Higher education institutions and student-athletes are navigating continuing uncertainty about institutional revenue-sharing payments and the Title IX implications of the landmark House v. NCAA settlement. 

The $2.8 billion settlement that Judge Claudia Wilken approved on June 6 authorizes Division I colleges and universities to compensate athletes directly for the use of their name, image, and likeness (NIL). In addition to compensatory back pay for pre-2021 NIL restrictions, the settlement implements a new revenue-sharing framework.

The settlement has already received a number of challenges from student-athletes on Title IX grounds, which prohibits sex-based discrimination in any education program or activity that receives federal funding. The appeals are an early indication of the potential upcoming pushback to the House settlement payment models. As higher education institutions await the start of the school year, administrators should consider several key legal questions and steps to address them. 

Title IX Compliance Risks and Legal Challenges 

Under the settlement, the distribution formula for the $2.8 billion back pay damages fund directs approximately 90% of that money to football and men’s basketball players, 5% to women’s basketball players, and 5% to athletes in all other sports. This allocation has triggered significant Title IX scrutiny.

On June 11, eight female student-athletes filed an appeal with the Ninth Circuit Court of Appeals, arguing that the back pay formula violates Title IX by disproportionately compensating male athletes. They allege a shortfall of approximately $1.1 billion in compensation for female athletes. Just a few days later, a second group of female student-athletes filed a similar appeal of the back pay portion of the settlement on Title IX grounds. Since then, additional appeals have been filed challenging the agreement’s terms and damages distribution.  

Judge Wilken rejected Title IX objections during the lengthy settlement approval process, citing the antitrust nature of the case, but explicitly left the door open for future challenges regarding direct payments. The result of those challenges, which have now come to fruition, is that the back pay damages are temporarily suspended until the appeals are processed. Student-athletes who were expecting compensatory damages checks to be signed at the beginning of July 2025 will not receive those payments until the Ninth Circuit resolves the pending appeals.

The revocation of existing scholarship limits and implementation of new roster caps for each team may also present Title IX challenges. Under the settlement, institutions that opt in will be held to sport-specific roster limits, many of which will require coaches to cut student-athletes to maintain compliance. However, opt-in schools were able (but not required) to designate athletes who were cut or who would have been cut due to the House settlement if they were on a Division I roster as of April 7, 2025. "Designated Student-Athletes" will be allowed to continue participating with their team (or with a new team if they transfer) but will not count against a team’s roster limit. Those Designated Student-Athletes, however, will continue to count as participants and as recipients of athletics financial assistance for Title IX purposes.

Though back pay (and back pay only) is paused, uncertainty remains about institutional revenue-sharing payments going forward. As federal guidance vacillates and judicial decisions loom, schools implementing prospective revenue-sharing models may face Title IX challenges if those distributions are not closely aligned with gender equity metrics or supported by nondiscriminatory factors.

Key Legal Questions for Higher Education Institutions

• Does Title IX apply to NIL revenue-sharing? Under Biden-era guidance (subsequently rescinded by the Trump administration), the U.S. Department of Education’s Office for Civil Rights (OCR) asserted that NIL payments flowing through athletics departments are indeed subject to Title IX because they are part of an education program or activity. That OCR guidance suggested that revenue-sharing dollars should be made equitably available to male and female student-athletes, in line with decades of Title IX precedent. Although that guidance has been revoked, athletics departments may choose to voluntarily allocate NIL payments in a manner similar to athletics scholarships (proportionate to the gender breakdown of that institution’s athlete population) or to non-scholarship financial assistance (equitably available, with distributions supported by legitimate, nondiscriminatory justifications) to potentially mitigate Title IX risk.
   
• Are current institutional practices equitable? Even absent direct agency guidance, institutions must ensure gender equity in the provision of athletic scholarships, treatment and benefits, and participation opportunities. This includes maintaining equitable publicity and support services to men’s and women’s teams.
   
• What is the scope of institutional exposure? Depending on the ways in which Title IX is found to govern direct NIL payments, schools may risk noncompliance if those funds are not made equitably available or are allocated disproportionately without legitimate, nondiscriminatory justifications. Robust, proactive gender equity reviews may mitigate legal risk for Division I schools that have opted into the House settlement’s restructuring of collegiate athletics.

Potential Actions for Higher Education Institutions

1. Conduct Gender Equity Audits: Evaluate your athletics department's current Title IX compliance across each of the 13 program areas: participation opportunities, scholarships, and OCR’s "laundry list" of treatment and benefits. Include NIL revenue-sharing plans in the audit scope.
    
2. Align Revenue Distribution Models: Consider adopting distribution plans that are proportionate to the gender composition of your athletics department to potentially mitigate Title IX risk.
    
3. Document Decision-Making: Maintain clear documentation of revenue allocation rationales for your institution’s chosen model, including legal reviews and policy considerations, to avoid perceptions of bias or inequitable treatment.
    
4. Engage Title IX Counsel: Proactively involve legal counsel in NIL payment policy design, contract drafting and negotiation, and implementation to reduce liability and strengthen compliance frameworks.
    
5. Prepare for Additional Litigation: Develop contingency plans, including setting aside funds for potential litigation expenses if your institution has publicly disclosed compensation models that may appear or be perceived to be inequitable. 
    
6. Monitor Federal Guidance: Be alert to further action by the OCR and the courts, which may offer additional clarity or mandate institutional changes.

For more information, please contact us or your regular Parker Poe contact. You can also:

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