The landmark NCAA House Settlement is poised to redefine the financial and operational landscape of college athletics, with Historically Black Colleges and Universities (HBCUs) facing unique challenges in its wake. Jason Johnston, COO and general counsel at ROY and a legal expert in class action settlements in college sports, broke down what the deal could mean for lower-resourced institutions in an interview with HBCU Gameday.
“All the athletes in the past, HBCU athlete has been a Division I athlete going back several years… can come forward now, submit a claim and be compensated,” Johnston said, referring to the monetary damages available through the settlement. “But also, it’s doing—it’s changing the rules moving forward.”
Among the most significant shifts is the option for schools to participate in revenue sharing with athletes. “All the non-Power Four schools, all the HBCU schools, they have the option of whether or not they want to do revenue sharing with their athletes,” Johnston said. “But regardless… there’s a couple things that are impacting every Division I school—and it’s roster limits and reporting requirements.”
It’s those reporting requirements that may hit NCAA Division I HBCUs the hardest. “Under the new rule, every NIL deal over $600 involving a Division I athlete must be reported to the school or there’s going to be penalties,” Johnston said.
This presents a serious burden for compliance departments at HBCUs and other smaller programs. “Particularly, I think, related back to HBCUs… typically have maybe one person, maybe a couple people in their compliance departments… not Alabama, not Ohio State, where there might be a dozen people,” he noted. “That’s a big burden on those compliance departments.”
“The student-athlete must report… If a school doesn’t have institutional control… the enforcement action isn’t necessarily going to come down to the athlete—it’s going to come to the school,” Johnston said.
Schools that fail to meet reporting obligations could face suspensions for coaches or financial penalties—an added strain in already tight athletic budgets. “The HBCU is not going to be able to grow their compliance department. That’s unrealistic. There’s not a budget for it.”
That financial pressure, combined with new roster limitations and operational obligations, could spark broader institutional questions.
“There’s a lot of conversation happening now, even like, what does it look like to move down a division?” Johnston said. “I think what we’re probably going to see is some schools take approach right now, and over the next several years, you’re going to see different schools taking different approaches before you kind of get to sort of a common theme.”
For some HBCUs already operating on thin margins, dropping to Division II or III could emerge as a survival strategy.
“There’s no right answer right now,” Johnston said. “It’s going to be a challenge. But the alternative is a challenge as well.”
As the June 15 opt-in deadline approaches, HBCUs will face difficult decisions—not just about how to manage NIL and compliance, but whether they can continue to compete at the NCAA Division I level under the new rules of college sports.
