NIL agency offering advising on claims, connecting athletes to PE for upfront payments for House settlement

With the House v. NCAA long-form settlement now left to Judge Claudia Wilken in the Northern District of California, athletes are starting to understand how they will profit from backpay.

The House settlement paves a new college sports landscape, however, it provides a payday for the thousands of athletes who were not allowed to capitalize on NIL, participate in revenue sharing, or profit from video games.

The 10-year settlement agreement includes $2.776 billion in back damages. The NCAA is responsible for paying the amount over the next decade, $277 million annually. Roughly 60% will come from a reduction in distribution to institutions. The NCAA is tasked with closing the other 40%, which will come through reducing operating expenses.

In a new wrinkle, one agency is offering services to help athletes take advantage of back damages. The first back-damage payment is due May 15, 2025, or within 45 days of the settlement’s finalization, which attorneys expect to happen in the early part of 2025 (January-February). Yearly payments will be made each July 15.

Past athletes could make millions from House settlement

Power 4 scholarship football and men’s basketball athletes could stand to make millions from the settlement. Profound Sports, which primarily serves as an NIL agency, is launching a claims service. Along with offering contract review and negotiating services, Profound partnered with a private equity firm to offer upfront payments.

Athletes would be offered an upfront payment through private equity and then give the rights to collect on the 10-year payment over to the firm. The agency would take a 15% cut for attorney and advising fees. Profound later clarified that it would charge 15% for administering claims that successfully generated athletes more money.

“College athletics is evolving before our eyes and our organization is poised to be a custodian and negotiator for NIL proceeds for current and former student-athletes,” Profound’s founder Luis Davila told On3. “I have experience in class action settlement recovery for Wall Street shareholders and now we have built a similar platform for ‘athlete shareholders.'”

Davila said the agency has entered into partnership talks with multiple Power 4 schools.

“The House v. NCAA settlement distribution process will be daunting as former players will need representation to ensure they receive the fair market value payment that they deserve, Profound agent Miles Jordan said. “As an attorney who works daily in the NIL space, I believe we are uniquely qualified to help athletes negotiate these claims and guide them through the process.”

How are House settlement damages allocated?

The $1.976 billion for the NIL damages is being allocated into three categories: broadcast NIL, video game NIL and lost NIL opportunities. Dr. Daniel Rascher – a sports economics and finance, business professor at the University of San Fransisco – estimated the damages for each category. According to documents, $1.815 billion will go to broadcast NIL, $71.5 million set aside for video game NIL and $89.5 million for lost NIL opportunities.

Plus, according to documents, 95% of the additional compensation net settlement fund will be allocated to the Power Five football and men’s basketball portion with a distributed ratio of 75/15/5.

According to court documents, football and men’s basketball players will make approximately $91,000 in broadcast NIL. The range for athletes is $15,000 to $280,000. ESPN and the College Football Playoff agreed on a 12-year deal from 2014 to 2025, with the total price tag at approximately $5.64 billion, roughly $470 million annually. The College Football Playoff and ESPN agreed to a new six-year, $7.8 billion contract through the 2031-32 season in March.

Just 3,000 athletes fall into the lost opportunities category in football and men’s basketball with an average payout at roughly $17,000. But for some of the top talent that missed out on NIL, they could command $800,000.