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A landmark class-action settlement is poised to transform the business of college sports, paving the way for student-athletes to receive direct compensation for both past participation and future revenue sharing.
The agreement covers athletes from 2016 to 2024 and includes $2.8 billion in back pay to be distributed over 10 years. Starting in July 2025, each Division I school will also be able to share up to $20.5 million annually in athletic revenue with student-athletes under a new compensation model.
Fritz Metzinger, a sports attorney at Stone Pigman, tells Daily Report that while the NCAA will shoulder a significant share of the back pay, schools will also be required to contribute.
“The majority of it, based on a formula the NCAA and the schools came up with, is going to go to football, men’s basketball and women’s basketball players,” Metzinger says. “Not all of it, but a vast majority of it.
“As of July 1 for the 2025-2026 season, all power conference schools and any other Division I school that that opts in that wants to is going to be able to share up to, for this first year, about $20.5 million in athletic department revenue directly with their athletes,” Metzinger says. “They don’t have to share that full amount. Technically, under the settlement, they can allocate it however they choose.”
While individual schools can tailor how they distribute payments, LSU is expected to follow the NCAA’s damages-based formula: 75% to football, 15% to men’s basketball, and 5% each to women’s basketball and all other sports.
The allocation could raise concerns about underfunding successful nonrevenue programs, such as LSU’s baseball, gymnastics, and track and field programs.
“For LSU, I think it’ll benefit them, because the salary cap is about average for a power conference university,” Metzinger says. “LSU does better than that. They’re a successful athletic program, but they’ve got some interesting sports that excel but aren’t traditionally huge revenue builders.”
The settlement also includes provisions for a new College Sports Commission, which will oversee name, image and likeness deals exceeding $600, particularly those involving boosters or collectives.
“They’re going to review whether the deal is with a booster or a collective and then they’re going to see if the deal and the value of the deal is for a real business purpose,” Metzinger says. “Is it really a commercial, a sponsorship deal to appear in a few commercials for business, and are they getting paid? Or is it millions of dollars and the true purpose is to get somebody to come and play for their program?”
In March, Louisiana Gov. Jeff Landry issued an executive order shielding state postsecondary institutions from penalties by the NCAA or athletic conferences for facilitating NIL compensation. The order remains in effect until either a federal NIL law is enacted or the settlement takes effect.
While no conflicting statutes are currently in place, lawmakers have previously considered exempting NIL earnings from state income tax—legislation that could reemerge.
Metzinger anticipates additional legal challenges ahead.
“Federal law is going to be the only thing that calms it down,” he says. “But until then, there are going to be more lawsuits and more questions.”
Meanwhile, the Associated Press reported this week that eight female athletes have filed an appeal of the NCAA antitrust settlement, contending that women would not receive a fair share of the back pay allocated to athletes previously barred from profiting off their name, image and likeness.
