NCAA: Annual salary cap of $20.5 million from 2025-2026, hope for European clubs?

A federal judge has approved a historic agreement allowing American universities to directly pay salaries to their athletes. Starting from the 2025-2026 season, an annual salary cap of $20.5 million per institution will be implemented (from June 30). This decision could limit inflation and give breathing room to European clubs, who have long been powerless against their young players departing for the United States.

An unprecedented salary cap for universities

On Friday, June 6, federal judge Claudia Wilken approved a $2.8 billion agreement between the NCAA, its five major conferences, and lawyers representing all Division I student-athletes. This settlement ends several antitrust lawsuits and marks a historic turning point in the American collegiate sports economic model.

The main takeaway: starting from the 2025-2026 season, each university can directly compensate its athletes, within an annual cap set at $20.5 million. This cap, set to gradually increase over ten years, is in addition to existing scholarships and other benefits.

Come on what is going on is totally out of control – are you serious some schools in hoops will have $20 MILLION dollars in the NIL to distribute – oh yes a farce college sports has become -please @NCAA change in the NCAA booklet welcome to the PROS for revenue sports.

— Dick Vitale (@DickieV) April 23, 2025

The end of the wild race for millions?

Until now, compensation mainly came through fan collectives using « NIL » contracts (Name, Image, Likeness) to circumvent amateur rules. The result: an uncontrolled explosion in payments, particularly in football and men’s basketball, with several young players approaching or exceeding million-dollar deals before their first game.

The implementation of this salary cap represents hope for stabilization. In the short term, it could slow down the current signing frenzy benefiting universities before the cap takes effect on June 30. Until then, offers are pouring in to secure the best talent, including young French players.

A signal for European clubs… or false hope?

Facing NCAA’s growing appeal, many French and European clubs see their best prospects leave the continent without compensation each summer. As recently explained by lawyer Simon Renault on BeBasket, this phenomenon relies on a legal loophole that prevents any compensation when players break their contracts to study and play in the United States.

The spending cap could slow this exodus by reducing financial incentives. However, there’s no indication yet that the NCAA or its universities will share this budget fairly between disciplines or profiles. European basketball might continue to suffer if most of the budget is captured by college football.

A new framework, but still many uncertainties

The agreement validated in early June doesn’t resolve all gray areas. The creation of a new regulatory body, the College Sports Commission, led by Bryan Seeley (former MLB executive), aims to better control financial flows and limit abuses. But the task is immense.

Moreover, the question of athletes’ status (employees or not) remains pending. The NCAA wants federal legislation to prevent their recognition as employees, which would open the door to unions and cost explosion.

Could this regulation inspire FIBA?

This $20.5 million cap – implemented from June 30 – might be just a first step. On the European side, the ball is in FIBA’s court, which could draw inspiration from this dynamic to finally propose a harmonized legal framework protecting training clubs.

Because as long as departures to the NCAA aren’t considered paid transfers, professional clubs will continue training talents at a loss who fly away, only to return years later to the FIBA circuit. But until June 30, NCAA programs will continue aggressively signing European prospects before having to calm down.