INDIANAPOLIS — In a landmark move that reshapes the future of college sports, the NCAA has approved a sweeping plan to allow universities to share revenue directly with student-athletes. The decision, announced Friday, comes after years of legal challenges, mounting political pressure, and widespread calls for reform.
The policy, which takes effect in 2026, marks the first time in the NCAA’s 118-year history that athletes will receive direct compensation from their schools beyond scholarships and stipends. Under the new rules, Division I programs will be permitted to share up to $20 million annually in revenues with players, distributed across all sports.
“This is a historic step forward for college athletics,” NCAA President Charlie Baker said in a statement. “Our student-athletes deserve to share in the success they help generate, and this policy creates a fairer, more sustainable model.”
A Long Road to Reform
The approval follows years of escalating tension over how athletes are compensated. College sports generate billions of dollars annually, largely from football and men’s basketball, while athletes historically received no share of that revenue.
The debate intensified after the Supreme Court’s Alston v. NCAA ruling in 2021, which chipped away at the association’s ability to restrict education-related benefits. Soon after, the NCAA adopted new Name, Image, and Likeness (NIL) rules, allowing players to earn money through endorsements and sponsorships.
While NIL opened new opportunities, critics argued it left vast inequities in place and created a chaotic, unregulated marketplace. Calls for direct revenue sharing grew louder as lawsuits piled up and lawmakers threatened intervention.
Friday’s decision represents the NCAA’s most dramatic concession yet.
How Revenue Sharing Will Work
Under the new plan, schools in the Football Bowl Subdivision (FBS) and other top Division I programs will be able to set aside revenue from television contracts, ticket sales, and sponsorship deals to pay athletes.
The NCAA has capped payments at $20 million per school per year, though universities can determine how to allocate the funds. Officials emphasized that distributions must comply with Title IX, ensuring gender equity across men’s and women’s sports.
“This isn’t just about football and basketball,” said Baker. “This is about all athletes — from track and field to swimming to soccer — benefiting from the value they bring to their institutions.”
Reactions Across the Sports World
The announcement drew swift and varied reactions from athletes, coaches, and administrators.
“It’s about time,” said Jayden Daniels, a senior quarterback at LSU. “We put our bodies on the line every Saturday. Seeing the money actually come back to players means a lot.”
Some university leaders expressed concern about the financial strain, especially for smaller athletic departments. The $20 million cap may be manageable for powerhouse programs like Alabama or Ohio State, but mid-tier schools could struggle to compete.
Critics also warned of unintended consequences, such as schools cutting smaller sports to afford revenue sharing. The NCAA said it will monitor implementation closely to minimize disruptions.
Meanwhile, professional athletes and labor advocates praised the move as a long-overdue correction. “This is a victory for fairness,” said former NBA star and activist Kareem Abdul-Jabbar. “Athletes should not be exploited by billion-dollar institutions.”
Legal and Political Pressures
The NCAA’s decision comes amid a shifting legal landscape. Several class-action lawsuits are pending against the association, seeking back pay for athletes who competed before NIL rules were adopted. Allowing revenue sharing could strengthen the NCAA’s defense by demonstrating proactive reform.
Congress has also been weighing federal legislation to regulate college athletics, with lawmakers divided over issues such as antitrust protections and collective bargaining. Friday’s announcement could influence those debates, though some experts predict more regulation is inevitable.
What Comes Next
The NCAA plans to finalize implementation guidelines over the next year, with schools required to report compliance annually. The first payments are expected during the 2026–27 academic year.
Economists say the shift will fundamentally alter the business of college sports. Programs that once relied heavily on unpaid labor will now face costs more akin to professional franchises.
“This changes everything,” said Andrew Zimbalist, a sports economist at Smith College. “College sports will start to look much more like the pro model, with contracts, negotiations, and financial planning becoming central.”
For athletes like Daniels, however, the change is simple: recognition and reward for their contributions.
“College sports are never going to be the same after this,” Daniels said. “And that’s a good thing.”
By Friday evening, the announcement was being hailed as one of the most consequential developments in NCAA history — a turning point in the ongoing evolution of college athletics.