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House settlement explained: How Louisville Cardinals, Kentucky Wildcats would be impacted

Roughly five years after its initial filing, the House v. NCAA settlement is still awaiting a decision from the courts.

It’s one of the most talked-about lawsuits in the history of college athletics. And for good reason. If approved, the settlement would establish a first-of-its-kind revenue-sharing model between schools and athletes.

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Industry leaders have been operating for months under the assumption that the agreement would go through this spring and go into effect July 1, including those at the University of Louisville and the University of Kentucky. But they’ve yet to receive the all-clear.

Here’s everything you need to know about the settlement, including how Kentucky’s two major schools are planning for two different futures: one where the agreement is approved and one where it’s not.

What is the House v. NCAA settlement?

The proposed House settlement stems from the merging of three different lawsuits filed by current and former Division I athletes against the NCAA: House v. NCAA, Hubbard v. NCAA and Carter v. NCAA.

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Plaintiffs Grant House (former Arizona State swimmer) and Sedona Prince (former Texas, Oregon and TCU basketball player) filed a class-action complaint in June 2020 alleging that the NCAA violated antitrust laws by restricting athletes’ ability to profit off their name, image and likeness. Former Oklahoma State running back Chuba Hubbard and former Duke defensive tackle DeWayne Carter filed similar complaints against the NCAA and power conferences. Judge Claudia Wilken, who previously presided over the Alston v. NCAA lawsuit finding the NCAA in violation of antitrust laws by capping the value of athletic scholarships, later consolidated the House suit with Hubbard and Carter.

On Oct. 7, Wilken granted the House settlement preliminary approval. That version of the settlement would provide $2.8 billion in back damages to athletes who could not profit off their NIL between 2016 and Sept. 15, 2024. It would also bring revenue sharing to college sports starting July 1 with a projected cap for 2025-26 of $20.5 million per school. But one aspect of the agreement has delayed her final decision by nearly two months.

Instead of scholarship limits, the version of the House settlement Wilken granted preliminary approval to established roster caps. Objectors spoke out against roster limits at the April 7 final approval hearing in Oakland, California. Afterward, Wilken gave attorneys two weeks to amend the roster limit concept. She suggested grandfathering in athletes already on existing rosters. Executives from the Power Four conferences — Big TenSECACC and Big 12 — agreed to an optional grandfathering-in model for schools.

The settlement has been back in Wilken’s hands since May 16.

How will settlement money be distributed?

As the settlement currently stands, $2.8 billion would be provided to college athletes who could not profit off their NIL between 2016 and Sept. 15, 2024. These athletes had to file objections to or claims to be part of the settlement before Jan. 31. About 40,000 filed claims suggesting they would participate in the settlement, Front Office Sports reported in February.

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The backpay is to be doled out over 10 years — 60% by the NCAA from its reserves and 40% from schools.

In addition to damages, the House settlement would bring revenue sharing to college sports starting July 1 with a projected cap for 2025-26 of $20.5 million per school. How that money is divvied up will be left to individual institutions.

Louisville athletics director Josh Heird told The Courier Journal at ACC spring meetings that U of L knows how it will distribute the $20.5 million among its varsity sports but declined to share exact numbers. Kentucky athletics director Mitch Barnhart told the CJ at SEC spring meetings that, rather than establishing firm percentages for each program, Kentucky will take a less rigid approach to meet each sport’s needs year in and year out.

Front Office Sports reported that power conference schools are expected to dedicate 75% of the $20.5 million toward their football programs. Texas Tech’s reported breakdown gives 74% to football, 17% to 18% to men’s basketball, 2% to women’s basketball, 1.8% to baseball and the rest to other sports. That’s $15.17 million for football, $3.69 million for men’s basketball and $410,000 for women’s basketball.

How much are college athletes getting paid?

College athletes would make money through revenue-sharing agreements with their schools and still be eligible for third-party NIL deals if the settlement is approved. However, the NIL market would be more heavily monitored than it is now under an enforcement structure that some industry leaders are skeptical of.

