The $1 Billion Experiment

Keywords: NCAA, name image and likeness, NIL, college athletics, antitrust, Title IX, athlete compensation, collectives, House v. NCAA, monopsony

1. Introduction — The Amateurism Myth Unravels

Walter Byers spent thirty-six years as the NCAA’s first executive director, building the regulatory architecture that governed college athletics from 1951 to 1987. He invented the term “student-athlete” — not as a description of reality, but as a legal shield. The phrase was designed to prevent injured athletes from claiming workers’ compensation benefits, and it worked (Gayles & Blanchard, 2018).[18] By the time Byers left the organization, the system he had constructed was generating hundreds of millions in television revenue, distributed to universities and conferences, built on the unpaid labor of athletes who were legally barred from sharing in the value they created. In 1995, Byers published Unsportsmanlike Conduct: Exploiting College Athletes, in which he described his own creation as a “neo-plantation” system — a structure where predominantly Black athletes in revenue sports generated wealth that overwhelmingly benefited predominantly white administrators, coaches, and institutional endowments (Byers & Hammer, 1995).[9] The man who built the machine named it for what it was. The NCAA spent the next quarter-century pretending he hadn’t.

The mythology of amateurism in American college athletics has never been internally coherent. The NCAA was founded in 1906 in response to football deaths — eighteen players killed in a single season — and its original mandate was player safety, not economic regulation (Smith, 2011).[38] The shift toward amateurism as an economic doctrine came later, accelerating through the mid-twentieth century as television transformed college football and basketball into billion-dollar spectacles. By the 1980s, the tension between amateurism’s ideological claims and its economic reality had become structurally unsustainable, producing a series of legal confrontations that would, over four decades, dismantle the framework entirely.

The first major fracture came in NCAA v. Board of Regents of the University of Oklahoma (1984), where the Supreme Court struck down the NCAA’s monopoly control over television broadcast rights. The decision itself was narrow — a restraint-of-trade ruling under the Sherman Act — but Justice John Paul Stevens’s majority opinion contained a concession that would haunt the NCAA for decades: the Court acknowledged that the NCAA’s restrictions on athlete compensation might be procompetitive, because they preserved the “revered tradition of amateurism” that made college sports appealing to consumers.[42] That single phrase — amateurism as a consumer product — became the NCAA’s primary legal defense for the next thirty-seven years. It was an argument about branding, not about education, and the courts eventually noticed.

O’Bannon v. NCAA (2014) cracked the foundation. Ed O’Bannon, a former UCLA basketball player, sued after discovering that EA Sports was using his likeness in a video game without compensation. The Ninth Circuit ruled that the NCAA’s blanket prohibition on compensating athletes for the use of their names, images, and likenesses violated antitrust law — but the court stopped short of requiring cash payments, instead permitting deferred trust payments capped at $5,000 per year.[43] The decision was simultaneously revolutionary and inadequate: it established that athletes had economic rights in their own identities, then immediately limited the exercise of those rights to a nominal sum. The structural principle mattered more than the dollar figure. Amateurism was no longer a legal absolute; it was a policy choice, subject to antitrust scrutiny.

Seven years later, the Supreme Court finished the job. NCAA v. Alston (2021) was technically about education-related benefits — laptops, internships, graduate scholarships — but Justice Neil Gorsuch’s unanimous opinion demolished the NCAA’s broader amateurism defense with a precision that left no room for reconstruction. The NCAA, Gorsuch wrote, was “not above the antitrust laws,” and its tradition of limiting athlete compensation was not a procompetitive justification but a restraint of trade that benefited institutions at the expense of the laborers who generated the revenue.[41]

Kavanaugh compared the NCAA’s model to a scheme in which “all restaurants in a region agreed to cut cooks’ wages” — an analogy that reframed the entire debate from one about educational philosophy to one about labor exploitation.

The NCAA’s response to Alston was not a considered policy reform. It was a capitulation. On July 1, 2021 — less than two weeks after the decision — the NCAA adopted an interim NIL policy that permitted athletes to profit from their names, images, and likenesses for the first time, subject to state laws where applicable and institutional policies where not (Romano, 2021).[33] The policy contained no federal framework, no spending limits, no disclosure requirements, no collective bargaining mechanism, and no enforcement infrastructure beyond the existing compliance apparatus that had spent decades protecting institutions from athletes rather than the reverse. In effect, the NCAA told athletes they were free to enter a marketplace, then declined to build the marketplace itself. What filled the vacuum was predictable: intermediaries.

