By: Alison Silveira, Lilah Wylde, and Natalie Costero
The House settlement was expected to bring long-awaited structure to college athletics. Instead, it has marked the beginning of a new phase of litigation, regulatory disputes, and legislative activity that will shape how Universities implement revenue sharing, manage NIL programs, and interact with third-party partners.
For Universities now one year into the effectiveness of House, the challenge is no longer simply preparing for House: it is preparing for what comes next. New lawsuits are testing the limits of the settlement, Congress continues to debate federal legislation, and unresolved employment-law questions remain.
The Latest House Settlement Disputes
Two recent developments around enforcement of House should be on every university’s radar.
First, in May 2026, the College Sports Commission (“CSC”), charged with overseeing University and athlete compliance with House, rejected more than $7.5 million in NIL agreements between the University of Nebraska’s student-athletes and the University’s exclusive multimedia rights (“MMR”) partner. Following the arbitrator’s ruling the athlete’s counsel asked the court to clarify whether MMRs and third-party sponsors fall within the settlement’s definition of “Associated Entities or Individuals.” They argued that MMRs and commercial sponsors function as independent business partners rather than school-affiliated entities and therefore should not be subject to CSC oversight.
Last week, the Magistrate Judge denied Plaintiff’s motion. The Court concluded that MMRs and third-party sponsors are not categorially excluded from the definition of “Associated Entities or Individuals.” Instead, whether an entity is subject to CSC oversight depends on the nature of its relationship with the university and whether it functions in a manner consistent with the settlement’s purpose of preventing school-affiliated entities from using NIL agreements to influence recruiting or roster retention.
Why this matters: Universities that work with MMRs, sponsors, or other third-party partners should not assume those relationships fall outside the CSC’s jurisdiction. Instead, institutions should evaluate how these relationships are structured and remain prepared for increased scrutiny of arrangements that could be viewed as advancing a university’s recruiting or roster-retention efforts.
Second, a new class action—Ili et al. v. National Collegiate Athletic Association et al.—was filed in June 2026 in the U.S. District Court for the Northern District of California.
The lawsuit, brought by USC linebacker Talanoa Ili and Stanford quarterback Charlie Mirer, alleges that the NCAA, the Power Four conferences, together with the CSC, unlawfully implemented nationwide NIL restrictions in California and sixteen other states whose laws prohibit athletic associations from restricting student-athletes’ ability to earn NIL compensation.
Importantly, the plaintiffs do not challenge the House settlement itself. Instead, they argue the defendants exceeded the settlement’s authority by implementing its NIL framework in a manner that conflicts with state law. According to the complaint, the NCAA and the Power Four conferences agreed to impose nationwide restrictions on both direct revenue-sharing payments and certain third-party NIL compensation, despite knowing that those restrictions conflicted with state NIL laws. Plaintiffs content that this coordinated implementation constitutes an unlawful agreement to suppress athlete compensation—amounting to price-fixing and a group boycott in violation of the Sherman Act—as well as violations of California law.
Why this matters: While this litigation is in its early stages, it is one universities should closely monitor, particularly if they operate in states with expansive NIL statutes. If plaintiffs prevail, universities may need to revisit NIL compliance protocols, athlete agreements, and internal policies to account for state law limitations on the NCAA and CSC’s enforcement authority.
Congress Continues Its Search For a National Solution
Following Trump’s Executive Order, discussed in our recent blog, Congress has continued considering whether federal legislation can provide the uniformity that the House settlement has not yet achieved. After earlier proposals stalled, a bipartisan group of senators introduced the Protect College Sports Act of 2026, which would create national standards governing NIL compensation, revenue sharing, athlete protections, eligibility, transfers, and media rights.
For universities, the bill’s most significant feature may be its effort to replace the current landscape of varying state NIL laws with a single federal framework. The legislation would largely preserve the House settlement’s revenue-sharing and third-party NIL structure, provide limited antitrust protection for rules governing athlete compensation and eligibility, and require athletes to report NIL agreements exceeding $600. Institutions would also face new obligations involving NIL data reporting, agent oversight, scholarships, medical coverage, academic protections, and athlete health and safety. As such, many universities and conferences are publicly opposing the Act. The SEC and Big Ten released a joint statement against the Act, stating they have not had the opportunity to voice their concerns about the impact of the Act.
Operationally, the bill would require coordination well beyond the athletics compliance office. Universities may need to revise athlete agreements and NIL policies, develop new reporting and data-management systems, review agent-certification procedures, budget for expanded medical and scholarship protections, and assign responsibility for whistleblower complaints and potential private litigation. Institutions participating in any collective media-rights arrangement could also face new requirements concerning revenue distribution and the preservation of women’s and Olympic sports.
The bill is currently being prepped for floor consideration by Senate leadership, and public reports suggest that lawmakers are aiming to hold a vote before the Senate’s month-long August recess.
Why this matters: Because the bill remains subject to amendment and senate voting, schools should focus on building flexible compliance systems that can accommodate federal requirements without losing sight of continuing state-law and employment-law obligations. However, universities should not wait for final legislation before assessing their readiness for a federal framework. Institutions should identify which NIL, revenue-sharing, medical, scholarship, and reporting practices would require revision; determine which offices would own those responsibilities; and evaluate the financial and administrative resources necessary to implement them.
The Looming Issue of Employment Status
While litigation progresses and legislation is proposed, one major question remains: whether student-athletes may be classified as employees. Notably, the Protect College Sports Act does not address the issue. Unlike prior legislative proposals that would have expressly prohibited employee status, the current bill remains neutral, leaving courts, administrative agencies, and lawmakers to continue shaping the issue.
The uncertainty carries practical implications beyond athlete compensation. As universities implement revenue-sharing programs and continue facilitating NIL opportunities, institutions should keep in mind whether their compensation structures, the level of institutional involvement in athlete activities, the degree of control exercised over student-athletes could be cited in future employment-related litigation.
While revenue sharing and NIL agreements largely provide language explicitly stating student athletes are not employees, these agreements and payments alone do not determine employee status. These agreements could become part of a factual record courts evaluate when considering wage and hour, collective bargaining, workers’ compensation, and other employment-law claims.
Why it matters: Compliance with House may not resolve employment-law concerns. Universities should continue evaluating compensation models with employment counsel, documenting business rationale for compensation decisions, and reviewing existing policies to minimize wage-and-hour exposure. .
Action Items for Universities
While the legal framework governing college athletics will likely continue evolving through litigation, regulatory guidance, and potential federal legislation, universities need not wait for final answers before taking proactive steps to reduce risk. Universities can and should:
- Evaluate institutional governance: ensure clear process for making decisions regarding athlete compensation and identify which departments are responsible for reviewing, approving, and implementing compensation-related decisions.
- Review relationships with third–party partners: Assess agreements and operating practices with MMRs, corporate sponsors, and collectives to assess whether existing agreements remain appropriate as CSC guidance and litigation continue to evolve.
- Assess compliance infrastructure: Assess whether current policies, reporting procedures, and internal controls are sufficiently flexible to adapt to future regulatory changes and whether the school will be able to afford possible implications.
- Incorporate employment–law considerations into compensation planning: involve employment counsel when developing new compensation models and periodically assess whether evolving practices create additional wage-and-hour, employee-classification, or labor-law considerations.
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