The New Era of College Athletics Has Gone a Bridge Too Far

ABSTRACT 

The NCAA has always had a firm stance that to survive, it must keep its amateurism status. The NCAA had rules in place that required colleges and universities to recruit student-athletes to play for them.  It could only offer them compensation through free tuition, textbooks, room, and board; no direct money could be involved.  Over the past decades, the NCAA has grown in popularity and generated a tremendous amount of revenue. At the same time, society was noticing that the NCAA was taking advantage of the student-athlete through its amateurism rules.  The NCAA found itself constantly in court defending its actions regarding amateurism. After years of litigation, the NCAA settled out of court, resulting in the House Settlement, which created a new era in college athletics. These changes will allow student-athletes to receive financial compensation directly from colleges and universities. This new era will continue to bring a tremendous amount of financial burden to athletic departments’ budgets. This may lead to reductions in non-revenue sports, team roster sizes, and athletic staff.  

KEYWORDS: Revenue sports, non-revenue sports, House Settlement, NCAA, amateurism, revenue sharing, NIL

INTRODUCTION 

In the past, student-athletes were very satisfied with receiving an academic/athletic scholarship from a college or university that included free tuition, textbooks, room, and board. In return, student-athletes would participate in varsity athletics for the college or university.  Today’s philosophy has shifted, emphasizing that student-athletes should be directly compensated financially.  Over the past twenty years, college athletics has witnessed a massive growth in popularity that has resulted in bigger television contracts, sold-out stadiums, increased revenue from corporate sponsorships, and souvenir sales. Student-athletes started to take notice of the popularity of college athletics, financial success, and the abundance of revenue that they were producing for the NCAA, colleges, and universities. They felt they should receive more compensation than just free tuition, textbooks, room, and board. At the forefront of every collegiate student-athlete’s mind in recent years is the question: “should I be getting paid for this?” (Tremps, 2024).

Most college fans, alumni, television announcers, media, and state governments believed the NCAA, colleges, and universities were exploiting the student-athletes. They all believed that student-athletes should receive more financial compensation than just free tuition, textbooks, room, and board. After all, student-athletes were generating all the revenue.

The NCAA became a billion-dollar industry off these young men and women, and they received no monetary compensation in return. Some argued that students were getting a free education out of it, but over time, that seemed to become irrelevant to many college players (Cabibi, 2022).

Discussion

NCAA’s History with Amateurism

When the NCAA was formed in the early 20^th century, its cornerstone belief was built around amateurism and did not revolve at all around pay-to-play. Colleges and universities that were NCAA members in any division of athletics were not allowed to financially pay student-athletes directly. During its formation in 1906, the NCAA highlighted amateurism, or unpaid participation, as a core aspect of its student-athletes (Hart, 2024).  NCAA athletes playing for free has always been a feature of the product (Lombardi, 2024).

The only type of financial support that the NCAA would allow colleges or universities to offer student-athletes was free tuition, textbooks, and room and board. The trend of not paying student-athletes financially was accepted by fans, alumni, and media. It was considered an honor and a privilege of amateurism. Many fans felt that the student-athletes were playing for the pride of the college or university and the love of the game. For many fans, amateurism was an endearing aspect, suggesting that young athletes are playing for pride, the love of the game, and the honor of their institution (Lombardi, 2024).

Over the past few decades, societal thoughts have shifted around feelings of amateurism in college athletics, and now think that student-athletes should be financially compensated. The NCAA has held a firm stance on the importance of keeping the amateurism status in college athletics. If they were to allow student-athletes to be financially paid directly, other than through free tuition, textbooks, room, and board, it would significantly hurt the student-athletes’ amateur status. The NCAA prohibited student-athletes from being paid in the past to protect their “amateurism” (McCool, 2023).

With the philosophy changing about financially paying student-athletes, the NCAA found itself in the crosshairs with the media, fans, athletes, and state governments demanding that the NCAA has to do more than just allow colleges and universities to offer student-athletes free tuition, textbooks, room, and board.  They were pressuring the NCAA to eliminate its ancient rules on amateurism and allow student-athletes to be financially compensated by colleges and universities.

