On April 19, Oklahoma won its 7th NCAA gymnastics title. As the players celebrated, taking turns to pose with the championship trophy, it seemed like another routine moment of triumph for the largest governing body in college sports. However, the NCAA is currently engaged in ongoing legal proceedings that could have significant financial implications.

That’s because on April 7, United States District Court (Northern District of California) judge Claudia Wilken granted preliminary approval to a landmark class-action lawsuit. Arizona State swimmer Grant House and college basketball player Sedona Prince’s 2020 lawsuit aims to make the NCAA pay an eye-watering $2.8 billion in back pay to athletes. Yet, while the judgment is still pending, the apex organization has revealed some good news.

“NCAA is directing $55 million in surplus to help reduce – by 33% – the back-pay to former athletes that conferences owe as part of the House settlement (if it is approved),” journalist Ross Dellenger revealed on X. Judge Claudia Wilken is yet to give her verdict on the antitrust lawsuit. Yet, the premier college sports organization is making a preemptive move.

Assuming the House settlement goes through, reinvesting the surplus will help soften the blow. “Thanks to financial reforms at the NCAA, the national office will be able to cover a larger share of the back damages, resulting in significant savings for our schools in this first year,” said the apex college sports body’s president, Charlie Baker.

“After discussing the cost implications with many schools in DI and after productive discussions on the matter with Attorney General Jackley, we are pleased to invest these surplus funds back into DI athletic departments,” added Baker. As per USA Today, the organization recorded $1.377 billion in revenue in 2024. That’s nearly a $91 million increase from the previous fiscal year.

The NCAA secured this revenue surplus thanks to several factors, including the overall growth, revenue from broadcasting, and marketing rights. Yet, despite the NCAA agreeing to pay the $2.8 billion, another issue threatens to derail the entire lawsuit.

Another hiccup for the NCAA lawsuit

While the 2020 lawsuit against the NCAA and Power Five Conferences (ACC, Big Ten, Big 12, PAC-12, and SEC) dealt with back pay, roster limits added complexity to the proceedings. Judge Wilken has since proposed the possibility of introducing a “grandfather clause” to ensure that no athlete’s career is adversely affected.

Judge Claudia Wilken told the NCAA and the plaintiffs that she wants existing athletes to remain on rosters until their eligibility expires. This would mean that they don’t have to cut from the rosters, as has already happened with several athletes. Take Luke Kalarickal, for example. The long-distance runner found himself without a team in his sophomore year due to the roster limitations.

“Coach said we will all have a special waiver to get into the transfer portal. He cut us two weeks before school started. How are we supposed to transfer?” Luke Kalarickal told Yahoo Sports. In response, the judge gave both the defendants (NCAA and Power Five Conferences) and the plaintiffs 14 days to reach a resolution regarding the roster limit issue. Further developments will depend on the outcome of these negotiations.

It’s safe to say it would be the worst scenario for the athletes counting on that back pay. Thankfully, all hope is not lost, as the NCAA and the conferences responded after the delay. “We are closely reviewing Judge Wilken’s order… Our focus continues to be on securing approval of this significant agreement,” they wrote in an official statement. Now, only time will tell whether everyone agrees to be on the same page.

The proposed $2.8 billion settlement, if approved, could significantly reshape the financial and operational model of college sports in the United States. Beyond the immediate financial compensation to athletes, the agreement outlines sweeping changes—including the removal of 153 rules related to amateurism and potential expansions to scholarship allocations and roster sizes.

However, the settlement has not gone without scrutiny. Legal analysts and advocacy groups have raised concerns that the structure of the payout—predominantly benefiting football and men’s basketball players—could be in tension with Title IX regulations. These stipulate equal treatment for male and female athletes in federally funded educational institutions, and any perceived imbalance could invite legal challenges.