College athlete compensation has transformed in just a few years. In 2021, changes to NCAA rules allowed student-athletes to earn money from the use of their name, image, and likeness (NIL) through opportunities such as endorsements and other third-party partnerships.¹ Now, revenue sharing is reshaping the landscape again by allowing schools to compensate athletes directly.
That latest shift stems from the House v. NCAA settlement, a landmark antitrust case involving athlete compensation that was approved in 2025.² Under the settlement, participating colleges and universities can share revenue directly with student-athletes.³ But that opportunity also comes with new administrative responsibilities. Athletic departments must determine how funds are allocated while managing agreements, payment schedules, and records across their rosters.
So, what does college athletics revenue sharing look like in practice? This guide breaks down where the money comes from, how athletes get paid, and what schools need to consider as they manage the process.
Key takeaways
- College athletics revenue sharing allows participating schools to compensate student-athletes directly, creating a separate source of compensation from third-party NIL deals.
- Schools determine how available revenue-sharing funds are allocated among eligible athletes and distribute payments based on individual agreements and payment schedules.
- Managing revenue-sharing payments involves coordinating athlete agreements, payment and tax information, disbursements, and transaction records.
- Technology can help schools centralize athlete onboarding, automate payment scheduling, and maintain greater visibility into revenue-sharing activity.
What is college athletics revenue sharing?
College athletics revenue sharing is a compensation model that allows participating colleges and universities to distribute a portion of athletics revenue directly to student-athletes.
Introduced in 2025 following the House settlement, revenue sharing gives athletes a way to receive compensation directly from their schools in addition to earning income through NIL opportunities. Schools operate within an annual revenue-sharing limit but have discretion over how they allocate those funds among eligible athletes.
How the House settlement changed athlete compensation
The House settlement resolved three class-action antitrust lawsuits challenging NCAA rules that restricted the compensation and benefits student-athletes could receive. Among the claims, athletes argued that those rules prevented them from earning compensation tied to their name, image, and likeness, including revenue associated with broadcasts and video games.
The settlement introduced a 10-year framework that allows participating schools to provide direct financial benefits to student-athletes. It also established approximately $2.8 billion in back damages for eligible Division I athletes who competed between 2016 and 2024, compensating them for certain earnings they could not receive under previous NCAA rules.
Under this new framework, colleges and universities are taking on greater responsibility for both determining compensation and administering it. Athletic departments must manage athlete agreements, coordinate and track payments, and maintain accurate records across their rosters. All of this adds a new layer of financial and administrative complexity to their day-to-day operations.
Where college athletics revenue-sharing funds come from
Schools fund revenue-sharing payments using revenue generated by their athletic programs. That revenue can come from several sources, including:
- Media rights
- Ticket sales
- Sponsorships
- Department funds (concessions, merchandise sales, etc.)
Which schools and student-atheletes can participate
Revenue sharing applies to Division I schools that opt into the House settlement’s revenue-sharing framework. Schools in the ACC, Big Ten, Big 12, Pac-12, and SEC are required to participate, while other Division I institutions can choose whether to opt in.
For student-athletes, participation depends on factors such as enrollment, roster status, and the terms established by their institution.
Schools must account for these requirements as athletes join teams, transfer, graduate, or otherwise experience changes in eligibility.
Revenue sharing vs. NIL: What is the difference?
Revenue sharing and NIL both allow student-athletes to earn income, but they differ in where that compensation comes from and how it’s structured. Here’s a closer look at the key differences.
Direct payments from colleges and universities
Under revenue sharing, compensation comes directly from a participating college or university. The school establishes an agreement with the athlete that outlines the amount they will receive, when payments will be made, and other applicable terms.
These payments are managed by the institution rather than an outside sponsor or collective, bringing athlete compensation directly into the school’s financial operations.
Third-party NIL deals from brands and collectives
NIL deals operate separately from school revenue sharing. Athletes can enter into agreements with sponsors, NIL collectives, and other third parties in exchange for the commercial use of their name, image, and likeness.