Within twelve months, first-year NIL spending reached approximately $917 million, with projections that the figure would far surpass that threshold in subsequent years (Opendorse, 2024).[31] Approximately eighty NIL collectives — donor-funded organizations operating outside university control but with obvious institutional affiliations — emerged to channel money toward athletes, primarily in football and men’s basketball (Romano, 2023b).[35] Platform companies like Opendorse and INFLCR positioned themselves as marketplaces, taking transaction fees from deals they facilitated. Agents, financial advisors, and brand consultants descended on athletic departments offering services to athletes who had, in many cases, never signed a contract of any kind. The result was not a market in any functional sense. It was a gold rush with no assay office.

The thesis of this analysis is that the structural opacity of NIL financial flows — the absence of mandatory disclosure, standardized contract terms, fiduciary obligations, and independent oversight — benefits intermediaries at athletes’ expense. Collectives operate as de facto recruiting slush funds with charitable tax structures and no transparency requirements. Platform companies capture transaction margins from athletes who lack the leverage to negotiate fee structures. Institutional compliance offices, designed to police athletes under the old regime, now function as gatekeepers in a system where the rules change by state line. The House v. NCAA settlement, which introduces revenue sharing capped at approximately $20.5 million per institution for 2025–26 (House v. NCAA, No. 4:20-cv-03919, N.D. Cal. 2025),[40] layers institutional money atop this already opaque system without addressing the underlying information asymmetries that disadvantage athletes.

What NIL was supposed to solve — athletes couldn’t profit from their own names — it solved in the narrowest possible sense. Athletes can now sign deals. What it actually created — an unregulated marketplace where the distribution of money, the terms of contracts, and the obligations of intermediaries are functionally invisible to the public, to regulators, and often to the athletes themselves — is a different problem entirely. The amateurism myth has unraveled. What replaced it is not a market. It is a financial experiment conducted without informed consent, and the lab subjects are the only participants who didn’t choose the terms.

2. Literature Review — What Scholarship Says

The peer-reviewed literature on NIL is growing but structurally incomplete — a field still catching up to a market that moved faster than any academic publishing cycle could track. What exists clusters around three questions: whether college athletes were exploited under the pre-NIL regime, how the value of athlete labor should be measured, and what institutional effects flow from tying athletic success to financial competition. On each question, the findings are sharper than the public discourse suggests, and on the most consequential question — how much total NIL money flows, to whom, and on what terms — peer-reviewed scholarship has almost nothing to say.

The exploitation question has the deepest empirical foundation. Brook and Hellen (2024) applied Pigouvian exploitation theory — the framework that defines exploitation as compensation below marginal revenue product — to men’s and women’s college basketball at public Division I universities.[5] Their findings are damning in their specificity: approximately 25% of men’s basketball players at public D1 institutions are compensated below their marginal revenue product, meaning the value they generate for the university exceeds the value of their scholarship, cost-of-attendance stipend, and any other benefits received. Among FBS men’s basketball players — the top tier of the top division — the exploitation rate rises to nearly half. For women’s basketball, the figure is lower but not negligible: roughly 10% of players at public D1 universities are Pigouvian-exploited. The gender differential is itself analytically significant. It does not mean women’s basketball players are fairly compensated; it means fewer of them generate individual revenue that exceeds their compensation package, which is a reflection of the revenue structures universities have built around men’s sports rather than a statement about the value of women’s athletics.

Agha, Berri, Brook, and Paulson (2024) extended this exploitation framework beyond basketball, finding that wage exploitation exists in college softball — many players generate more revenue in college than they would earn as professional softball players.[1] Their study of 19,760 athletes from 294 universities between 2012 and 2021 demonstrates that exploitation in college athletics is “no longer just a man’s game.” The finding matters because it demolishes the assumption that exploitation is confined to the two sports — football and men’s basketball — that dominate the revenue conversation.

Brook (2025) constructed a counterfactual model to estimate what athletes would receive if compensated for the broadcast use of their names, images, and likenesses.[4] The median football participant would receive $4,739 annually for broadcast NIL rights — a figure that sounds modest until placed in context. The median athletic department would allocate approximately 5.4% of football media rights revenue to athletes under this model. That percentage reveals the asymmetry: institutions retain over 94% of the broadcast value that athlete participation generates.

Li and Derdenger (2025), publishing in Management Science, offered a counterintuitive finding on competitive balance: NIL may actually increase competitive balance by distributing talent more widely, especially among five-star and lower-ranked four-star recruits.[22] Their evidence challenges the dominant “rich get richer” narrative, suggesting that the ability to offer NIL compensation allows programs outside the traditional recruiting elite to compete for top talent.

