Student Athlete Compensation: A Complicated Past … and Uncertain Future

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Over the past few years, the collegiate sporting industry has experienced unprecedented growth. In 2025, the top 75 collegiate athletics programs grew in value by 8% to over $51 billion, and private equity firms began investing in the growing market. But despite the evolution of collegiate sports into a business capable of rivaling professional sports, and the development of brands and personalities by its athletes, student-athletes have never received appropriate compensation. Although the past decade has marked incredible progress in ensuring college athletes’ right to compensation, questions remain about how student-athletes will be paid and what their future relationships with universities and the NCAA should look like.

Historically, the NCAA has restricted the compensation of student-athletes. Students could receive tuition compensation from athletic scholarships, but were restricted from receiving other educational benefits (postgraduate or vocational scholarships) and non-educational benefits. In 2014 and 2015, a group of current and former Division I athletes filed an antitrust lawsuit against the NCAA, arguing that the NCAA’s compensation policies were anticompetitive by placing unreasonable limitations on the potential rewards student-athletes could receive for their work. 

The Supreme Court unanimously ruled in favor of the athletes in NCAA v. Alston (2021), holding that the NCAA violated the Sherman Antitrust Act of 1890. Justice Neil Gorsuch noted that the NCAA enjoyed “monopsony power in the relevant market,” leaving student-athletes with no alternatives for seeking better compensation and thus engaging in horizontal price-fixing. Concluding that “the NCAA’s business model would be flatly illegal in almost any other industry in America,” the Court mandated the NCAA to lift its restriction on all educational benefits for student-athletes. Although the Court did not rule on the NCAA’s restriction against non-educational benefits, Justice Brett Kavanaugh noted in a concurring opinion that such restrictions could also violate antitrust law and form the basis for future litigation.

Although Kavanaugh’s concurrence was by no means legally binding, the prospects of future litigation influenced the NCAA to announce in June 2021 that it would allow each student-athlete to profit from their Name, Image, and Likeness (NIL), granting student-athletes the legal right to control the commercial use of their image. Student-athletes were now allowed to profit from endorsements, their businesses, and brand deals. In the absence of federal regulation to structure the boundaries of NIL deals, the NCAA declared that state laws would determine the scope of NIL activities. For states without existing NIL laws, the university would be responsible for drafting NIL guidelines. 

While the Alston ruling and subsequent NCAA policy change were a large victory for student-athletes, they were by no means a panacea. One persisting problem is that different state policies on NIL regulations result in significant cross-state disparity in compensation. The National College Players’ Association ranked state NIL laws on a scale from 1 to 100, with high numbers denoting more student-athlete-friendly outcomes. Scores ranged from as high as 90 to as low as 43. New Mexico has a stellar NIL law, providing athletes the freedom to pursue medical expenses and insurance from third parties and allowing them to be paid in money for a wider range of endorsements. In contrast, Illinois’s NIL law is much less comprehensive, not requiring colleges to educate athletes on financial or life skills and not providing representation to negotiate non-NIL deals. Although several efforts, including the recent SCORE Act, have sought to create a national framework for NIL laws by empowering the NCAA to regulate NIL deals, nothing has come to fruition yet. Until the NIL law is brought under a single national framework, cross-state inequities will continue to persist.

Furthermore, although schools were allowed to coordinate fundraising activities with NIL customers, inform students of NIL opportunities, and help match student-athletes with deals, the NCAA still prohibited schools from negotiating on behalf of NIL customers or directly paying students. In 2019, six former college athletes sued the NCAA, claiming that they should have been classified as “employees” under the Fair Labor Standards Act (FLSA) and various state employment laws, and thus awarded compensatory minimum wage and overtime payments. Although the Third Circuit Court of Appeals did not directly side with the athletes in Johnson v. NCAA (2024), it rejected the NCAA’s argument that the “amateurism” of student-athletes precluded the possibility of them being considered employees, proposing an economic realities analysis to determine whether (and which) students could be classified as employees.

While the prospect of student-athletes being classified as employees (and thus requiring wage compensation) seems promising, there were concerns as to whether athletes would be able to meet all four criteria established by Johnson. In the Third Circuit’s concurring opinion, Judge David Porter expressed concerns about the consistent application of the economic realities test to over 200,000 student-athletes, as well as his belief that only men's football and basketball players would be likely to satisfy the legal definition of employment. Consequently, Johnson has yet to revolutionize the expectations of compensation for student-athletes, as many had hoped.

As the employment argument stalled in court, student-athletes turned to other channels to secure compensation. The NCAA generates a substantial portion of its revenue from lucrative broadcasting deals. College athletes were never entitled to any share of those deals because they were considered unpaid “amateurs.” However, in the wake of Alston’s and Johnson’s attack against the “amateurism” argument, as well as a trio of antitrust lawsuits, the NCAA faced mounting pressure to change its broadcasting regulations. In response, the NCAA moved to settle all three lawsuits in 2024, and a final approval hearing was held in April 2025. The settlement agreement on House v. NCAA was formally approved in June 2025 by Judge Claudia Wilken, simultaneously ending all three antitrust lawsuits.

As part of the settlement, the NCAA agreed to backpay $2.78 billion to former student-athletes and construct a new revenue-sharing model to compensate current and future student-athletes, including the payment of $20.5 million annually to Division I schools over a ten-year span. Thus, the House settlement provides a solid basis for compensation and for schools to directly pay their athletes.

Moving forward, however, the future of student-athlete compensation remains uncertain. For one, the House settlement creating an expectation of compensation does not necessarily mean that those expectations will be realized. $20.5 million is not enough to pay each student-athlete their market value, and some students may not receive any money. Schools would likely direct most of that money towards high-revenue sports, such as men's football and basketball. Such a practice would raise issues over equity and Title IX compliance. Disproportionate payment to male athletes may violate Title IX’s requirement to “provide reasonable opportunities for each sex in proportion to the number of students of each sex.” However, because an individual’s NIL market value depends on the specific sport he or she plays, the market share generated by each sport may be sufficient to determine Title IX compliance. Regardless, when the settlement deal ends after ten years, the expectation of compensation once again disappears, even if schools retain the right to pay their athletes.

If student-athletes are to completely and permanently upend the NCAA in its current form, they will likely have to successfully argue that they satisfy the criteria set out in Johnson to secure employment status and protections. In particular, stronger arguments will need to be presented in defense of the second criterion (that college athletes perform services “necessarily and primarily” for the college’s benefit) and fourth criterion (that college athletes perform services “in return for expressed or implied compensation or in-kind benefits”). The House settlement makes it easier to satisfy these criteria, but the expansion of employment status to student-athletes would, in turn, raise questions about tax regulations, immigration law for international student-athletes, and Title VII compliance (employment discrimination). Thus, while the past decade provides hope, the future of student athlete compensation is by no means certain.

Alex Goldfarb is a sophomore concentrating in Applied Mathematics - Economics and Political Science. He is a staff writer for the Brown Undergraduate Law Review and can be contacted at alexander_goldfarb@brown.edu.

Natalia Riley is a junior concentrating in Economics and International and Public Affairs. She is a staff editor for the Brown Undergraduate Law Review and can be contacted at natalia_riley@brown.edu.

Simon Juknelis is a sophomore concentrating in Computer Science and Applied Mathematics. He is a staff editor for the Brown Undergraduate Law Review and can be contacted at simon_juknelis@brown.edu.