However, the NCAA failed to act on eliminating amateurism and stuck to its core belief about the importance of amateurism. Unfortunately, failing to act on this issue resulted in numerous lawsuits against the NCAA. Numerous lawsuits have challenged the amateur aspect of NCAA competitions (Hart, 2024).

Pressure from the media, sports broadcasters, and fans to allow student-athletes to profit from the use of their name, image, and likeness kept growing rapidly. Unfortunately, the NCAA continued to ignore the pressure to change bylaws that would allow student-athletes to do this. The failure to change its stance on this issue resulted in new state legislation.

The California State Legislature was the first to propose a bill to allow student-athletes to accept endorsement money for the use of their name, image, or likeness and not be punished by California universities. The state legislature passed this bill, and in 2019, California Governor Gavin Newsom signed the first bill to allow student-athletes to accept endorsement money. California Governor Gavin Newsom signed a bill in September 2019 stating that, starting in 2023, universities in the state couldn’t punish athletes for accepting endorsement money while in college (Moore, 2022).

The passage of California’s legislation created pressure on other states to do the same.  Passing legislation to allow student-athletes to receive compensation for their endorsement deals concerning name, image, and likeness.

NCAA’s Litigation Battles

In 2014, the NCAA found itself in litigation with NCAA v. Alston. The lawsuit brought against the NCAA was that they were violating the Sherman Antitrust Act by not allowing student-athletes to profit from their Name, Image, and Likeness. The case went all the way to the U.S. Supreme Court, and in July 2021, the U.S. Supreme Court ruled in favor of Alston. In July 2021, the Supreme Court’s ruling on NCAA v. Alston allowed college athletes to receive money based on their Name, Image, and Likeness (Munn, 2023).

The Alston ruling was a tremendous blow to the NCAA’s stance on amateurism, forcing them to adopt new bylaws that would allow student-athletes to profit from their Name, Image, and Likeness. This was a complete turnaround from student-athletes being punished for receiving financial assistance.  Members of the NCAA’s Board of Directors decided Wednesday to hop on this NIL train instead of getting crushed while trying to stand in front of it (Moore, 2022).

Litigation cases against the NCAA did not slow down after the Alston ruling. Instead, the lawsuits became bigger with more at stake financially for the NCAA, colleges, and universities. In 2020, House v. NCAA. Grant House, a student athlete who was a swimmer from Arizona State, and Sedona Prince, who was a women’s basketball player, and two other suits that were filed by college athletes. All three lawsuits against the NCAA were combined into one. A 2020 lawsuit by Arizona State swimmer Grant House and women’s college basketball player Sedona Prince, along with two separate suits by other college athletes, which were combined into one case (Jones, 2025).

The House lawsuit was based on the NCAA’s alleged violation of antitrust laws. The bylaws set by the NCAA prohibited the opportunity for student athletes to benefit financially from their Name, Image, and Likeness.  Violated antitrust law by collectively agreeing to not provide benefits and compensation to student-athletes and denying student-athletes the opportunity to profit from the use of their name, image, and likeness (Jones, 2025).

The loss of previous antitrust lawsuits against the NCAA led to the realization that the current NCAA bylaws, allowing student-athletes only to receive free tuition, textbooks, room, and board, could no longer exist. They recognized there was no chance of winning the case and decided to settle out of court. On June 6^th, 2025, Judge Claudia Wilkens approved the House settlement. The settlement would now allow colleges and universities to directly pay student-athletes for their participation in college athletics. On June 6, 2025, the Northern District of California in House v. NCAA approved a landmark settlement deal allowing colleges and universities to pay their students directly for their participation in college athletics (Cernea & Pennesi, 2025). 

The House settlement also eliminated three additional antitrust lawsuits against the NCAA, which was accused of not allowing student-athletes to profit off their Name, Image, and Likeness. The House v. NCAA settlement ends three separate federal antitrust lawsuits, all of which had claimed the NCAA was illegally limiting the earning power of college athletes (Murphy, D., 2025). The House settlement agreement also included continuation of the NIL along with back pay, roster limits, and revenue-sharing, which started July 1, 2025.