The institutional effects of athletic spending have also received empirical attention. McFarland, Groothuis, and Guignet (2024) examined whether football success drives enrollment at Division I institutions, and their results split cleanly along a structural fault line: at Group of Five schools, football win percentage significantly affects the volume and quality of applications. At Power Five schools, it does not.[26] The implication is that the institutions spending the most on NIL and athletic infrastructure are doing so in a competitive environment where the marginal enrollment return on athletic investment has already been captured.

The legal scholarship adds a layer of structural warning. Ehrlich and Ternes (2025), writing in the American Business Law Journal, examined the paradox of extending antitrust immunities to college sports governance without the corresponding labor law protections that such immunities typically require.[12] Their central argument — that college athletes occupy a legal no-man’s-land between consumer and laborer, between amateur and professional — describes the exact regulatory vacuum that NIL collectives and platform companies now operate within.

The most significant gap in the literature is empirical. No comprehensive peer-reviewed study of total NIL spending by sport, by institution, by gender, or by division exists as of early 2026. The widely cited market size figures trace to industry estimates from Opendorse and On3 — platform companies with commercial interests in the market they serve — not to independent academic research. What the literature establishes is a set of structural conditions: athletes were exploited before NIL, the value of their labor is measurable and significant, institutional spending on athletics follows competitive rather than educational logic, and the legal framework governing the new marketplace lacks the protections that exist in every comparable professional context. What the literature cannot yet establish — because the data does not exist in accessible form — is whether NIL has ameliorated the exploitation or merely privatized it.

3. Market Architecture — How NIL Money Flows

The NIL market is not a market. It is a collection of financial channels — some institutional, some donor-driven, some platform-mediated, some predatory — that route money toward athletes through structures designed primarily to benefit the organizations that control the flow. Understanding where the money comes from, who handles it, and what percentage reaches the athlete is the prerequisite for any serious policy analysis.

The most credible public evidence now suggests NIL is better modeled as three adjacent markets — brand endorsements, collective roster spend, and direct institutional revenue share — whose borders are being redrawn by enforcement. Brand endorsements behave like influencer marketing with deliverables and brand ROI narratives. Collective NIL behaves like a shadow payroll with weaker observable commercial purpose. Direct institutional payments are most legible in accounting terms yet legally and politically contested because of Title IX and employment-status implications.

The structural shift from Year 4 to Year 5 is the most consequential development since the market’s creation. Collective spending is projected to collapse from $1.3 billion to approximately $227 million — an 82% decline — as institutional revenue sharing under the House settlement absorbs the function that collectives previously served. The $1.5 billion in collegiate revenue-sharing payments represents an entirely new category that did not exist before July 2025. Commercial NIL, meanwhile, rebounded from its Year 2 trough ($229 million) to nearly $1 billion by Year 4, suggesting that brand-athlete partnerships have found sustainable footing independent of the collective infrastructure.

The collective model dominated the middle years of the NIL era and remains the structural center of its financial architecture. McCarthy (2022a) identified six distinct collective types operating across Division I athletics, each with different funding mechanisms, governance structures, and degrees of institutional affiliation.[24] Charitable collectives — Hoosiers for Good at Indiana, Horns with Heart at Texas — route donor money through nonprofit structures, creating tax advantages for contributors while directing funds to athletes for community engagement activities that would not exist absent the athletic relationship. The total number of independently operating collectives reached approximately eighty by 2023, a figure that Opendorse’s subsequent reporting updated to more than 200 collectives across divisions by the market’s second anniversary (Opendorse, 2023).[30]

The concentration dynamics within this system are severe. The average NIL deal at Power 4 schools is valued at $10,477, but the median is $500 (NCAA NIL Dashboard, 2024–25). More than half of all NIL deals are worth $100 or less. The gap between average ($21,331) and median ($500–$713) total athlete earnings is the signature of a winner-take-all distribution: a small number of football and men’s basketball players pulling the average skyward while hundreds of athletes across dozens of sports earn what amounts to a weekend bar tab. Athletes with agent representation earn 5.3 times more than those without. Athletes who transfer earn 1.7 times more than those who stay (Opendorse NIL at 3, 2024).[31]

The platform layer adds a second extraction point. Barstool Sports signed 100,000 college athletes — roughly 25% of all NCAA participants — as “Barstool Athletes,” a designation that provided the company with a massive content network and provided athletes with merchandise revenue shares and social media exposure of uncertain financial value (McCarthy, 2022a).[24] The economics of that arrangement merit scrutiny: a media company acquiring exclusive promotional relationships with one-quarter of all college athletes is not an athlete empowerment story. It is a content acquisition strategy executed at scale.

