The world of college athletics is unraveling and rebuilding all at once, and Oregon State University finds itself at the center. 

With the House v. National Collegiate Athletic Association case rewriting the rules on athlete compensation and the collapse of the Pac-12, OSU faces a pivotal moment that could redefine its athletic future.

The House case, initiated by former Arizona State University swimmer Grant House and current Texas Christian University basketball player Sedona Prince, challenges the NCAA’s current compensation structure for student-athletes.

According to a press release by the NCAA, the settlement has not yet been officially approved by the court but has been given preliminary approval.

In July, settlement documents were filed with the Northern District Court of California, addressing three cases: House v. NCAA, Hubbard v. NCAA and Carter v. NCAA.

The settlement covers three main areas: payment of back damages related to name, image and likeness; academic-related awards; and other benefits such as eliminating scholarship limits in favor of roster limits. The settlement includes $2.78 billion in back damages to be paid over 10 years to former and current student-athletes. 

Back damages compensate athletes for money they should have earned from NIL opportunities but were previously denied under NCAA rules.  

If approved, schools will be able to share up to 22% of athletic media, ticket and sponsorship revenue with student-athletes, potentially generating $1.5 to $2 billion annually in new benefits starting in the 2025-2026 academic year according to an article for Yahoo!Sports.  

Scholarship caps would be replaced by roster limits. Football, with a current scholarship restriction of 85 players, would have a roster cap of 105. Baseball would increase to a roster of 34, basketball to 15, softball to 25 and volleyball to 18. 

The settlement also raises questions about student-athletes’ employment status. In July, a federal appeals court ruled that college athletes could not be denied the consideration of status as employees under the Fair Labor Standards Act. The court indicated that athletes could be employees if they perform services primarily for another party’s benefit, under that party’s control and in return for compensation or benefits.

Professor Kirsten Hextrum, assistant professor in the School of Language, Culture, and Society and former D1 women’s rower at UC Berkeley, spoke about the implications of student-athlete employment status.

The Trump administration is unlikely to support student-athlete employment. According to Hextrum, this has already been seen in Dartmouth University men’s basketball dropping its unionization case due to Trump’s anti-union stance and expected National Labor Relations Board appointments.

However, significant immigration policy changes or anti-immigration rhetoric may lead to a decline in international students or reforms to the student visa system.

In response to the settlement, OSU athletics introduced “OSUnited” on Jan. 7 via Instagram, stating it is a “comprehensive, modernized program focused on meeting the new demands of college athletics.” 

OSUnited states that in anticipation of the final approval of the House settlement, OSU is “committed to participating at a significant level in revenue sharing with student-athletes,” including the use of NIL, academic rewards and additional scholarships.

The disbandment of the PAC-12 adds another layer of complexity to OSU’s athletic future. However, although OSU is in limbo with its current conference status, OSU was named in the original House litigation as a member of the Pac-12 as a Division I Power Five school. 

The settlement mandates that schools at these levels have the greatest liability for athlete compensation payouts, and that these schools must dedicate a portion of their athletic budgets to compensate athletes, especially those in revenue-generating sports. 

In a letter addressed to Beaver Nation on Sept. 26, 2024, prior to the settlement, OSU President Jayathi Murthy stated that OSU will need significant new revenue to maintain a competitive athletics program.  

For a school like OSU, which already faces a tight athletic budget, reallocating funds to meet settlement requirements poses a dilemma. 

According to Hextrum, very few D1 athletic programs are actually profitable. 

“To try and become profitable, these schools don’t cut spending on their possible money earners, i.e., basketball and football,” Hextrum said. “That money generally comes from several areas, either trimming costs in other areas of the athletic department, such as cutting into Olympic sports, or those that don’t earn as much money. Or, taking money from other areas of the university budget.” 

Hextrum noted that Title IX requires gender equity in athletics, including spending parity. This means that OSU cannot cut large sections of women’s teams and their budgets, so OSU will have to account for those teams in their budget as well. 

“On the revenue generation side — raising tuition or taking money from other parts of the campus, is a highly unpopular move in already budget-strapped academic contexts,” Hextrum said. 

Hextrum believes that the settlement has a smaller impact on OSU’s bowl game appearances than the obvious impacts of the conference alignment. With the fall of the Pac-12, OSU is no longer in a power conference. 

These conferences benefit from large media contracts, greater NCAA legislative autonomy and exclusive eligibility for major bowl games. If the Pac-12 officially dissolves, OSU could become ineligible for these games. 

“Athletics will have to pay these legal fees and debts, and if athletics doesn’t have this money, it falls to the President to find the funds to do so,” Hextrum said.