Financial Fallout from House Settlement

The most significant part of the House Settlement was the revenue-sharing agreement that required all Power Five Conferences to participate in. The agreement was put into place to allow student-athletes to be paid directly from colleges or universities. All other Division I Universities were not required to participate in the agreement, but each college or university could choose to either opt in or opt out. Schools are now free to begin paying their athletes directly, marking the dawn of a new era in college sports (Murphy, D., 2025). 

The agreement now allows athletic departments to distribute directly to the sports programs of their choosing about a fourth of their annual revenue, roughly $20.5 million, this academic year. The annual percentage of revenue-sharing will increase each academic year after that. The athletic department’s revenue comes from ticket sales, corporate sponsorships, onsite advertising, concessions, auctions, donations, and, most importantly, media rights. Schools may distribute up to 22% of their revenue from ticket sales, sponsorship revenue, and media rights (Cernea, 2025). Schools will be allotted $20.5 million of revenue per school (Cernea, 2025).

Before the House settlement, colleges and universities’ athletic departments relied on a variety of revenue-generating streams, including ticket sales, corporate sponsorships, and, most importantly, media rights to finance their athletic programs. The implementation of revenue-sharing will create tremendous financial challenges for presidents and athletic directors to keep their athletic programs profitable.

Not all Division I athletic sports offered at colleges and universities are profitable at all. However, there are some sports that either break even or generate a profit: these include men’s basketball, women’s basketball, and football. Even more profitable programs are questioning how they will come up with the money. The Associated Press quoted Alabama Athletic Director Greg Byrne, who told Congress “Those are resources and revenues that don’t exist” (Jones, 2025).

Most colleges and universities’ athletic departments’ budgets at the Division I level across the country will either end in a deficit or break even every year; very few colleges or universities’ athletic departments make a profit. According to financial filings, Alabama reported a $28 million operating deficit during the last fiscal year (Peterson, 2025).  All but a handful of Division I athletic departments operate as revenue-neutral (Schnable, 2025). 

Each year, Division I conferences receive revenue distribution from the NCAA, which helps athletic departments fund all their sports. Because of the House settlement, along with the massive legal issues that the NCAA has gone through in the past few years. The NCAA was forced to distribute less money to all Division I conferences. It’s also expected to reduce the annual distributions all D-I conferences receive, as the NCAA covers damages (Christovich, 2025).

 To survive the new era of college athletics and be competitive in athletics, presidents and athletic directors will have to redistribute monetary resources from non-revenue sports to their three revenue-generating sports. We have one team that makes a healthy profit in football. We have one that turns a profit in men’s basketball.  We have 19 that don’t,” Byrne said (Peterson, 2025).

Texas Tech Red Raiders athletic director made a clear message to the public that the new revenue-sharing model would concentrate almost all revenue-generating sports, which are football, men’s basketball, and women’s basketball. Red Raiders will allocate $15.1 million to its football roster (74%), $3.6 million to men’s basketball (17.5%), $410,000 to women’s basketball (2%) (Dellenger, 2025). 

A big challenge facing presidents and athletic directors is justifying non-revenue sports and why they should keep them. An argument can be made that non-revenue sports simply do not generate enough revenue to pay their bills. Athletic departments are under tremendous pressure to make a profit or at least break even every year. It gets harder to pay for sports that lose money, which is everything that’s not football or basketball (Talty, 2025).

 Five years ago, when the COVID-19 pandemic hit college athletics, it decreased many revenue streams that colleges and universities’ athletic departments relied on.  The pandemic forced presidents and athletic directors to find creative ways to trim their athletic budgets. They eliminated some non-revenue sports and laid off athletic support staff to balance their athletic budgets. To this day, some colleges and universities’ athletic departments still have not fully recovered financially from the pandemic.

 No one would have ever thought that college and university athletic departments would have to do the same thing again. Because of the House settlement, athletic directors and presidents will continue to look and see where cuts can be made to fund the new era of college athletics. Just as they did during the COVID-19 pandemic, they will be forced once again to eliminate some athletic support staff and some non-revenue sports.  “I didn’t think another year would be as tough as COVID [in 2020], but this year has done that,” Yurachek said (Murphy, T, 2025).