The House v. NCAA settlement reshapes this architecture without resolving its fundamental opacity. The settlement introduces a revenue-sharing framework capping institutional payments to athletes at approximately $20.5 million per school for the 2025–26 academic year, rising to an estimated $32.9 million by 2034–35 (O’Brien, 2025).[28] Total estimated athlete compensation for 2025–26 reaches approximately $2.297 billion — $1.8 billion in revenue sharing, $292 million in commercial NIL deals, and $205 million flowing through collectives. Placed against total Division I athletic revenue, that figure represents roughly 12 to 13% — far below the approximately 50% share that professional athletes in the NFL and NBA negotiate through collective bargaining.

The counterintuitive finding in this market architecture is that the NIL system, as currently constructed, may be less transparent than the amateurism model it replaced. Under the old regime, the terms were clear even if they were unjust: athletes received scholarships, stipends, and cost-of-attendance payments, and everything else was prohibited. The prohibition was exploitative, but it was legible. Under the NIL regime, compensation is theoretically unlimited but practically invisible.

4. The Collective Problem — Governance Without Guardrails

The most consequential actors in the NIL economy are not the athletes whose names and likenesses gave the policy its title. They are the collectives — donor-funded intermediaries that emerged to channel booster money to players, operating in a regulatory vacuum so total that even the NCAA’s own president admitted the system runs on dishonesty.

That is not the language of an executive managing a policy transition. It is the language of a man describing a system that has already outrun its governance.

The collectives materialized almost immediately after Alston. By 2023, roughly eighty had been identified operating independently of their affiliated universities (Romano, 2023b).[35] Their legal architecture is telling: many organized as 501(c)(3) nonprofits, a tax designation reserved for charitable organizations. The structural incentive is straightforward — donors receive tax write-offs for contributions that fund direct payments to athletes. The IRS began scrutinizing whether collectives meet the charitable purpose test in 2023, issuing Chief Counsel Memorandum AM 2023-004 concluding that most NIL collectives fail the 501(c)(3) operational test. By October 2024, the IRS named NIL collectives as a 2025 compliance enforcement priority, and at least one collective received a final determination letter denying tax-exempt status. Should collectives fail that test broadly, the consequences cascade: collectives face federal income tax on earned profits, while the contributions boosters poured into them may retroactively lose their charitable deduction status.

The money, predictably, concentrates at the top. Texas leads all programs with an estimated $22.2 million in football NIL spending, followed by Ohio State ($20.2 million) and LSU ($20.1 million). Texas A&M athletes across all sports received $51.4 million in NIL revenue from July 2024 to June 2025, nearly tripling their allocation from the prior year — but the gender distribution within that figure reveals the structural reality: $49.2 million (95.7%) went to men’s sports, $2.2 million (4.3%) to women’s. In their first year of operation, collectives diverted more than $200 million from traditional athletic fundraising channels (McCarthy, 2022b).[25] Every dollar a donor routes through a collective to fund a quarterback’s NIL deal is a dollar that does not fund a training facility, a compliance office, an academic support center, or — and this is the part no one building the system bothered to model — an Olympic sport that generates no revenue and survives entirely on institutional subsidy.

The compliance gap is the table’s most important finding. The $127 million cleared through NIL Go by December 2025 represents a fraction of the estimated third-party NIL market — the basketball market alone is estimated at $500 million. Deloitte’s retroactive assessment — that 70% of past collective payments would have been denied for not reflecting fair market value, while over 90% of payments from public companies would have been approved — quantifies the distance between what collectives were doing and what a transparent market would permit.

The top three reasons for deal denial illuminate the mechanism: (1) lack of a valid business purpose, (2) no direct activation of the athlete’s NIL rights — what the CSC calls “warehousing” — and (3) compensation not commensurate with similarly situated individuals. Each reason describes a different species of the same genus: payments disguised as NIL deals that are functionally pay-for-play.

The market also contested the rule definitions themselves. In late 2025, the CSC revised its “valid business purpose” guidance to avoid returning to court, effectively expanding interpretive room for collective-related deals if they meet substantive criteria. That is not a footnote — it is the mechanism by which enforcement becomes economic policy. The denial-rate split matters because it explains strategic behavior: collective- and booster-associated deals were far more likely to trigger denial than public-company-style brand deals — a split that, if sustained, creates channel substitution pressure rather than simply “better compliance.” Market participants do not stop spending; they restructure spending to pass through channels that clear review.

