The landscape of college athletics is entering uncharted territory. On June 6, 2025, final approval of the $2.8 billion House v. NCAA settlement resolved three major antitrust lawsuits and authorized direct revenue sharing between Division 1 schools and their athletes. This development represents a major departure from the NCAA’s longstanding model of amateurism and carries significant implications for the legal status of student-athletes.
Direct Compensation and Legal Implications: Johnson in the Era of the House Settlement
The House settlement permits schools to distribute up to $20.5 million annually to athletes and expands their rights to name, image and likeness (NIL) compensation. With the settlement now a reality, schools are actively preparing to distribute significant settlement funds to their student-athletes. This unprecedented shift, from amateur participation to direct compensation, places increased pressure on institutions to reevaluate how student-athletes should be classified within their organizations.
Institutions affected by the House settlement should consider how the Johnson v. NCAA case reframes the criteria for when a student-athlete may be considered an employee. The Johnson decision moves away from the traditional amateurism defense and introduces the “economic realities” test, which requires schools to assess the nature of their relationship with each student-athlete based on compensation, control, and benefit conferred.
Economic Realities Test:
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