Unlike revenue-sharing payments issued directly by a college or university, NIL compensation is tied to activities such as brand endorsements, sponsored social media content, appearances, or licensing agreements.
Can athletes receive both revenue-sharing and NIL payments?
Student-athletes can receive revenue-sharing payments from their school while also earning compensation through third-party NIL opportunities.
Because these payments come from separate agreements and sources, athletes may receive both forms of compensation at the same time, provided they meet applicable requirements.
How do college athletes actually get paid under revenue sharing?
Once a school determines how it will structure its revenue-sharing program, it needs a process for issuing payments and maintaining compliance records.
From establishing individual agreements to distributing and reconciling funds, several steps connect an athlete’s compensation terms to the money they ultimately receive.
The school determines its athlete payment allocations
The process begins with the school determining how much of its available revenue-sharing pool will go to individual athletes. Schools have discretion over how those funds are divided, so payment amounts can vary across athletes, teams, and sports.
Those individual allocations then become the basis for each athlete’s revenue-sharing agreement, which documents how much the athlete will receive and how those payments will be distributed.
The athlete receives and signs and agreement
Before payments begin, the athlete receives an agreement outlining the terms of their compensation. This establishes details such as the payment amount and schedule, along with applicable eligibility requirements and other conditions.
Having those terms documented gives both the institution and athlete a record to reference throughout the agreement period.
Payment and tax information is collected
The school then needs the information required to issue and report payments. This can include an athlete’s payment details and relevant tax information.
Centralizing this information during onboarding can help reduce administrative work later, particularly for schools managing payments across large rosters.
Funds are distributed according to the payment schedule
Once the agreement and payment information are in place, funds can be distributed according to the schedule established in the athlete’s agreement.
Depending on those terms, compensation may be delivered as a lump sum or through installments over a defined period.
Each transaction is recorded and reconciled
After payments are issued, schools need to confirm that each transaction matches the athlete’s agreement, scheduled payment amount, and payment status.
Finance teams must then identify failed or outstanding payments, resolve discrepancies, and maintain an accurate record of what each athlete has received. This creates a clear audit trail for financial reporting and helps schools track revenue-sharing activity across their rosters.
How much can college athletes receive from revenue sharing?
Revenue-sharing compensation can look different across college athletics, with payment amounts varying by school, sport, and athlete. Several factors shape how much an individual student-athlete may ultimately receive.
Annual revenue-sharing limits for participating schools
Each year, participating schools can distribute up to 22% of the average athletic revenue generated by schools in the Power Five conferences, with the resulting figure setting the annual revenue-sharing cap.
For the 2026–27 academic year, that cap is approximately $21.6 million per school, giving institutions a defined pool of funds they can use for direct athlete compensation.
How schools divide payments among athletes and sports
Within the annual limit, schools have flexibility in deciding how to distribute revenue-sharing funds across their athletic programs. That means institutions can allocate different amounts to individual athletes, teams, and sports rather than dividing the available pool evenly.
Each school’s allocation decisions ultimately determine the compensation offered to individual athletes through their revenue-sharing agreements.
Why individual payment amounts can vary
Revenue-sharing agreements are negotiated at the individual athlete level, so compensation is not standardized across an institution’s roster. Payment amounts may reflect factors such as the athlete’s sport and role.
As a result, teammates or athletes competing in different sports at the same school may receive different revenue-sharing offers.
How revenue-sharing limits may change over time
The revenue-sharing cap is expected to continue rising throughout the House settlement’s 10-year term. Following the 2026–27 limit, the cap is projected to increase another 4% for the 2027–28 academic year.
After that, the cap will be re-evaluated every three years throughout the remainder of the 10-year settlement period, allowing future limits to account for changes in college athletics revenue.
What do athlete revenue-sharing agreements include?
Revenue-sharing agreements establish the terms that govern an athlete’s direct compensation from their school.
While the specifics can differ, these agreements generally address how and when athletes are paid, the conditions they must meet, and what happens if their status changes.
