Big changes coming in college sports after Federal judge approves settlement. Here’s what to know.

U.S. Judge Claudia Wilken granted final approval of the settlement of the House v. NCAA class-action lawsuit on Friday evening. The settlement is set to distribute almost $2.8 billion in name, image, and likeness back pay and additional compensation to former and current Division I athletes over 10 years. It also establishes a direct revenue-sharing model between participating Division I institutions and their athletes.

The settlement is considered the most revolutionary change to collegiate athletics since the 2021 Supreme Court ruling that found the NCAA in violation of antitrust laws, opening the door to NIL payments. Here’s how the House settlement will impact Division I schools, including Philadelphia’s, moving forward:

Temple and Drexel are the only Big 5 schools that have publicly stated their intent to opt in to the post-House revenue-sharing system. Villanova, La Salle, and St. Joseph’s are expected to do so as well, but they have not publicized details. The deadline for schools outside the defendant conferences to formally opt in to revenue sharing is June 15.

As the only Big 5 school with an FBS program, Temple’s situation is different from its Philly rivals. The American Athletic Conference became the first NCAA conference to institute a minimum investment standard for its member institutions. All members of the conference, except Army and Navy, have agreed to commit at least $10 million in additional benefits to their athletes over the next three academic years.

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The only Big 5 school that has expressed intent to opt out of the House settlement is Penn. The Ivy League announced in January that it would not adopt the revenue sharing agreement.

The decision to opt out will not affect Ivy institutions’ standing as Division I programs or their NCAA championship status. Ivy athletes still can benefit from third-party NIL opportunities but not direct payment from schools.

Every school that opts in to revenue sharing is expected to be able to distribute up to $20.5 million among its athletes. The cap figure, which has yet to be made official, is 22% of the average athletic revenue of a power-conference institution, and will increase annually over the next decade.

Schools do not have to spend $20.5 million, and many wouldn’t be able to do so anyway. The cap figure is based on the average media rights contracts, sponsorship revenue, and ticket sales of Southeastern Conference, Big Ten, Big 12, and Atlantic Coast Conference schools.

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St. Joe’s and La Salle will not have $20.5 million to pay athletes, and neither will other Atlantic 10 schools. In most conferences, with the exclusion of Temple’s AAC, individual schools will choose how much they spend on their athletes.

Schools will be allowed to directly pay players through the revenue sharing system beginning July 1.

The House settlement will eliminate the athletic scholarship as it is currently understood. Instead of the traditional full scholarships awarded in “headcount sports” like men’s and women’s basketball and the FBS, all sports will become “equivalency sports,” in which a sport has a total amount of scholarship money that can be divided and distributed across a team.

An element of the conversion of all sports to “equivalency sports” is the introduction of roster limits. Before the House settlement, a team had no roster limit. Only the scholarship money available for those players was limited. Now, teams will have to adhere to a cap on the number of players rostered.

For instance, men’s basketball teams will have 15 roster spots in 2025-26, as opposed to 13 scholarship spots and extra room for nonscholarship players in 2024-25.

Concerns over the implementation of a cap on roster spots was one of the major holdups for the settlement’s approval, which was expected to be signed off at a hearing in April. Some were concerned that the hard limit would require teams to cut players to adhere to the new rules.

The revised settlement created protection for athletes currently on college teams and relaxed the transitory period between scholarships available and roster spots. Teams now have the option to designate players that otherwise would have to be removed from the roster as exceptions to the roster limits. Those players will not count toward that team’s limit for the remainder of their college careers.

As outlined in Temple’s House settlement FAQ page, there are protections mandating that an institution cannot “reduce, cancel, or fail to renew” an athletic scholarship for “athletics reasons,” including “roster management decisions.” Even with this protection, many college and high school athletes were impacted by the House-era change before it was approved.

The NCAA will reduce revenue distribution to all Division I institutions, which are expected to fund 60% of the nearly $2.8 billion in NIL back pay and additional compensation over the next decade that is owed to approximately 400,000 current and former athletes. The reduction of revenue distribution to a given school is independent from the number of athletes from that school that opt in or opt out of the settlement. The NCAA is responsible for funding the remaining 40% of the payments.

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Back pay is divided into three categories: broadcast NIL, video game NIL, and lost NIL opportunities. Of the nearly $2.8 billion compensation, $1.98 billion is allocated to the three NIL categories, while $600 million is set aside for additional compensation.

The specific amount distributed to athletes based on the sport they played and in which conference they played was based on estimations calculated by Daniel Rascher, a sports economics professor at the University of San Francisco.

FBS players will receive 75% of the $600 million additional compensation fund, while men’s basketball players will receive 15%, and women’s basketball players will receive 5%. The remaining 5% will be allocated to other athletes included in the settlement.

Checks for NIL back pay will be the first action of the approved settlement. The revenue-sharing elements of the settlement, including the reporting of athletes’ third-party NIL agreements, will take effect July 1. Roster limits, with designated athletes excepted, will be enforced at the start of the 2025-26 academic year for fall sports and Dec. 1 or the first day of competition, whichever is first, for winter and spring sports.

There is a possibility of further legal action against the NCAA, specifically regarding classifying athletes as employees, something that is not addressed in the House settlement.

In July, the U.S. Court of Appeals for the third circuit held that, depending on surrounding circumstances, NCAA athletes may be considered employees under the Fair Labor Standards Act. The case on which the third circuit appellate court ruled, Johnson v. NCAA, led by former Villanova football player Trey Johnson, remains in litigation.

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The settlement could be appealed to the 9th U.S. Circuit Court of Appeals. If there is an appeal from objectors to the settlement, payments still would begin July 1. Objectors to the settlement would need a stay to stop the agreement’s forward-looking actions, such as revenue sharing.

The NCAA and its president, Charlie Baker, have led an effort to lobby Congress in favor of a bill that would grant antitrust protection to the NCAA, based on the terms of the House settlement. The bill also would declare college athletes as students and not employees.

Regardless of further legal movement, the effects of the House settlement will radically change the way athletic departments, teams, and college sports operate.