NCAA finalizes payment structure for Ray settlement

The NCAA finalized the payment structure for the Ray settlement, totaling $303 million, which will be paid over a three-year period beginning this summer. 

To fund the $101 million-per-year payment across fiscal years 2026-28, $60.6 million (60%) will come from reductions to Division I revenue distributions and $40.4 million (40%) will come from the NCAA national office. The national office's contributions include a combined $10 million from Divisions II and III. 

"Leadership across the NCAA governance structure approached this decision with clear priorities - protect the Association's ability to serve student-athletes and provide members with predictability," said Jim Phillips, Ph.D., chair of the Board of Governors and ACC Commissioner. "This outcome is the product of careful review and sound governance. It addresses the settlement in a way that is financially responsible and transparent."

The overall payment structure was approved by the NCAA Board of Governors, following recommendations from the Division I Finance Committee and the Board of Governors Finance and Audit Committee and actions taken by the Division I Board of Directors, Division II Executive Board and Division III Presidents Council. The Division I Board of Directors also affirmed there will be no changes to the Division I revenue distribution formula or methodology because of the settlement. 

"I'm grateful to the Division I Board of Directors, the Board of Governors and their respective finance committees for their work on a funding plan that is clear, responsible and aligned with our governance process," NCAA President Charlie Baker said. "This plan also includes a significant contribution from the NCAA national office, with a focus on preserving key services for the membership. I also want to recognize the leadership in Divisions II and III for their commitment to the broader Association. Their contributions help us meet our obligations while protecting national office services our members count on."

The $60.6 million in annual Division I contributions will be funded by reducing the division's overall revenue distribution budget, resulting in the impact on conferences being proportionate to their annual revenue distributions. 

The Division II Executive Board and Division III Presidents Council approved contributing $10 million ($5.8 million from Division II, $4.2 million from Division III) each year for the next three years toward the settlement payment. The divisional leadership bodies did so after thoughtful, focused deliberations and in the spirit of collaboration to lessen the impact on the divisions of any potential reductions to national office services that come with the NCAA's contribution to the settlement payment.  The Division II and III contributions do not affect planned expenses (including championships) for each division, and both divisions will stay within policy for their required reserves. 

In early November, the NCAA reached an agreement to settle the Ray litigation, which concerned the former Division I volunteer coach rule. This is the second volunteer coach case settled by the NCAA, as Smart v. NCAA was settled in fall 2025 and involved Division I volunteer baseball coaches. The NCAA national office fully funded the Smart case settlement of $50 million. The Ray settlement involves Division I volunteer coaches from all other sports that had the rule.