Compensation amount and payment schedule
The agreement specifies the total compensation an athlete is eligible to receive and how those funds will be paid. It may outline whether compensation will be delivered at once or across multiple installments, along with the dates or intervals when payments are scheduled.
HAgreement duration and renewal terms
Revenue-sharing agreements also establish how long the arrangement remains in effect. Depending on the terms, an agreement may cover a defined period and include provisions outlining whether or how it can be renewed.
Clearly documenting these dates helps both the school and athlete understand when the agreement begins, when it ends, and when new terms may need to be established.
Athlete eligibility and enrollment requirements
An athlete’s ability to receive payments may depend on maintaining certain eligibility or enrollment requirements. Agreements can document these conditions so athletes understand what is required for compensation to continue.
Changes to an athlete’s status may therefore affect future payments under the terms of the agreement.
NIL rights and institutional obligations
Revenue-sharing agreements can also address how an athlete’s NIL rights relate to their arrangement with the school, including any rights or obligations established as part of the agreement.
This helps distinguish the terms of the institutional agreement from separate NIL opportunities an athlete may pursue with third parties.
Transfer, termination, and repayment provisions
Revenue-sharing agreements may outline how the school can use an athlete’s name, image, or likeness in connection with institutional activities. They can also define any related responsibilities the school and athlete agree to as part of the arrangement.
These terms are separate from third-party NIL agreements the athlete may enter into with sponsors, collectives, or other organizations.
How and when are revenue-sharing payments distributed?
Once an athlete’s agreement is finalized, the school distributes compensation according to the terms established in that agreement. The timing and method can vary depending on how the payments are structured.
Lump-sum vs. installment payments
Revenue-sharing compensation may be issued as a single lump-sum payment or divided into installments. An installment structure spreads compensation across multiple scheduled payments, while a lump sum delivers the agreed-upon amount at one time.
The athlete’s agreement establishes which approach applies and when each payment is due.
Direct depository and digital payment methods
Schools need a way to securely transfer funds to athletes when payments are due. Direct deposit and digital payment methods can provide an electronic alternative to issuing and managing paper checks.
Using digital methods can also make it easier for schools to track when payments are initiated and completed.
Payment timing during the academic year
Payment schedules may be structured around specific dates or intervals during the agreement period. For example, an athlete receiving installments could have payments scheduled monthly or at other predetermined points throughout the academic year.
Documenting those dates in the agreement gives athletes visibility into when to expect compensation and helps schools plan upcoming disbursements.
What happens to payments when an athlete transfers or leaves
A school transfer, withdrawal, or other change in an athlete’s status can affect payments that have not yet been distributed. What happens next depends on the terms of the athlete’s revenue-sharing agreement, including any provisions governing termination and remaining compensation.
Schools therefore need to account for status changes quickly so future payments reflect the athlete’s current eligibility status.
Are college athletics revenue-sharing payments taxable?
Revenue-sharing payments can create tax obligations for student-athletes and reporting responsibilities for schools. How those payments are classified affects the forms athletes receive, whether taxes are withheld, and how compensation is reported.
W-2 vs. 1099 tax treatment
Most revenue-sharing and NIL payments are expected to be treated as self-employment income rather than traditional wages. That means athletes will typically receive a 1099 rather than a W-2 and report the income on their federal tax returns.
As self-employment income, these payments may also be subject to self-employment tax in addition to applicable federal and state income taxes.
Tax withholding and reporting responsibilities
Unlike traditional wages, revenue-sharing payments typically do not have taxes withheld before they reach the athlete. Student-athletes are therefore responsible for tracking their taxable income and setting aside funds to cover their tax obligations.
Depending on how much they earn, athletes may also need to make quarterly estimated tax payments rather than waiting until they file their annual return.
Why athletes need accurate payment records
Keeping detailed records of payment amounts, dates, and tax documents can help athletes understand their total taxable income and prepare for filing requirements. Organized records can also make it easier to calculate estimated tax payments and address discrepancies if they arise.
For schools, detailed payment records help ensure athletes receive the documentation they need for tax reporting.
What challenges do schools face when managing athlete revenue sharing?