Congressional intervention, meanwhile, has produced heat but no statute. The SCORE Act, introduced in July 2025 by Representative Gus Bilirakis, would codify the House settlement, grant the NCAA limited antitrust immunity, and preempt state NIL laws — but it was pulled from the House floor in December 2025 after bipartisan opposition and GOP defections. The SAFE Act, introduced by Senators Cantwell, Booker, and Blumenthal, takes a competing approach: codifying athlete rights without prohibiting employee classification and requiring reinvestment of pooled media revenue into women’s and Olympic sports. Neither bill has advanced to a vote.

The collective, in its current form, is an accountability void with a tax exemption. It exists because three entities — the NCAA, Congress, and the IRS — each assumed one of the other two would impose order. None did.

5. The Gender Equation — Title IX Meets the Market

NIL was supposed to be the great equalizer — athletes, regardless of sport, finally compensated for the commercial value they generate. The market decided otherwise. Through 2024, approximately 73.5% of all NIL compensation flowed to male athletes (Opendorse data; Rukstalis, 2023).[37] Among collective-distributed funds — which represent approximately 82% of total NIL payments — less than 3.5% went to women. The raw numbers tell the same story at higher resolution: at six major universities that reported by gender in 2024, men earned $92 million in NIL income; women earned $19 million. Only nine women appeared among the top 100 NIL earners. Men’s basketball players in major conferences averaged $171,272 in NIL compensation in 2024; women’s basketball players averaged $16,222 — a 10.6:1 ratio (LeRoy, 2025).[21]

The counterintuitive finding is in the commercial market. Strip away collective money — the booster-funded, donor-driven payments that overwhelmingly target football and men’s basketball — and women compete on genuinely equal terms. SponsorUnited’s NIL marketing partnership tracking reports men represent 57% of NIL deals and women 43% overall; among the top 100 most-endorsed athletes by deal volume, women represent 52% versus men at 48%.[17] A narrow but important qualification applies: SponsorUnited is measuring brand partnership activity (deal volume), not total compensation. Some secondary reporting asserts women captured a majority share of top-100 endorsement dollars; the publicly accessible SponsorUnited report emphasizes deal counts rather than fully audited dollar values, so those dollar-share claims should be treated as plausible but not independently auditable from the public report alone. Women’s basketball surpassed men’s basketball in total commercial NIL activity share for the first time in Year 3.

The commercial market is not discriminating against women athletes. Collectives are.

That distinction — commercial deals versus collective payments — is the fault line on which Title IX’s application to NIL will be decided. In January 2025, the Biden Department of Education issued a fact sheet declaring that school-facilitated compensation constitutes Title IX-covered financial assistance (Bowers, 2025a).[2] Eighteen days after the Trump administration took office, the DOE reversed course: “Title IX does not apply to name, image and likeness deals.” The distance between those two positions is the distance between a regulatory framework and a free-for-all.

Buzuvis (2025), writing in the Fordham Law Review, concluded that Title IX’s equal treatment requirements apply to NIL compensation.[8] The revenue-sharing projections under House make the structural tilt explicit: football would receive $15.3 million (75% of shared revenue), and women’s basketball $234,000 — 1.1% of the total. Eight female Division I athletes filed with the Ninth Circuit on June 11, 2025, arguing the back-pay distribution violates Title IX.

Recent peer-reviewed work has sharpened the gender analysis beyond compensation data. Gonzales and Short (2025), writing in the Journal of Business Venturing Insights, examined the female athlete’s dilemma in the NIL era — the tension between leveraging personal brand for commercial value and navigating institutional expectations around femininity, appearance, and athletic identity.[16] Sailofsky (2025), in the International Review for the Sociology of Sport, explored the contradictions of NIL, gender, and feminism, arguing that the system privileges a narrow mode of feminine self-presentation as the primary path to NIL value for women athletes — a structural incentive that complicates any straightforward narrative of empowerment.[38]

Women’s sports revenue is growing four to five times faster than men’s, but it still accounts for less than 2% of total U.S. sports revenue. The growth rate matters more than the current share — it signals a market correction that NIL’s compensation structure has not yet absorbed. The policy question is whether Title IX will be interpreted to force that correction institutionally, or whether the market will be left to close the gap on its own timeline while a generation of women athletes subsidizes the transition with uncompensated brand-building labor.

6. Predatory Vehicles — Hedge Funds and Exploitative Contracts

The stated purpose of NIL was to end a specific form of exploitation: athletes generating billions in commercial value while being prohibited from capturing any of it. The unstated consequence was the creation of new exploitation vectors — more sophisticated, better capitalized, and aimed at the same population of financially unsophisticated young people the old system failed.