Restructuring of Athletics Programs

With the new era of college athletics now in place, athletic directors and presidents will be forced to devote more money to the three revenue-generated sports, which could inflict damage on non-revenue sports budgets. Some non-revenue sports, such as cross country, volleyball, tennis, wrestling, track and field, could either be eliminated or have their roster size reduced. Athletic budgets no longer have enough money to support all the non-revenue sports that generate zero revenue for the athletic departments.   As more NIL money is dedicated to football over all other sports on campus, many teams are at risk to be disbanded when there is no money to support their program (Stankovich, 2025).  The doomsday option is eliminating sports altogether, which some schools are already doing with sports like tennis that neither bring in revenue nor television exposure (Talty, 2025). 

A big concern about athletic departments cutting non-revenue sports is the fact that they produced many of our current or future Olympic athletes. If this does happen, many of our future Olympic athletes could be in jeopardy. Schools have outright used the House v. NCAA settlement as justification to cut Olympic sports programs (Christovich, 2025).  There are deep concerns about the potential impact on sports that feed the U.S. Olympic teams (Carey, 2025).

To help reduce financial increases, athletic departments are facing now and in the future. The NCAA has decided to move away from the standard rules of scholarship limits. Now they will impose roster sizes instead for all Division I competing sports. Unfortunately, by the NCAA implementing these new rules on roster sizes, it could effectively eliminate walk-ons. Roster limitations is expected to leave walk-ons, partial scholarship earners, nonrevenue sport athletes and high school recruits at risk (Carey, 2025).

One of the biggest revenue generators for athletic departments is NIL collectives. These collectives are organizations separate from colleges or universities’ athletic departments that generate revenue to help pay for the students’ athletic performance. Unfortunately, most collectives’ money is usually designated for the revenue-producing sports. Collectives generally pay for the athlete’s performance (Hart, 2024). NIL collectives generate revenue from fundraisers, local or national businesses, donations from boosters, alumni, and fans. Collectives are organizations that collect funds from businesses and boosters to facilitate NIL deals for athletes (Hart, 2024).

Financial Cost to Student Body and Fans

To generate more revenue for athletic departments, state legislators have gotten involved in paying student-athletes.  Legislation has been passed that will allow institutional funds from colleges or universities to be given to athletic departments to help pay student-athletes. In Missouri, a state law has existed for more than a year permitting the school’s collective to receive institutional funds for distribution to athletes (Dellenger, 2024).  Some colleges or universities either have or are in the process of raising student fees to help athletic departments pay their student-athletes. South Carolina announced a new annual $300 athletics auxiliary fee (Rumsey, 2025). 

With the implementation of revenue sharing and the NIL athletic departments are now being forced to find creative ways to generate new revenue streams. The University of Tennessee’s athletic department has found an additional revenue source in its ticket sales. They now charge each ticket purchased a 10% talent fee to generate more revenue to pay their student-athletes.  Tennessee fans for all sports will be charged a 10% “talent fee” on tickets to help pay athletes as part of the new revenue-sharing plan set to begin in 2025 (Low, 2024). During the Football bowl season, the NCAA has allowed bowl sponsorship patches to be placed on football jerseys. Now conferences and or individual schools are seeking approval from the NCAA to allow advertisement on their game day jerseys to generate additional revenue for the athletic departments. The NCAA’s expected and eventual approval of commercial jersey patches looms large (Dellenger, 2025).

CONCLUSIONS

Athletic department budgets had already been strained from the COVID-19 pandemic. There was a heavy financial toll on many college and university athletic budgets. The House Settlement created additional expenses for athletic departments’ budgets. Presidents and athletic directors know that to be competitive, they must allocate all the necessary resources that they have to their revenue-generating sports to survive financially.

The settlement has caused catastrophic destruction to college athletics. The settlement could seriously damage our U.S. Olympic stronghold; it will eliminate the walk-on dreams and take away the chance for many student-athletes’ opportunities to play college athletics. The settlement rewards only a minority of student-athletes, not the majority. It has created a new era of college athletics that is hurtful and not financially sustainable long term. Lastly, this settlement has created a new era of college athletics that has truly gone a bridge too far.