The proposed House v. NCAA settlement marks one of the most significant shifts in the business of college athletics. Beyond revenue sharing and institutional payments, the settlement has sparked a new and rapidly emerging market in which third parties offer to purchase athletes’ settlement claims in exchange for upfront cash.
While these offers may appear attractive, particularly to athletes who competed before NIL opportunities expanded, they carry serious legal and financial considerations.
What Is the House Settlement?
The House settlement resolves antitrust claims brought by current and former college athletes challenging the NCAA’s restrictions on athlete compensation. Under the settlement, schools are allowed to share revenue directly with athletes, and the NCAA is required to pay nearly $2.8 billion back damages over the next ten years to athletes who competed in college at any time from 2016 to the present.
Selling House Settlement Claims: How It Works
In response to the settlement, third-party entities have begun approaching athletes with offers to “buy” their settlement claims. Typically, these arrangements involve a lump-sum payment (often at a steep discount to the potential settlement value) to the athlete in exchange for assigning the athlete’s settlement claims to the third party.
Legal and Financial Risks for Athletes
Athletes considering these offers should proceed with caution. Key concerns include:
- Loss of future value: Athletes may give up a substantially larger settlement payout for immediate but reduced compensation.
- Loss of settlement claim: Once a claim is assigned or sold, the athlete no longer controls it and generally cannot later seek additional compensation if the settlement amount exceeds expectations.
- Tax consequences: Tax liability may be based on the original value of the claim, not the discounted “fast cash” amount received upfront.
- Disclosure and consent issues: Many offers are presented without full explanation of rights being waived or long-term consequences.
In short, what may appear to be a simple financial transaction can permanently eliminate an athlete’s rights while creating unexpected tax burdens and legal risk.
Why Legal Review Matters
The House settlement represents a once-in-a-generation change in college sports. Decisions made now, especially irreversible ones like selling a settlement claim, can have lasting financial and legal consequences.
Before signing any agreement related to settlement claims, athletes should understand:
- What rights they are giving up
- Whether the agreement is enforceable
- How it affects taxes and future earnings
Final Takeaway
The emergence of a market for athlete settlement claims underscores how rapidly college athletics is changing and how complex these opportunities have become. What looks like easy money today may come at a significant cost tomorrow.
If you are an athlete considering selling your settlement claim or have questions about how the House settlement affects you, The Harris Law Firm can assist you in evaluating your options and understanding the legal and financial implications of your decision, contact us today.
About the Author
Machia Mullens is a third-year law student at the University of Colorado Law School with a focus on sports law and athlete advocacy. Drawing on her experience as a former Division I student-athlete, she has worked on NIL, revenue sharing, and compliance matters through law firms, CU Athletics, and the CU Law's NIL Practicum. She currently serves as a law clerk at The Harris Law Firm and will join the firm full-time as a sports attorney after graduation.
