spend up to $205 million per year—set to rise with revenue growth—on direct payments and benefits for athletes. And, third, the settlement implements new restrictions on NIL deals between athletes and “Associated Entities” or “Individuals”—primarily targeting booster groups and collectives that had been circumventing previous compensation limits. NIL agreements worth more than $600 must be reported to a new centralized clearinghouse overseen by the new College Sports Commission (CSC), who can police and potentially veto NIL deals with “Associated Entities” or “Individuals” if it determines that they exceed “fair market value.”
Proponents of the House settlement argue that it provides a structured framework for direct athlete compensation that satisfies antitrust concerns while regulating NIL payments from “Associated Entities,” thereby eliminating the pay-to-play abuses that had become common over the past few years. But the NCAA’s antitrust battles are far from over: the settlement’s own provisions face legal challenges as anticompetitive restraints, while the new market reality undermines the legal foundations that previously protected other NCAA rules.
Of the injunctive relief elements of the settlement, the most susceptible to attack is the revenue sharing cap. Although the new rules now allow schools to compensate athletes, the agreed limit on the amount that can be paid out by each school to athletes remains a form of wage fixing. And since the settlement was not product of collective bargaining, the direct spending cap is not shielded from antitrust scrutiny. The new restrictions on athlete NIL deals may also open the door to suits by collectives whose NIL deals with athletes are rejected by CSC. While the NCAA can point to procompetitive justifications for scrutinizing NIL deals with associated groups, the restrictions limit boosters’ participation in the market and they may be able to argue that less restrictive alternatives exist.
Additionally, by fundamentally altering the market for the labor of NCAA Division 1 college athletes, the House settlement will create new openings for plaintiffs to target other NCAA rules on antitrust grounds. To begin, the settlement firmly undermines NCAA’s defense of rules that do not directly restrict athlete compensation, which previously had enjoyed some success For example, in Gaines v. NCAA (1990), the court rejected an antitrust challenge to the NCAA’s “No Draft Rule,” which, at the time, stripped collegiate eligibility from football players who enter the NFL draft but aren’t selected. The Gaines court held the rule was “non-commercial” and thus not subject to antitrust scrutiny, emphasizing that the “overriding purpose of the eligibility Rules...is to prevent commercializing influences from destroying the unique ‘product’ of NCAA college football” 746 F Supp 738, 744 (MD Tenn 1990). This rationale has evaporated in the post-House world, where Division I athletics is now an explicitly commercial enterprise in which athletes receive substantial direct payments and NIL compensation. Any rule that limits an athlete’s ability to take advantage of these opportunities is now potentially open to challenge and will not be insulated by “amateurism” justifications.
The NCAA’s ability to invoke amateurism as a defense had already significantly weakened in the wake of the Supreme Court’s 2021 decision in in NCAA v. Alston, which struck down NCAA restrictions on education-related benefits and confirmed that NCAA’s compensation rules must be analyzed under the rule of reason Days later, on July 1, 2021, the NCAA’s interim rule change allowing brands to pay student athletes for use of their NIL went into effect. Those shifts laid the groundwork for NCAA’s recent string of losses in cases challenging its transfer restrictions and “four seasons rule,” which gives athletes five calendar years to compete in four-seasons of intercollegiate athletics. Recently, however, the NCAA prevailed in a blanket challenge to the four seasons rule in Zeigler v. NCAA. Previous cases had successfully challenged the same rule but centered on the impact of time spent playing in junior college or a different division on the five-year clock. Zeigler, in contrast, had already played 4 years of Division I basketball and he argued that he should be able to play a fifth—and continue to profit from his NIL—in graduate school.
Although the court rejected Zeigler’s challenge days after final approval of the House settlement, it declined to consider the “economics that may come to pass if NCAA member institutions implement the House settlement,” Zeigler v. NCAA, n 3, and instead relied on an analysis of the market as it existed before the settlement. Critically, the Zeigler court concluded that the plaintiff had not shown anticompetitive effects because “Defendant [NCAA] does not control who receives NIL compensation” and therefore lacks the power to set NIL wages in the student-athlete labor market Id. at 7. This reasoning is already at odds with the House settlement’s new reality where the NCAA and its member institutions have the power to set direct compensation wages under the settlement’s salary cap.
Future antitrust challenges to the four seasons rule, as well as other long-standing NCAA rules and those that resulted from the settlement, will likely leverage this new market structure. And Plaintiffs will now have a stronger argument that those restraints operate in a demonstrably commercial marketplace that is still dominated by NCAA.
McElroy is a partner in Boies Schiller Flexner’s Fort Lauderdale office. Her practice focuses on representing clients on both the defense and plaintiff’s side in highstakes disputes involving antitrust, financial services, and technology issues. McElroy has been recognized as a Lawdragon 500 Leading Litigator, one of Global Competition Review’s 2025 Women in Antitrust, and by Bloomberg Law in 2022 as one of the nation’s Top 40 Lawyers Under 40 in the antitrust practice area.
This article was first published at Sports Litigation Alert on July 10, 2025.