Big League Advantage, a private fund, represents the clearest example. BLA provides college athletes with upfront capital in exchange for a percentage of their future professional earnings. The firm’s own framing is careful: “Players receive capital — not loans — and a player keeps the funds whether or not he ever makes it to the next level” (Romano, 2023a).[34] The distinction between “capital” and “loan” is doing significant legal work. A loan carries regulatory protections — disclosure requirements, usury limits, default provisions governed by state and federal law. An equity stake in a human being’s future labor carries none of those guardrails, because no regulatory framework exists to govern it.

The Gervon Dexter case exposed the terms at their sharpest. While at the University of Florida, Dexter agreed to pay Big League Advantage 15% of his future professional earnings for 25 years in exchange for $436,485. He was drafted in the second round of the 2023 NFL Draft by the Chicago Bears and subsequently sued to invalidate the contract.[39] The arithmetic is clarifying. A second-round pick’s four-year rookie contract averages roughly $8–10 million. Fifteen percent of Dexter’s professional earnings over a quarter-century could reach seven figures on a $436,000 investment. The return profile resembles venture capital. The difference is that venture capital invests in companies with boards, auditors, and fiduciary obligations. BLA invested in a teenager.

The exploitation is not limited to high-finance vehicles. YOKE, a gaming platform, offered student-athletes $20 in endorsement compensation “in exchange for extensive rights, most of which are perpetual, royalty-free, and irrevocable” (McCarthy, 2022a).[24] Twenty dollars for permanent, unlimited commercial use of an athlete’s name, image, and likeness. The contract terms are the kind that would trigger immediate red flags if presented to an athlete with legal representation — which is precisely the point.

Institutional capital has noticed the opportunity. Redbird Capital Partners and Weatherford Capital launched “Collegiate Athletic Solutions,” bringing private equity infrastructure to the NIL space. The entry of institutional investors signals that the NIL market has matured to the point where professional capital allocators see arbitrage in the gap between what athletes understand their rights to be worth and what those rights can be purchased for. That gap is the margin. The athlete is the commodity.

For decades, the NCAA’s amateurism model was criticized — correctly — as a system in which institutions extracted economic value from athletes while prohibiting those athletes from participating in the market their labor created. NIL dismantled the prohibition. It did not dismantle the extraction. It privatized it. The extractors changed; the extracted did not.

7. House v. NCAA and the Revenue-Sharing Frontier

The settlement arrived not as resolution but as architecture — the kind that determines who builds and who gets built around. House v. NCAA (2024) produced a $2.8 billion agreement spread across ten years, compensating athletes retroactively for revenue they were prohibited from earning before July 1, 2021. The dollar figure made headlines. The structural consequences did not.

Judge Claudia Wilken presided — the same federal judge who oversaw O’Bannon v. NCAA and Alston v. NCAA, a continuity that signals how far the judicial branch has moved while the legislative branch has stood still. Revenue sharing under House is opt-in, not mandatory. Schools may share up to 22% of average Power 4 revenue with athletes — roughly $20.5 million in 2025–26, scaling to an estimated $32.9 million by 2034–35 (O’Brien, 2025).[28] The distinction between “may” and “must” is the entire ballgame. A permissive cap without a floor means that the wealthiest programs can use revenue sharing as a recruiting weapon while mid-majors and FCS schools absorb the regulatory burden without the financial upside.

Three hundred eleven schools opted in. Fifty-four opted out — including three service academies, eight Ivy League schools, and forty-three others. FCS institutions voiced “strong objections” during settlement negotiations, arguing that they were being asked to shoulder “an unfair burden of costs associated with revenue sharing” despite having no seat at the table where terms were negotiated (Romano, 2024).[36] The Senate Commerce Committee’s analysis quantified the widening gap: revenue differences between Power conference schools and everyone else have increased approximately 600% since 2002.

Revenue-sharing distribution projections reveal the internal hierarchy the settlement preserves rather than disrupts. Football commands $15.3 million (75%), men’s basketball takes $3.3 million (16%), women’s basketball receives $234,000 (1.1%), and all remaining sports split the balance. The economic logic is straightforward — distribute revenue proportional to the sports that generate it. The consequence is equally straightforward: the settlement codifies a two-sport economy inside a framework that governs thirty-plus sports.

