What the House vs NCAA settlement approval means for Michigan Athletics

After 59 months of negotiations and hearings on the House vs NCAA case, it has finally been approved by Judge Claudia Wilken. Today, we examine what the settlement does and how it will impact Michigan Athletics:

The National College Athletic Association (NCAA) has been around since 1906. In its 119-year history, institutions have never directly paid athletes (legally). That has all now changed, as Judge Claudia Wilken approved the House settlement on Friday in the U.S. Northern District of California, 59 months after the initial class-action House vs NCAA suit was filed.

The settlement arose out of three different lawsuits over the issue of compensation for collegiate athletes. More than 390,000 current and former college athletes acted as the plaintiffs in the suit, and the defendants were the NCAA and five athletic conferences.

After more than a year of negotiating, the saga finally comes to a close.

What exactly does the settlement do

Beginning July 1, schools will be able to share $20.5 million with athletes, with football expected to receive 75 percent of the share, followed by men’s basketball (15 percent), women’s basketball (five percent) and the remainder of sports (five percent). The amount shared in revenue will increase annually. This number will act as base pay for the athletes competing in Division I programs, earning money at the school’s discretion of how they want to split up the funds.

The second main thing regards back-pay for athletes who competed in collegiate sports dating back to 2016, but were unable to capitalize on their Name, Image and Likeness (NIL). Instead of facing $20 billion in back damages, “the NCAA and Power Five conferences signed off on a 10-year settlement agreement that includes $2.776 billion in back damages.”

The NCAA is responsible for paying $277 million annually over the next decade. It has been estimated that 60 percent will come from a reduction in distribution to institutions, and the NCAA is expected to come up with the other 40 percent, which will come through reducing operating expenses, according to On3 .

The third issue was oversight. The NCAA is a self-disciplined machine. All suspensions, investigations of wrongdoing and eligibility hearings were done in-house. Judge Wilkins wanted to ensure the beast of revenue sharing had enough checks and balances, so she approved of an “NIL clearinghouse .”

Titled “NIL Go” and run through Deloitte , “all third-party NIL deals of $600 or more must be approved by the clearinghouse.” If not approved, the settlement says a new third-party arbiter could deem athletes ineligible or result in fines to the school. This could even the playing field by cutting out the fake deals or forcing college coaches to be more transparent, but it also could be the most controversial if that information is made public.

The final topic heavily debated surrounded roster limits. At the preliminary approval hearing on Oct. 7, 2024, the two sides agreed to increasing the number of scholarships each football team can distribute to 105 by next fall, but it would not allow for any walk-on spots or other non-scholarship players over the 105 limit. It worked similarly for other non-revenue sports increasing the number of scholarships given out, but reducing the overall roster size.

When Wilkens met with the attorneys from both sides to approve the settlement in April, she made them go back to the drawing board, pushing back strongly against roster limits and asking that roster spots be grandfathered in.

Under the new agreement, athletes who had their positions cut will be eligible for reinstatement at schools’ discretion. It also permits athletes who leave or are not kept by their current school to keep their grandfathered status at a new school. Proposed rosters include 105 spots for football, 15 for men’s and women’s basketball, 34 for baseball, 28 for men’s and women’s soccer, 25 for softball and 18 for volleyball. This will go into effect at the start of the 2025-26 academic year.

“Despite some compromises, the settlement agreement nevertheless will result in extraordinary relief for members of the settlement classes,” Wilken wrote in her 76-page final opinion. “If approved, it would permit levels and types of student-athlete compensation that have never been permitted in the history of college sports, while also very generously compensating Division I student-athletes who suffered past harms.”

How does this impact Michigan

This is a massive win for University of Michigan athletes, but it is also a difference-maker in staying competitive for years to come. The university already has one of the largest budgets in college athletics and the second-largest alumni network in the country, and it has already generated more than $30 million in NIL funds, putting it in the top tier of college athletics.

Between flipping Bryce Underwood, landing the No. 1 ranked basketball transfer in Yaxel Landeborg, and having banner-hanging seasons in softball, men’s gymnastics and men’s basketball, the Wolverines are already at the top of the college athletics totem pole, and that should not change given the investments already made.

Michigan also has untapped areas of revenue it hopes to cash in this next academic year. Athletic Director Warde Manuel announced last fall that Michigan was looking into putting sponsorships and advertisements in the Big House , something Michigan has never done since Michigan Stadium was built in the 1920s. What was originally a survey has since been put into practice, and fans saw advertisements and videos played throughout the 2025 spring game. This untapped revenue space could generate $15-20 million next year alone, making up for the $20.5 million in revenue sharing the athletic department is expected to dish out.

Manuel also introduced alcohol sales to sporting events in 2024. After the Wolverines’ first full season since the state legalized in-stadium sales in 2023, the university reported a profit of $5 million in alcohol sales , including $4.6 million at football games alone. With such a successful year, you can expect even more of this moving forward.

Finally, Michigan’s Athletic Department has publicly supported revenue sharing for a while, and Manuel has even said they will not be cutting any varsity sports. That may not be the case at every school, and we could see major shake ups across college sports outside of Ann Arbor.

The bottom line is Michigan is prepared and equipped for the settlement. As previously stated, it creates a base pay for athletes in revenue-generating sports, but the NIL collectives will still serve as the sprinkles and whipped cream on top of the sundae for all college athletes. Champion Circle, Hail Impact, and Stadium and Main will not be going away, and neither will Michigan football general manager Sean Magee .

If you thought the introduction of NIL was a big change, just wait. This is the beginning of one of the biggest changes in American sports history, and we are witnessing it in real time.