What direct compensation under landmark House settlement means for Alabama

Alabama football and collegiate sports programs across the country will now be allowed to legally pay athletes directly for the first time ever under a landmark house settlement.

Judge Claudia Wilkins granted approval to a House settlement, which were three antitrust cases. The approval is expected to have a profound impact on college athletics with it opening doors for college athletes to get paid directly and for former athletes to receive compensation for ‘past harms.’

So, What does this settlement mean for Alabama football and its current players?

NIL agreements must be approved by “NIL G0”

“NIL Go,” a NIL clearinghouse, will now be responsible for determining the legitimacy and approving name, image and likeness agreements between college athletes and third parties. Those third parties include businesses, brands, boosters and collectives. All NIL deals over $600 must be approved by the clearinghouse. Deloitte, which provides audit and assurance, consulting, financial advisory, risk advisory, tax and related services, will engage in a three-step process, including payor association verification, valid business purpose verification and a range of compensation analyses to determine the legitimacy of deals.

Roster Limits

Scholarship limits will be replaced with roster limits. The NCAA President Charlies Baker wrote this is ‘a change that will enable schools to vastly increase the scholarship opportunities student-athletes receive and potentially double the number of athletics scholarships made available to women’ in a letter released on Friday.

The SEC has adopted an 85-player scholarship limit for football on its own. The proposed roster limit under the new settlement for football is 105 players. This limit could cut down roster sizes across college football as programs across the country have had more than 120 players on their rosters in past seasons. The SEC’s current scholarship limit gives Alabama a chance to continue to keep at least 20 walk-on players on their roster.

An annual 22.5% cap on funds to pay athletes

The University of Alabama will have a cap on the amount of funds it can directly pay college athletes.

“Going forward, the defendant conferences will be responsible for implementing several elements of the settlement, including the design and enforcement of the annual 22.5% cap (approximately $20.5 million in year one) for financial benefits a Division I school may direct to student-athletes,” NCAA President Charlie Baker wrote in a letter after the approval of the House settlement.

Football programs across the country are expected to receive a large amount of the capped funds.