Article
NIL 2.0: The new era of college athletics
Aug. 6, 2025 · Authored by Katlyn M. Andrews
As of mid-2025, the regulatory and legal landscape surrounding Name, Image and Likeness (NIL) in collegiate athletics continues to evolve. What began as a patchwork of state laws and institutional policies has matured into a more structured—though still evolving—framework that is reshaping the collegiate sports ecosystem. Recent developments—including a landmark class-action settlement, shifting NCAA policies, the growing influence of NIL collectives and increased institutional involvement—continue to change how NIL is managed and implemented across collegiate athletics.
The House settlement: A billion-dollar turning point
In June 2025, Judge Claudia Wilken approved a class action settlement (i.e., the House settlement) that marked a historic shift in collegiate athletics and fundamentally changes how student athletes are compensated beginning this academic year.
The House settlement, involving the NCAA and the Power Five conferences (ACC, Big Ten, Big 12, Pac-12, and SEC), seeks to resolve claims related to past NIL restrictions and sets the stage for a new compensation model for collegiate athletics.
Unless amended on appeal, key components of the House settlement include:
- Revenue sharing – The member institutions of the Power Five conferences must share a portion of their athletic revenue with student athletes, subject to a revenue sharing cap estimated at $20.5 million per school for the upcoming academic year. Non-Power Five Division I institutions can choose to opt in to revenue sharing by notifying the NCAA by March 1st of each upcoming academic year. Once opted in, institutions must comply with settlement obligations, including the revenue sharing cap, roster limits and reporting requirements. Division II and Division III schools are not part of the settlement and are not eligible for revenue sharing under the House framework.
- Athletic scholarships and roster limits – For schools that opt-in, the NCAA is eliminating sport-specific scholarship limits but will impose new roster limit rules. Exemptions to the roster limit rules exist for current athletes with remaining eligibility.
- NIL deals – Student athletes can continue to receive compensation from third parties as long as the deals are made for valid business purposes and reflect fair market value. Under the settlement, student athletes are required to report third-party NIL deals exceeding $600 to their schools and a third-party clearinghouse (i.e., NIL Go). This reporting requirement is part of a broader effort to ensure transparency and compliance with the settlement’s terms, particularly regarding fair market value and preventing disguised pay-for-play arrangements.
- Backpay damages – Over ten years, the NCAA and Power Five conferences will pay $2.78 billion in damages to current and former student athletes for denied NIL opportunities under previous NCAA rules.
The NIL-recruiting ban: Legal pushback and policy reversal
In early 2025, the NCAA paused enforcement of its NIL-recruiting ban following a preliminary injunction issued in a lawsuit brought by the Attorneys General of Tennessee and Virginia. The court found that the ban potentially violated antitrust laws by restricting communication about NIL opportunities during recruitment and transfer processes.
The NCAA has since agreed to permanently repeal the NIL recruiting ban, effectively opening the door for NIL to become a formal part of the recruiting process and reshaping how schools and collectives engage with prospective athletes.
NIL collectives: From gray area to governance
NIL collectives are third-party organizations that pool resources to fund athlete endorsements and have become central players in the NIL ecosystem. While initially operating in a regulatory gray zone, the CSC revised its guidance to clarify their permissibility under the House settlement framework. As of July 31, 2025, the CSC clarified that collectives can pay student athletes so long as those deals “have a valid business purpose related to offering goods or services to the general public for profit and fall within the range of fair market value compensation.”
NIL deals with collectives are expected to be evaluated in the NIL Go portal to determine whether the deals are valid based on three criteria:
- The relationship between the payor and the school
- Whether the deal has a “valid business purpose”
- Whether the deal falls within a compensation range comparable to “similarly situated individuals” (i.e., fair market value)
The role of collectives may evolve as institutions assume a more direct role in NIL facilitation, but they continue to be a significant mechanism for athlete compensation.
What’s next?
The 2025–26 academic year begins a new NIL model that includes direct institutional payments, continued collective activity and ongoing legal oversight. While the House settlement and related legal developments offer clarity, they also raise new questions about competitive balance, Title IX compliance and the operational logistics of implementing revenue-sharing models across diverse athletic programs.
Institutions must now determine how to integrate NIL into existing governance structures, manage financial implications and ensure equitable access across sports and athlete demographics. As regulatory bodies, schools and legal stakeholders continue to interpret and apply these changes, the broader implications for the collegiate athletics model remain under active discussion.
We can help.
- Assess the institution’s policies and procedures relating to athletics and compliance
- Capture the roles and responsibilities between offices that are involved in compliance related activities
- Assess the institution’s current athletics environment
- Evaluate current procedures to assess compliance with current regulations
- A clear understanding and communication of controls in place to facilitate compliance with existing requirements, regulations and policies
- A facilitated discussion with key process owners to foster communication across groups and encourage collaboration
- A specific analysis of controls in place to deliver effective compliance processes
- Actionable recommendation to address identified gaps, challenges, risks or enhancement opportunities based on requirements and industry leading practices
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