How will House Settlement Help Clemson?

CLEMSON — On July 26, formal settlement documents were filed to advance the approval process to resolve class-action lawsuits involving the NCAA and its member conferences.

The settlement documents address three cases – House v. NCAA , Hubbard v. NCAA and Carter v. NCAA – involving back damages and future benefits for Division I student-athletes.

The settlement must be approved by the court before it becomes final, a process that is expected to take several months. If the court preliminarily approves the settlement, then current athletes will be notified of the court’s decision and will be given an opportunity to opt out of the settlement.

What does all of this mean to Clemson and other schools it competes with?

If the athletes decide to opt into the settlement, schools will be required to share revenue with athletes beginning in August of 2025. The NCAA and conferences have agreed to amend their rules to permit schools to share up to about $21.5 million in athletic revenues with their athletes for the 2025-’26 academic year, with the cap increasing over the next 10 years due to escalators and scheduled recalculations.

However, a school does not have to give the full cap. The Clemson Insider has learned Clemson will distribute the full $21.5 million in 2025-’26, as will other elite level schools.

The $21.5 million will come out of the athletic budget and each school can decide on its own how it will distribute the revenue. We can tell you Clemson plans to distribute a significant portion of the money to football.

Since this is revenue driven, there are no Title IX requirements when it comes to how the $21.5 million is distributed.

Under the new model, institutions may pay student-athletes directly for their NIL rights. Any institutional NIL payments would apply toward the cap.

Third parties may continue to enter into NIL agreements with student-athletes. Such agreements will be subject to review to ensure they are legitimate, fair market value agreements and not used for pay-for-play.

NIL payments by third parties would not apply toward the cap but must be disclosed to a clearinghouse for review.

Each school will have to decide on how they plan to allocate the money to certain student-athletes. Schools need to determine what factors such as  athletes contributions to the team, length of service, position, productivity they will use.

If Clemson uses a player’s position as a factor to determine distribution, then it will need to look at the fair-market value for certain positions like franchises do in the NFL, MLB or NBA. The importance for a position may vary for a team, such as the running back position may be valued differently at one school than at another school.

In the agreement, scholarship limits will be eliminated in all sports, and roster limits will be established. Institutions have the discretion to offer partial or full scholarships provided they do not exceed the roster limits. This change will allow institutions to provide additional scholarships to student-athletes in the future.

What do roster limits mean for Clemson?

Per the settlement, football will be capped at 105 roster spots, while baseball will have 34 and basketball 15. From what TCI has learned, Clemson plans to fully supply football with 105 scholarships and baseball with 34. The Tigers have been trying to find a way to help baseball families be debt free and now they have a solution.

Clemson will still have the option to use partial scholarships. Also, with the additional scholarships Clemson is offering to men’s sports, it will have to comply with Title IX rules, which could mean an additional 90 scholarships or so for Clemson’s athletic teams.

With the addition of these scholarships, IPTAY will need to raise more money to cover the cost of the extra scholarships.

In wrapping up, the settlement will be a big help to Clemson when it comes to competing for elite athletes. In the NIL era, there has been a financial component to each athlete’s decision process. This has caused the Tigers to miss on some of their targets.

The settlement is going to allow payments to athletes straight from the athletic budget, which will allow Clemson to be more competitive in an athlete’s financial component of their decision than it has been in the NIL era.