The Proposed House Settlement
As the NCAA, its major conferences, and collegiate athletes—both past and present—await final court approval of their $2.78 billion settlement, several schools are proactively unveiling innovative plans to not only survive but thrive in a new era of increasing professionalization of amateur collegiate athletics.
The proposed House v. NCAA settlement aims to address college athletes’ name, image, and likeness (NIL) rights, offering back pay to student-athletes who played between 2016 and 2024 and establishing a framework for athlete compensation going forward. The settlement includes a distribution of the roughly $2.8 billion in back pay over ten years, with a focus on student-athletes in the “Power Four” conferences (i.e., SEC, Big Ten, Big 12, and ACC) and high-profile sports (i.e., football and men’s basketball). Additionally, the settlement allows schools to manage rosters and scholarships, permits athletes to seek other NIL deals, and requires that schools directly share a portion of their athletics department revenue with players—initially using an estimated benchmark of 22% of average media, ticket, and sponsorship revenue, resulting in an annual cap of $20.5 million in revenue-sharing per school.
The University of Kentucky’s Holding Company Model
During the recently completed Kentucky General Assembly session, lawmakers in both the House and Senate unanimously adopted legislation, devised to allow the University of Kentucky (UK) and other NCAA Division I programs in the state, to implement the House settlement, if and when it is adopted.
On April 25, 2025, UK’s Board of Trustees approved a proposal to create a new holding company, Champions Blue, LLC, to manage its athletics department (UK Athletics). This model, the first of its kind among NCAA athletic programs, is designed to increase the flexibility of the department to generate additional revenue through public-private partnerships and other transactions (such as real estate), more efficiently manage enlarged expenses, protect the university from potential liability, and allow it to be more agile in navigating the new rules and regulations surrounding NIL and revenue-sharing.
The holding company structure is similar to how UK has acquired two major community hospitals in recent years, both of which report to the university and its Board of Trustees. The university is hoping to replicate the model’s proven success in another sector—each hospital has experienced job growth, higher profits, and improvements and expansion to important capital infrastructure since the acquisitions.
A new governance board, composed of UK officials and outside experts from the business and professional sports world, will provide Champions Blue and UK Athletics officials with strategic guidance and counsel. The Champions Blue Board will meet regularly to advise UK’s President and Director of Athletics on strategic decisions and opportunities for revenue growth, including expanded premium seating, fan amenities, or other revenue-generating ventures.
The University of Georgia’s Revenue-Sharing Plan
In February, the University of Georgia (UGA) announced plans to begin paying student-athletes directly starting on July 1, 2025. The revenue-sharing plan, which follows the guidance outlined in the current version of the House settlement, will initially allocate the maximum allowable $20.5 million per year to UGA’s athletes. Of that $20.5 million, $18 million will be distributed to the players as follows:
- Football – 75% or $13.5 million
- Men’s Basketball – 15% or $2.7 million
- Women’s Basketball – 5% or $900,000
- Other Sports (e.g., Baseball, Track, Gymnastics) – 5% or $900,000
The other $2.5 million will be allocated toward the addition of 100 new scholarships across UGA’s 21 sports, growing the total number of scholarship athletes to around 370. However, due to the roster limits proposed in the House settlement, UGA will see its overall number of athletes drop from approximately 550 to 475. Football, in particular, will decrease its roster size from nearly 130 players to a cap of 105.
While the projected breakdown prioritizes football and men’s basketball due to their higher revenue generation from media rights, ticket sales, and sponsorships, changing scholarship limits facilitated UGA’s signing of this year’s top-four-rated recruits for men’s track and field, something UGA’s Director of Athletics attributed to the new rules. Nevertheless, the preliminary allocation raises Title IX concerns and highlights the imbalance of football and basketball in this model compared to other non-revenue sports.[1]
Finally, it is important to note that existing NIL deals already in place between student-athletes and outside entities will continue, and that players participating in the revenue-sharing plan are free to pursue and enter into these “over-the-cap” deals that go beyond their entitled portion of the annual payout.
Further Information:
We expect universities to become increasingly competitive in their quest for market share, relevance, and a competitive edge as the collegiate athletic landscape continues to shift and evolve. UK and UGA’s initiatives are interesting creative models that other universities may seek to replicate in the future. As the line between private for-profit professional sports and amateur not-for-profit universities continue to blur, we expect universities to face increasingly complex and novel legal and tax questions as well as additional regulatory scrutiny.
If you have any questions or would like more information on the evolving NIL landscape, please contact Daniel W. Collins or Andrew J. Latona.
[1] “Non-revenue sports” refers to sports that do not produce positive revenue for the school (i.e., baseball, track and field, swimming, tennis).