Until very recently, college sports in the United States were governed by a model tightly controlled by the NCAA (National Collegiate Athletic Association) and based on the principle of amateurism. Thus, college athletes were not considered employees, but rather students with athletic scholarships. The idea was that sports participation was part of the educational experience, not a professional activity. Therefore, they could not receive salaries or direct financial compensation for competing for their university.

They were only allowed to receive athletic scholarships: these covered tuition, housing, meals, and, since 2015, an additional stipend called “cost of attendance” (estimated living expenses on campus) and education-related benefits such as school supplies, tutoring, sports equipment, and team travel.

But under no circumstances could they receive cash payments for playing, nor personal income derived from their fame as athletes. Thus, they could not be paid for the use of their name, image, or likeness (NIL) in advertising, sponsorships, social media, or products. They also could not sign contracts with brands or receive cash prizes beyond what the NCAA stipulated, nor could universities offer direct financial incentives beyond the regulated scholarship.

The NCAA argued that amateurism preserved, in some way, the “purity” of college sports, maintained equality among institutions, and protected the educational nature of the experience. On the other hand, critics pointed out that while universities and the NCAA generated billions of dollars from TV rights, merchandising, and ticket sales, athletes—especially in football and men’s basketball—received nothing from these revenues directly.

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University or business: who wins in the battle over college sports in the United States

The “amateur” model and its legal challenges

In recent years, the rules have begun to be questioned, and the first legal cases have appeared, cracking the system. The first precedents in the debate over compensation and economic fairness were the court cases O’Bannon v. NCAA (2014) and NCAA v. Alston (2021).

O’Bannon v. NCAA (2014–2016): The case, led by Ed O’Bannon, challenged the fact that the NCAA profited from the images of former athletes without any compensation. Judge Claudia Wilken ruled that certain restrictions were anti-competitive and ordered that institutions be allowed to grant, for example, cost-of-attendance scholarships or up to $5,000 per year in trust funds for athletes. The Supreme Court did not intervene and refused to review the case.

NCAA v. Alston (2021): The Supreme Court unanimously upheld the decision of the Court of Appeals (9th Circuit), which found that the NCAA violated antitrust law by limiting certain education-related benefits for athletes. The decision opened the door to education-related compensation without strict limits.
State laws (California in 2019) approved that athletes could earn money through NIL, forcing the NCAA to relax its rules in 2021.

NIL and its cultural and economic impact

Thus, since 2021, following several rulings and state laws (such as California’s Fair Pay to Play Act), college athletes can receive income through NIL agreements with third parties (sponsors, brands, collectives…) without affecting their amateur status. These agreements have created new sources of million-dollar income for young athletes, although they also raise concerns about equity between revenue-generating men’s sports and other more modest disciplines.

The antitrust settlement House v. NCAA (June 2025)

In June 2025, Judge Claudia Wilken approved a historic $2.8 billion settlement, allowing universities to pay athletes directly for their name, image, and likeness, under various conditions:

·         Each Division I university may allocate up to $20.5 million annually to compensate its athletes, with the amount increasing over time.

·         Includes retroactive payments (2016–2024) and the creation of a “College Sports Commission” to oversee payments, along with a platform (managed by Deloitte) to review agreements over $600.

·         Proposes adjustments to roster management, scholarships, and transfers, with special attention to lower-revenue sports to maintain their viability.

Backlash: Trump’s executive order

On July 24, 2025, Trump signed an executive order aimed at curbing the excessive commercialization of college sports. It seeks to limit abuses in NIL and third-party payments related to “pay-for-play” (payments induced by boosters/sponsors for recruitment), while preserving the right to legitimate sponsorships, and aims to restore federal regulatory uniformity. In addition, it requires universities with high sports revenues to strengthen women’s sports and non-revenue sports in terms of scholarships and roster spots.

Tensions and future challenges

All this has sparked debate about the impact on non-revenue sports, the amateur–professional dilemma, the employment status of athletes, potential legislation (SCORE Act), and tax or legal risks.
Conflicts also need to be resolved that may favor direct institutional payments to elite, high-revenue sports over those less attractive to promoters, potentially disadvantaging disciplines such as gymnastics, swimming, or track and field. Trump’s response seeks to counter this imbalance by requiring high-revenue athletic departments to increase—or at least not reduce—scholarships for non-commercial sports.

As a result, a unified federal law - the Student Compensation and Opportunity through Rights and Endorsements (SCORE) Act)- has been proposed to standardize NIL regulations nationwide, prevent athletes from being considered employees by granting the NCAA antitrust immunity, regulate agents, health, and education, and create an “Athlete Bill of Rights.” This law was approved in congressional committees in July 2025, with a House vote pending. Other legislative alternatives include the College Athlete Economic Freedom Act, which protects NIL opportunities for international athletes without affecting their immigration status, and the College Athlete Right to Organize Act, which proposes recognizing athletes as employees, allowing them to unionize.

Conclusion

College sports in the United States are undergoing a historic transformation, shifting from a strictly amateur model controlled by the NCAA to a hybrid one in which athletes can receive direct financial compensation for their name, image, and likeness (NIL). Court rulings, state laws, and the recent antitrust settlement have broken the traditional paradigm, recognizing the economic value generated by athletes. However, this change brings deep tensions: the risk of inequality among disciplines, the impact on non-revenue sports, dilemmas regarding athletes’ employment status, and the need for unified regulation. Political responses, such as Trump’s executive order and federal legislative proposals, seek to balance the new market with the preservation of the educational character and the viability of the entire collegiate sports ecosystem. The challenge ahead will be to find a framework that combines economic fairness, equal opportunities, and sustainability for all disciplines.