The financial architecture carries tax implications that most coverage ignores. Revenue sharing transforms the university-athlete financial relationship from a scholarship model (excludable from gross income under Section 117) to something closer to compensation (reportable as income). At least two states — Arkansas and Mississippi — have moved to exempt NIL income from state taxes, creating yet another layer of regulatory arbitrage between jurisdictions.

Seven appeals remained pending as of late 2025, and the settlement’s durability is not guaranteed. The non-revenue sport cost is not hypothetical: more than 41 Division I programs have been cut since May 2024, affecting over 1,000 athletes. Seventy-five percent of U.S. Olympians come from collegiate programs. Grand Canyon University cut men’s volleyball despite a 2024 Final Four appearance. When the revenue flows to athletes in two sports and the cost structure remains fixed, the difference comes from somewhere — and that somewhere is typically non-revenue sports, support staff, and graduate positions.

The post-House system did not end federal interest. It escalated it. In July 2025, the White House issued an executive order framing NIL as a system-risk issue, addressing athlete employment status and Olympic sport preservation; as of March 2026, Reuters reported that the president called on Congress to address soaring college athletics costs and signaled potential further executive action (Reuters, 2026).[15] The National Conference of State Legislatures published guidance on “what the NCAA settlement means for colleges and state legislatures,” acknowledging that the patchwork of thirty-plus state NIL laws now collides with a federal settlement framework that neither preempts them nor harmonizes them (NCSL, 2025).[14]

Colvin and Jansa (2023), publishing in the Policy Studies Journal, found that state-level NIL law adoption was driven by “athletic reputation competition, not economic competition” — states with high-value football programs moved first, using NIL legislation as a competitive positioning tool rather than an athlete welfare measure.[10] House inherits this dynamic at the national level. The settlement is a competitive instrument that happens to benefit athletes, not an athlete welfare instrument that happens to affect competition. The order of those clauses determines what the next decade looks like.

8. The Labor Question — Athletes as Employees

The economic argument was settled before the legal one. For at least two decades, labor economists have demonstrated — with increasing precision and decreasing institutional patience — that major-conference athletes generate revenue far exceeding their compensation.

Economists have long viewed the NCAA as a cartel — “a formal economic agreement among agents or organizations that would normally compete with one another to not compete in some dimension” (Humphreys, 2012).[20] The cartel agreement operates on the input side: NCAA member organizations compete for players but have agreed not to compete on a price basis. Rotthoff and Mayo (2010) demonstrated the rent-dissipation mechanism: the cartel’s surplus doesn’t accumulate as institutional profit but gets reinvested in coaching salaries and facilities — inputs that maintain the cartel’s competitive structure while keeping athlete compensation fixed.[23]

The marginal revenue product estimates have grown more precise over time. Brown (2011) estimated that a premium college football player’s MRP exceeded $1 million based on 1990s data.[6] Brook and Hellen (2024) refined the methodology using total variable revenue, finding that approximately 25% of men’s basketball players and 10% of women’s basketball players are compensated below their MRP at public Division I universities.[5] Even under the House settlement’s projected $2.297 billion in total athlete compensation, Division I athletes would receive roughly 12 to 13% of total revenue — far below the approximately 50% share that professional athletes negotiate through collective bargaining.

The racial demographics of this arrangement carry weight that economic models alone do not capture. In Division I men’s basketball, 57% of scholarship athletes are Black; in FBS football, the figure is 56.3%. At the University of Kentucky during the 2016–17 academic year, football and men’s basketball rosters were 59% and 57% Black, respectively, against a campus-wide Black enrollment of 6.8% — and those two programs generated $36 million and $28 million, constituting 52% of total athletic department revenue (Gayles & Blanchard, 2018).[18]

The legal front has moved faster than the legislative one. In Johnson v. NCAA (2024), the Third Circuit held that college athletes cannot be categorically barred from asserting claims under the Fair Labor Standards Act.[40] Separately, an NLRB regional director ruled in February 2024 that Dartmouth men’s basketball players could be classified as employees, and the team voted 13–2 to join SEIU Local 560 — the first certified bargaining unit of college athletes in U.S. history. The union subsequently withdrew its petition in January 2025, anticipating that incoming Trump administration NLRB appointees would overturn the precedent.

