The new model in the United States of paying college student athletes emerged from a complex settlement in the 2025 House v. NCAA private antitrust class action. The settlement supercharged Division I schools’ incentives to fund high-revenue sports programs because they need to pay for millions of dollars in required revenue-sharing with their student athletes. The prospect of generating this revenue relies heavily on the financially lucrative spillover effects of winning championships, such as media rights, ticket sales, and donations.
Of course, winning requires fielding the best teams by recruiting top athletes that, in turn, requires significant financial resources. Evidence from the NCAA March Madness men’s basketball tournament shows that much of this change has likely been “priced-in.” This means that pumping additional resources into top programs probably won’t increase the probability of winning beyond current levels, prompting us to ask: Is the massive level of spending on college sports in the post-House v. NCAA era sustainable?
