AGB Policy Alert: College Athlete Compensation Settlement Marks Watershed Moment for Higher Education Governance

Less than four years after the Supreme Court’s landmark decision in NCAA v. Alston, the governance of college athletics has entered a new and unprecedented phase. On June 6, 2025, the NCAA and the major athletic conferences reached a historic legal settlement that will, for the first time, require direct financial compensation to college athletes. The nearly $2.8 billion agreement will significantly reshape the landscape of intercollegiate athletics and poses urgent questions for higher education governing boards and leadership.

What Board Members Need to Know

• The settlement resolves three federal antitrust cases (House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA) and includes an agreement for the NCAA and major conferences to share revenue directly with athletes, starting as early as fall 2025.
• The financial commitment per school over the next decade will largely come from existing institutional athletics revenues, not new NCAA funding streams.
• This moment marks a fundamental shift in how institutions must manage the relationship between athletics and academics, with major implications for governance, budgetary priorities, and compliance with evolving federal and state law.
• The House Committee on Energy and Commerce, along with the House Committee on the Judiciary and the House Committee on Education and the Workforce, is signaling another attempt at moving legislation on name, image, and likeness (NIL) issues. The Energy and Commerce legislation, released on June 10, seeks to set a national framework for NIL that would also preempt state laws on this matter.

Key Implications for Governing Boards

• Revenue Sharing Begins: The settlement permits—but does not require—Division I institutions to share millions of dollars in annual athletics revenue with student-athletes.
• Retroactive Damages: The NCAA will pay approximately $2.8 billion in damages over 10 years to former athletes who were denied NIL opportunities under prior rules.
• NCAA Oversight: While the NCAA retains some regulatory authority, this settlement formalizes the end of the traditional amateurism model.
• Next Frontier—Employee Status and Unionization: The agreement does not resolve ongoing efforts by some athletes to be recognized as employees of their institutions under federal labor laws.

Strategic Recommendations for Governing Boards

As AGB noted in its 2021 Policy Alert on the NCAA’s NIL decision, governing boards must anticipate and respond to rapid developments in student-athlete rights. The latest settlement accelerates those developments and requires trustees to work closely with institutional leadership to:

• Assess the short- and long-term financial implications of voluntary revenue-sharing agreements.
• Ensure alignment of athletics decisions with institutional mission, academic priorities, and financial sustainability.
• Prepare for increased legal exposure, labor considerations, and reputational risk.
• Communicate transparently with stakeholders about how new policies affect student-athletes and the broader campus community.

Why It Matters

• While this legal settlement does not create new federal mandates, it creates powerful precedents—and pressures—for institutions to reassess their approach to athletics funding and student engagement.
• Boards must revisit relevant policies, clarify institutional values, and ensure appropriate oversight mechanisms are in place.
• Critically, institutions must evaluate how this settlement intersects with ongoing Title IX compliance, state legislative actions, and collective bargaining efforts now underway on some campuses.

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Questions for Governing Boards to Consider

• What is our institution’s plan to evaluate participation in the revenue-sharing framework?
• How is our institution modeling athletics budget scenarios for the next three to five years?
• What risk-management practices are in place to address athlete employment status, collective bargaining, and Title IX implications?
• How are board committees—including finance, audit, and governance—engaged in athletics oversight?

AGB’s Continued Engagement

AGB remains committed to supporting boards through this era of transformation.

• In the coming weeks, AGB will release additional guidance and convene expert roundtables to help members understand the governance, legal, and financial dimensions of this settlement.
• AGB is also supporting congressional efforts to enact comprehensive legislation that provides clear national standards for college athletics governance and protects institutional mission integrity.