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All NIL deals exceeding $600 will have to be reported to and pass through a clearinghouse called “NIL go,” starting three days after the settlement is approved. NIL go will be operated by Deloitte with the purpose of assessing athletes’ fair market value.

Officials from the clearinghouse have been sharing data about past deals with athletics directors and coaches over the last several weeks, including

  • 80% of NIL deals with public companies were valued at less than $10,000;

  • And 99% of those deals were valued at less than $100,000

Those numbers are a far cry from the millions collectives have reportedly spent on athletes over the last four years or so. Restricting compensation in this way feels, to some, like a bit of a step backward.

“They’re just encouraging people to cheat again,” Dan Furman, president of Louisville’s official collective 502Circle, told The Courier Journal.

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SEC Commissioner Greg Sankey spoke about the clearinghouse at spring meetings. When asked directly if he had confidence in these guardrails, Sankey said yes.

“People are going to have opinions,” he said. “Nothing ever worked when people sat around and said, ‘Well, this won’t work.’ We’re adults, we’re leaders, and I think I communicated this (recently), we have a responsibility to make this work.”

Why roster limits are delaying Judge Claudia Wilken’s decision?

Instead of scholarship limits, the version of the House settlement Wilken granted preliminary approval to established roster caps. This structure would cause thousands of athletes across the country to lose their spots — mainly in football and Olympic sports. Objectors spoke out against roster limits at the final approval hearing in Oakland on April 7.

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Wilken told attorneys they needed to fix this issue or else she would reject the settlement. She suggested grandfathering in athletes already on existing rosters. Executives from the Power Four conferences came back with an optional grandfathering-in model for schools.

Objectors then argued for mandatory grandfathering, but lawyers from the NCAA and power conferences maintained that their proposal should satisfy Wilken’s demands and solicit approval.

What does Kentucky’s NIL bill say?

Several states have laws permitting schools to directly pay college athletes — including Kentucky. The commonwealth passed Senate Bill 3 in March, amending its previous NIL legislation so state universities could legally operate within the House settlement’s proposed revenue-sharing model.

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Ross Dellenger of Yahoo! Sports reported in early May that athletics directors predict many schools will use state law to begin paying athletes, regardless of whether Wilken denies the settlement. One AD told Yahoo!: “What can the NCAA do about it?”

What will Louisville do if Judge Claudia Wilken rejects House v. NCAA settlement?

If Wilken denies the settlement, U of L will likely move forward with paying its athletes directly, Heird told The Courier Journal at ACC spring meetings.

“That’s probably the path we would go down,” Heird said. “Just from the standpoint of the more control you can have of the situation, the better. It’s been a little bit disjointed with outside entities, collectives, doing things. So I would presume that’s the road we would go down.”

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Should the settlement get denied, U of L wouldn’t be beholden to the $20.5 million cap. Instead, paying athletes would just “be a budget constraint,” Heird said. “But I’d contend it’s a budget constraint now.”

What is Kentucky’s NIL budget? 

UK, like all other universities, will be limited to $20.5 million to share with its athletes under the settlement’s current terms. This $20.5 million represents 22% of the average revenue of power conference schools and Notre Dame across eight categories, including but not limited to ticket sales and media rights. UK totaled $129.2 million across those categories, according to its 2023-24 NCAA financial report.

Barnhart told The Courier Journal at SEC spring meetings that, rather than establishing firm percentages of the $20.5 million for each program, Kentucky will take a less rigid approach to meet each sport’s needs year in and year out.

What is Louisville’s NIL budget? 

U of L, like all other universities, will be limited to $20.5 million to share with its athletes under the settlement’s current terms. This $20.5 million represents 22% of the average revenue of power conference schools and Notre Dame across eight categories, including but not limited to ticket sales and media rights. Louisville totaled $105.5 million across those categories, according to its 2023-24 NCAA financial report.

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Heird told The Courier Journal at ACC spring meetings that U of L knows how it will distribute the $20.5 million among its varsity sports but declined to share exact numbers.

Reach college sports enterprise reporter Payton Titus at ptitus@gannett.com, and follow her on X @petitus25.

This article originally appeared on Louisville Courier Journal: What is the House settlement? How U of L, UK would be impacted

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