College Sports Lawsuits Continue Despite Revenue-Sharing Settlement

Legal experts say ongoing battles over athlete contracts and eligibility rules show no signs of slowing down in college sports. Universities are suing players over broken revenue-sharing agreements while athletes challenge traditional eligibility limits to extend their earning potential.

Legal battles involving college athlete compensation and eligibility requirements appear destined to continue indefinitely unless federal lawmakers establish clear regulations or the entire collegiate sports system undergoes major restructuring, according to industry experts.

Several universities including Duke and Cincinnati have taken legal action against their former quarterbacks, seeking financial compensation for what they claim are violations of revenue-sharing agreements when the players entered the transfer portal. Washington similarly threatened court action against its quarterback before the player ultimately decided to stay with the Huskies.

Meanwhile, numerous college athletes have launched their own legal challenges to extend their competitive careers and earning opportunities. This trend began with Vanderbilt’s Diego Pavia in 2024 and most recently includes Virginia quarterback Chandler Morris this week, both seeking to overturn traditional eligibility restrictions.

University of Illinois professor Michael LeRoy, who specializes in labor and sports law, noted this week how college sports officials previously celebrated the House vs. NCAA settlement as the start of a more stable period since it permitted schools to pay athletes directly.

“That,” LeRoy said, “has been a spectacular miscalculation.”

When third-party payments to college athletes for their name, image and likeness began in 2021, most observers expected these arrangements would provide students with modest spending money. Few anticipated the substantial financial opportunities now available to elite athletes in 2026 through both revenue-sharing deals and NIL contracts.

Athletes now have strong incentives to extend their college careers to maximize their earning windows, while the prospect of greater financial rewards elsewhere motivates players to abandon existing revenue-sharing agreements with their current schools.

While it might appear obvious that athletes who sign revenue-sharing contracts with penalty clauses should be held accountable for breaking those agreements, the legal reality proves more complex.

Philadelphia contract law specialist Andrew Hope, who advises educational institutions on NIL issues, explained the nuanced nature of these disputes.

“As a general matter of contract law, liquidated damages are typically enforced to the extent they are considered a good-faith effort to estimate a loss to one of the parties in case of a breach. They are not supposed to be punitive in nature,” said Hope.

Since revenue-sharing contracts compensate athletes for their NIL rights rather than athletic performance, Hope noted that players contend penalty clauses don’t genuinely represent the actual value lost by schools when they transfer. Universities naturally disagree with this interpretation.

Duke pursued legal action to prevent quarterback Darian Mensah from transferring and signing with another institution, reaching a negotiated resolution within a week. Cincinnati demanded $1 million in damages from quarterback Brandon Sorsby for abandoning the second year of his contract when he moved to Texas Tech.

Kansas City-based sports attorney Mit Winter expects most contract disagreements will conclude through negotiated settlements, as neither schools nor athletes want to endure the time and costs associated with prolonged court proceedings.

Hope observed that traditional employee contracts would include non-compete provisions requiring departing workers to pay damages.

“But you can’t have that,” he said, “because these students aren’t employees.”

Winter believes three potential developments could halt the wave of lawsuits challenging the standard four-seasons-over-five-years eligibility framework.

Federal legislation granting the NCAA antitrust protection represents one possibility. Current eligibility lawsuits claim the NCAA restricts economic opportunities by limiting how long individuals can earn money as college athletes. While the proposed SCORE Act in Congress would provide such antitrust protection, the legislation’s prospects remain uncertain.

Winter suggested the Supreme Court might uphold existing NCAA eligibility regulations. However, the high court unanimously ruled against the NCAA in 2021’s NCAA vs. Alston case. Justice Brett Kavanaugh notably wrote that NCAA rules would likely struggle against future antitrust challenges, adding that “The NCAA’s business model would be flatly illegal in almost any other industry in America.”

LeRoy argued that private equity firms’ growing involvement in college athletics further undermines the NCAA’s case for antitrust exemption.

“The eligibility disputes really come down to: Do you characterize the market for college players as people seeking a degree while concurrently playing a sport? That’s the NCAA’s view,” LeRoy said. “But courts more often than not accept the players’ characterization that it’s a market for athletic services, it’s commercial in nature. If a court uses the word ‘commercial,’ it’s over for the school and the NCAA.”

Winter identified collective bargaining as the third potential solution for eligibility disputes, though this would require recognizing athletes as employees with union representation.

Winter predicted that football and basketball players in Power Four conferences will eventually gain employee status.

“There are more and more people in college athletics who are getting behind an idea like that — some athletic directors and for sure some coaches,” he said. “The NCAA itself is still opposed to it. It’s always possible the schools break off from the NCAA and do their own thing.”

Should the Power Four conferences, or specifically the influential Big Ten and Southeastern conferences, separate from the NCAA in football and basketball, collective bargaining could resolve questions about eligibility duration, whether athletes with professional backgrounds can return to college competition, and numerous other issues that have become problematic gray areas for the NCAA.