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University of Houston Joins $20.5 Million Revenue-Sharing Program

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News Summary

The University of Houston, alongside prominent Texas universities, has agreed to a groundbreaking $20.5 million revenue-sharing program for student-athletes. Approved by a federal court, this settlement allows universities to directly compensate athletes for their name, image, and likeness. The program will begin on July 1, 2025, with significant funding allocations primarily focused on football and men’s basketball. This decision marks a pivotal shift in college athletics, reshaping how universities support their student-athletes amidst ongoing debates about fairness and equity in sports funding.

Houston – The University of Houston, along with Rice University, the University of Texas, and Texas A&M University, will participate in a new $20.5 million revenue-sharing program for student-athletes as a result of a recent settlement approved by a federal judge. This groundbreaking decision allows colleges to pay their athletes directly for the first time, reshaping the landscape of college athletics in the wake of several antitrust lawsuits against the NCAA.

The approved settlement, known as House vs. NCAA, resolves long-standing legal disputes regarding athletes’ rights to their name, image, and likeness (NIL). As part of this settlement, a 10-year revenue-sharing model has been introduced, enabling schools to share significant NIL revenues with their student-athletes starting on July 1, 2025, for the 2025-26 athletic season.

In a historic financial commitment, Houston’s athletic director confirmed that the University of Houston will contribute the maximum share of $20.5 million in the initial year of the program. This amount represents a pivotal change for the university, which currently operates on the smallest athletic budget among schools in the Power Five conferences and relies heavily on university subsidies.

Despite the financial limitations, the University of Houston views this revenue-sharing model as a crucial avenue for enhancing support for their student-athletes. Although specific allocation details are still being determined, preliminary discussions suggest an initial distribution would allocate approximately 75% of the funds to football, 15% to men’s basketball, with the remaining funds designated for women’s basketball and other Olympic sports. A more precise projection for the University of Houston may lead to a distribution of around 68-69% for football and 23-25% for men’s basketball.

The University of Texas plans to fully fund all its 21 sports, estimating nearly $30 million in new expenses associated with the revenue-sharing program and additional scholarships for student-athletes. Meanwhile, Texas A&M is considering allocations specifically for six select sports, with an expected focus on funding 410 scholarships. With football as its primary revenue driver, Texas A&M is positioning itself to leverage this financial influx effectively.

Rice University has expressed readiness for these considerable changes in college sports as it plans for the implications of the settlement on its programs. The new rules introduced by the settlement also include roster limits that may impact walk-ons and partial scholarship athletes, adding further complexity to athletic program management.

While the larger institutions are embracing this transition toward revenue sharing, some institutions, like Houston Christian University (HCU), have chosen not to partake in the NCAA settlement. Nevertheless, HCU allows its student-athletes to pursue individual NIL deals, albeit under different constraints. As a consequence of opting out, HCU will remain liable for approximately $300,000 annually over the next decade to the NCAA, despite not being a defendant in the original antitrust cases.

Opponents of the revenue-sharing model have raised concerns, particularly regarding potential inequities and the implications for non-revenue-generating sports programs. As colleges and universities start reimagining their funding strategies, the effects of this settlement will be closely monitored as it unfolds over the next several years.

This historic shift underscores a pivotal moment in collegiate athletics, addressing the long-standing debate over student-athletes’ rights and their compensations. As universities adapt to this new era of college sports, it remains to be seen how the distribution of funds and the operational structures of athletic departments will evolve in response to this transformative landscape.