Peer-reviewed research has begun to quantify NIL’s recruiting effects directly. Owens (2025), publishing in Applied Economics, found measurable impacts of NIL contracts on NCAA football recruiting outcomes.[27] Pitts (2025), in the Journal of Sports Economics, documented the immediate impact of NIL on college football recruiting, confirming that the availability of NIL compensation functions as a recruiting input rather than merely a post-enrollment benefit.[29]

The tax dimension adds a layer of complexity that most athletes are not equipped to navigate. Messina and Messina (2022), writing in the Journal of Athlete Development and Experience, provided a primer on the income tax consequences of NIL earnings — all NIL income is taxable as self-employment income, subjecting athletes to federal and state income taxes plus self-employment tax.[27]

Ehrlich and Ternes (2025) identified the structural danger in this liminal space: extending bargaining rights to college athletes without NLRA protections “heightens the risk of ‘sham’ labor groups that allow employers to structure labor groups favorably.”[12] The danger is not that athletes will become employees. The danger is that they will be granted some of the responsibilities of employment — tax liability, contractual obligation, performance accountability — without the corresponding protections: minimum wage guarantees, workplace safety standards, collective bargaining rights, unemployment insurance. Half-measures in labor law do not produce half-outcomes. They produce new categories of vulnerability.

9. Conclusion — Transparency as the Minimum Standard

The $1 billion experiment has run for five years without an audit. NIL money has flowed through collectives structured as nonprofits, hedge fund vehicles marketed to teenagers, and institutional slush funds disguised as academic support — and no single entity has the authority, the mandate, or the data to determine whether the system is functioning as intended. The question of intent itself is generous. The system was not designed. It emerged — from a patchwork of state laws, a Supreme Court decision that declined to address the core question, a settlement negotiated by the institutions that created the problem, and a congressional vacuum that five years of hearings have failed to fill.

The structural opacity is not incidental. It serves specific interests. Collectives operating as 501(c)(3) organizations offer tax deductions to donors while functioning as athlete payroll intermediaries — a tax arbitrage that benefits boosters and collective operators while exposing athletes to income tax liability on payments they receive. Hedge funds and private equity vehicles offering NIL advances against future earnings target athletes as young as seventeen, converting projected professional potential into present-day financial obligation. Platform intermediaries take transaction fees on every deal brokered. In each case, the intermediary captures value from the athlete’s labor and likeness while bearing none of the reputational or competitive risk the athlete shoulders.

The market is real. The question was never whether athletes generate measurable revenue — the MRP literature demolished that debate years ago, documenting gaps between value produced and compensation received that reach six and seven figures for individual athletes in football and men’s basketball.[5][4][20] The question was always how compensation would be structured, who would control the architecture, and whether the athletes at the center of the system would have access to the information necessary to make informed decisions about their own economic lives.

Five years in, the answers are not encouraging. Less than 3.5% of collective money reaches women athletes. The median NIL deal is worth $500. The clearinghouse created by the House settlement has processed $127 million in deals against an estimated third-party market exceeding $1.3 billion — capturing roughly 10% of market activity while the other 90% operates outside any reporting framework.

A functional system would require more than a clearinghouse. It would require mandatory disclosure of all NIL transactions — not self-selected reporting above an arbitrary dollar threshold. It would require independent oversight, meaning regulatory authority vested outside the conferences and institutions that generate the revenue being distributed, because self-regulation by interested parties is not regulation. It would require athlete protections against predatory contracts: caps on future-earnings deals, mandatory cooling-off periods, access to independent legal counsel before signing agreements with financial implications that extend beyond the athlete’s playing career. And it would require Title IX compliance mechanisms that account for revenue sharing — because a framework that distributes 75% of shared revenue to football and 1.1% to women’s basketball does not become gender-equitable simply because the settlement document does not mention gender.

The historical arc bends toward disclosure, but it does not bend on its own. The NCAA’s 1950s invention of “student-athlete” laundered a labor relationship into an educational one. Byers himself recanted. O’Bannon cracked the commercial licensing wall. Alston established that the NCAA could not cap benefits without antitrust exposure. House opened the revenue-sharing frontier. Each step eroded the fiction of amateurism — and each step was resisted by the institutions that profited from the fiction until courts forced the concession. The pattern is consistent across seven decades: the NCAA does not reform voluntarily. It reforms judicially, then claims the reform as its own.

What replaces amateurism will be defined in the next five years. The infrastructure being built now — the clearinghouses, the compliance frameworks, the revenue-sharing models, the collective structures — will calcify into the permanent architecture of college athlete compensation. If that architecture is built on the same opacity that characterized the first five years of NIL, it will serve the same interests: institutional, intermediary, and administrative. The athletes whose labor generates the revenue will remain the least-informed participants in their own market.

Transparency is not a sufficient condition for a fair system. But it is the minimum standard for determining whether the system is fair at all — and five years into the most radical restructuring of college athletics since the NCAA’s founding, even that minimum has not been met.