The Big Idea

The Contract Era of NCAA Athletics

The century-old bedrock of amateurism in college sports has officially crumbled. With the final approval of the landmark House v. NCAA antitrust settlement, the world of collegiate athletics is stepping into a new, professionalized era.

The agreement, formally approved by U.S. District Judge Claudia Wilken, not only sets aside nearly $2.8 billion in back damages for thousands of former and current athletes but, more critically, creates a framework for schools to directly pay their players. Starting in the 2025-26 academic year, Division I institutions can opt into a revenue-sharing model, with an initial annual cap of around $20.5 million per school. This decision shatters the longstanding NCAA prohibition on pay-for-play and ushers in an age where student-athletes will, for the first time, sign contracts with their universities for direct compensation, fundamentally changing their relationship with the institutions they represent.

This transition from scholarship agreements to formal contracts will introduce a level of complexity and professionalism previously seen only in the pro leagues. As universities become direct paymasters, they will inevitably seek to protect their nine-figure investments in athletic talent. This means the contracts offered to student-athletes are likely to evolve far beyond simple payment terms, incorporating sophisticated clauses common in professional sports and corporate employment. Athletes and their agents will soon be negotiating terms that could dictate not just their compensation, but their conduct, their future career moves, and even what they can say publicly.

Here are some of the key contractual elements that are expected to become standard in this new landscape:

• Non-Compete and Non-Solicitation Clauses: While the recent Federal Trade Commission (FTC) ban on non-compete agreements complicates their use, universities will undoubtedly explore ways to limit a player's ability to jump to a rival school, especially a conference opponent. This could manifest as steep buyout clauses or liquidated damages if a player transfers within the conference. Similarly, non-solicitation clauses could prevent a star player or a transferring coach from encouraging teammates to follow them to a new program, aiming to prevent the gutting of a roster. The enforceability of these clauses will almost certainly be tested in court, but they represent a clear attempt by schools to maintain roster stability in an era of unprecedented player movement.

• Non-Disparagement Clauses: These are already common in NIL deals and are almost certain to be included in university contracts. A non-disparagement clause would prohibit an athlete from making public statements—spoken, written, or on social media—that could be considered critical or harmful to the university, the athletic department, or its coaches. While schools will frame this as protecting their brand reputation, it raises significant free speech concerns for athletes who may wish to speak out about their experiences, coaching decisions, or institutional issues.

• Termination and Severance: The concept of being "cut" from a team will now have formal, contractual consequences. Contracts will need to clearly define the terms for termination "for cause" (e.g., criminal activity, significant violation of team rules, academic ineligibility) versus termination "without cause" (e.g., for performance reasons). A "for cause" termination would likely void any future payments, while a "without cause" termination might trigger a severance package or a guaranteed payout of the remaining contract value. This mirrors the high-stakes buyout negotiations seen with fired coaches and will become a critical point of negotiation for player contracts.

• Retention/Vesting Bonuses: To combat the transfer portal and encourage loyalty, universities will likely structure compensation to reward longevity. This can be achieved through retention bonuses paid for each year a player remains with the program or through vesting schedules for a larger contract amount. For example, a significant portion of a multi-year deal might only become guaranteed after the player completes their sophomore or junior season. This provides a powerful financial incentive for athletes to stay put, creating a "golden handcuffs" scenario that gives schools a new tool to manage their rosters long-term.

The approval of the House settlement is not an endpoint; it is the firing of the starting gun on a new, uncertain, and litigious frontier for college sports. The shift to a contractual, revenue-sharing model means that athletic departments, agents, and athletes must now navigate a world of buyouts, vesting schedules, and restrictive covenants. While this provides athletes with a long-overdue share of the revenue they help generate, it also transforms them into something more akin to employees or independent contractors. The days of the simple scholarship are over; the era of the meticulously negotiated, multi-million-dollar athlete contract has begun.

