College sports changed forever on July 1, 2025, as athletes became eligible to receive direct payments from their schools. The new revenue-sharing model, which allows schools to distribute up to $20.5 million each year to athletes, is already facing legal scrutiny.
The method used to calculate this cap is under the microscope, and the NCAA is being pressed for transparency as the landscape of college athletics shifts.
NCAA Revenue Sharing Settlement Faces Legal Questions
The House v. NCAA settlement took effect today, July 1, marking a pivotal moment in college sports. For the first time, schools can share up to $20.5 million annually with their athletes, ending decades of amateur-only rules. However, questions about the accuracy of the cap calculation are casting a shadow over the celebration.
A judge just approved a $2.8 billion NCAA settlement. Schools can start paying athletes $20.5 million a year, and $2.7 billion will go to former players as back pay in arguably the biggest change in college sports history. pic.twitter.com/YHCYEiO8wf
— FearBuck (@FearedBuck) June 7, 2025
Steve Berman, co-lead counsel for the settlement, has demanded answers from the NCAA about how it determined the $20.5 million figure, which represents 22 percent of Power Four conference revenues.
In a recent interview, Berman said, “For the sake of getting this started July 1, we are willing to use” $20.5 million as the cap. “But if that turns out to be different, there must be some adjustments… We have questions about the information we’ve gotten.”
Berman’s concerns focus on whether the NCAA categorized revenues correctly during its calculations. His legal team is reviewing the financial data that sets the cap and will determine how much money college athletes receive.
“We are asking for information,” Berman said. “We’re going back and forth with the NCAA about what information they have given us. If we’re not satisfied, we’ll go to Judge Cousins.”
This investigation is significant for college basketball and football programs across the country. The settlement resolves three major antitrust lawsuits and provides $2.8 billion in back payments to former athletes.
Under the new system, football players are expected to receive about 75% of the profit sharing, men’s basketball players will get 15%, women’s basketball players will receive 5%, and athletes in all other sports will share the remaining 5%.
The $20.5 million cap was initially projected to be around $22 million, but the final calculation came in lower than some expected. This difference is fueling Berman’s investigation into the NCAA’s financial reporting process.
“This will not happen overnight. We’re asking questions about all of this. That’s our job. … We don’t know that there’s a controversy.. We are examining all of this stuff, ensuring revenue was put into the right bucket.”
Looking ahead, the cap is set to grow at an estimated 4% compound rate each year. By 2035, the cap could reach about $33 million, although Berman’s willingness to involve Judge Cousins suggests that legal challenges could arise if the NCAA cannot clearly explain its calculations.
Schools must now report all payments in the College Athlete Payment System and follow new oversight rules. The College Sports Commission (CSC) is responsible for compliance and will conduct its own investigations into possible violations.
As the landscape of college basketball and athlete compensation continues to evolve, the ongoing questions about the revenue-sharing cap highlight the complexity and uncertainty facing college sports today.