The logistics behind revenue sharing can be just as important as determining athlete compensation. As schools put these programs into practice, several challenges can emerge.
Onboarding and paying large numbers of athletes
Revenue-sharing programs can involve payments to athletes across multiple teams and sports. Before payments begin, schools need to collect banking and tax information, verify required details, and connect each athlete to the correct agreement and payment schedule.
Handling these steps individually can create significant administrative work, particularly when new athletes need to be added or information changes.
Connecting agreements to scheduled payments
Each athlete’s agreement establishes specific compensation terms that need to translate into actual disbursements. Schools need to ensure payment amounts and dates align with those terms throughout the agreement period.
Without a clear connection between contracts and payment systems, changes to an agreement may require manual updates and increase the risk of missed, late, or incorrect payments.
Handling roster, eligibility, and transfer changes
Athlete rosters can change throughout the year as students enroll, graduate, transfer, or experience changes in eligibility. When those changes affect an athlete’s agreement, schools may need to modify or stop upcoming payments.
Reconciling transactions and maintaining audit trails
As payment volume grows, schools may have to reconcile transactions across numerous athletes, agreements, and payment schedules.
Failed payments, adjustments, or discrepancies between scheduled and completed transactions can make it harder to maintain an accurate record of payment activity.
Protecting athlete banking and financial information
Revenue-sharing programs require schools to handle sensitive athlete information, including bank account and tax details.
Collecting and managing that data across large rosters can increase security and privacy risks, particularly when information moves between different teams or systems throughout the payment process.
How technology streamlines college athlete revenue-sharing payments
As revenue-sharing programs become part of athletic departments’ day-to-day operations, technology can make the administrative side easier to manage.
The right tools can bring payment processes together while giving schools greater visibility into activity across their programs.
Centralized athlete onboarding and account management
A centralized system gives schools one place to collect and manage the information needed to pay athletes. Rather than handling banking details, tax information, and account updates across separate processes, administrators can maintain athlete payment profiles that stay connected to their revenue-sharing activity.
This can also simplify onboarding as new athletes enter the program or existing athletes need to update their information.
Automated payment scheduling disbursement
Automation can turn the payment terms established in an athlete’s agreement into scheduled disbursements. Once payment amounts and dates are established, schools can schedule payments in advance rather than initiating each transaction manually.
Automating this process can reduce administrative work while helping schools deliver payments according to the agreed-upon schedule.
Contract management with escrow capabilities
Contract management tools can help schools keep athlete agreements and the payments associated with them connected in one place. Escrow capabilities can add another layer of control by allowing funds to be held until the conditions established for their release are met.
This gives administrators a clearer connection between contractual obligations and when funds become available to an athlete.
Real-time payment visibility and financial reporting
Centralized payment data gives athletic and finance teams greater visibility into the status of revenue-sharing activity. Administrators can see which payments have been completed, which are upcoming, and which may require attention without piecing together information from separate records.
That visibility can also make reconciliation and financial reporting easier by maintaining a clearer record of transactions across the program.
Connected banking tools for student athletes
Connected banking tools can give athletes a more streamlined way to receive and manage their revenue-sharing funds. Instead of the experience ending once a payment is issued, athletes can have greater visibility into incoming payments and their available funds through connected financial tools.
For schools, bringing the payment and athlete experience closer together can create a more consistent process from onboarding through disbursement.
Simplify college athletics revenue sharing with Priority Commerce
Priority Commerce helps schools simplify athlete payment operations with technology that supports automated disbursements, greater payment visibility, and connected financial tools. This gives athletic departments a more efficient way to manage revenue-sharing payments as their programs evolve.
Learn how Priority Commerce’s SportPass can help your institution simplify athlete payments and manage college athletics revenue sharing at scale.
Sources:
- NCAA adopts interim name, image and likeness policy, NCAA, June 30, 2021.
- In re: College Athlete NIL Litigation (House) court documents, College Athlete Compensation Settlement.
- U.S. judge approves settlement allowing NCAA schools to pay athletes, Reuters, June 7, 2025.