Nerding Out

The Rise and Fall (and Rise) of NFTs

The hype train came and left on NFTs, but the real value is starting to get on track

Non-Fungible Tokens (NFTs) came out hot in the post-COVID haze, personified in the launch of Dapper Lab’s NBA Top Shot collectibles, which boomed quickly before deflating in classic tulip-craze fashion. Collectible markets are still around, but NFTs and the supporting blockchain infrastructure are on the cusp of bringing less glamorous but more substantial business value.

Ticketing

It seems inevitable that using the blockchain to buy and sell tickets will eventually become an industry standard. The technology could address two of the biggest problems that teams face with traditional ticketing: counterfeits and the huge surplus that goes to resellers. FIFA recently issued a warning to fans about buying tickets for the 2026 World Cup from "unofficial ticket sites” in an attempt to ward off the debacle of the 2022 UEFA Champions League riots in Paris. Blockchain-based ticketing can eliminate much of the fraud. Blockchain-based ticketing could not only avoid problems with fans, but it could also recapture some part of the value they are currently giving away. The billion-dollar revenues of secondary providers like StubHub and Vivid Seats speak to the huge value that teams are effectively surrendering to third parties. The ability to build smart contracts into NFTs would allow teams to automatically attach certain conditions to any ticket sale. For example, a team could build a digital ticket that:

• Could only be used by the original buyer

• Could only be resold once for a price no more than 20% over the original face value.

• Could be resold unlimited times at any price, but 15% of any secondary transaction goes back to the team

The technology exists to implement smart tickets today, though widespread social acceptance is likely a few years off. But teams could start putting the structure in place and experiment with small audiences to get a head start now on what seems like an inevitable future.

Loyalty Programs

Another compelling application is enabling fan loyalty programs that can build new connections and revenues for teams across their fan base. Some of this potential is previewed in the Cleveland Cavaliers' Cavs Rewards program. Cavs Rewards lets fans earn Cavs Points for purchases at Rocket Arena, the Cavaliers Team Shop, and participating partner brands like Macy’s. Many of these redemptions occur automatically just by using a credit or debit card that a user has registered with the program. These points add up to earn “digital badges” that unlock new perks at each level. Under the hood, these purchase records and badges are stored in blockchain wallets. In the traditional world, this would require partners or card issuers to share transaction data directly with the Cavs, which gets more complicated and less secure with each new participant. The blockchain allows the data to be provided more simply and securely.  

But this is only a starting point. Proof of Attendance tokens (using POAP) can be used to verify more than financial transactions. These could reward fans for watching a game stream, sharing a team's media post, or attending a victory parade. These activities could be verified and credited without requiring teams to technically integrate with anyone but the fans via an app or QR code. This creates a bevy of new opportunities for teams and sponsors. 

These digital innovations represent powerful new tools to build and leverage the fan base in order to increase franchise values. Smart sports brands will move to at least be prepared for this coming world by crafting strategic plans for how to incorporate these tools into their current programs.

By The Numbers

Numbers That Jumped Off the Page

253- College Baseball’s current cinderella, Murray State, is just the fourth regional #4 seed to reach the Men’s College World Series. Not a big enough underdog for you? The school spent just $858,000 on its baseball program this year, placing it 253rd in the nation. All 7 other remaining teams ranked inside the top 50.

$500 Million- Hold your horses! A report broke that UCLA and Penn State had signed on for a massive $500 million private equity fund with sports marketing agency Elevate. But just as the ink was metaphorically drying, both schools came out denying they were part of the deal.

$10 Billion- With just one year until the 2026 FIFA World Cup, a new report predicts it will be the "most lucrative sports event ever staged," with FIFA's revenues expected to top an eye-watering $10 billion. The countdown clock is officially ticking for brands, cities, and fans.

Pulse Check

Last week, we asked BTS readers, “Which league currently provides the best in-person experience for spectators?” Here’s what they thought.

The Highlight Reel

Catch up on our most-read articles from previous weeks

Do you have a topic you want us to cover, a survey question you'd like us to ask, or any news you'd like to share? Let us know at [email protected].