Colorado’s NIL Bill Prepares Schools for Revenue Sharing Era in 2025

Colorado’s House Bill 1041 proposes direct NIL payments from colleges, aiming to prepare for revenue sharing and boost recruiting competitiveness.

CU football head coach Deion Sanders, or Coach Prime, watches his team warm up before the game against CSU in the Rocky Mountain Showdown at Canvas Stadium on Saturday, Sept. 14, 2024, in Fort Collins, Colo. / Cris Tiller / USA TODAY NETWORK via Imagn Images

Lawmakers in the State of Colorado are positioning themselves at the forefront of a rapidly changing collegiate sports landscape with the introduction of House Bill 1041. This proposed legislation would allow state colleges and universities to directly compensate student-athletes for their name, image, and likeness (NIL). The bill, currently under consideration in the state legislature, builds on Colorado’s existing NIL framework while aligning with the transformative rules expected under the House v. NCAA settlement, set to launch a revenue-sharing era in college athletics as early as July 2025.

House Bill 1041 signals a bold departure from the current system, which restricts NIL payments to third-party organizations, such as booster collectives. Instead, the proposed law empowers universities to pay athletes directly from auxiliary revenue sources like ticket sales, merchandise, and media rights. By eliminating the middleman, Colorado’s lawmakers aim to streamline the NIL process while giving their schools a competitive edge in recruiting top talent—a critical factor as states across the country explore similar reforms.

“Our universities cannot pay our athletes directly,” Senate President James Coleman, a co-sponsor of the bill, explained to the Denver Post. “They get paid by businesses, and now that’s a disadvantage we have with universities around the country.”

The legislation also addresses equity issues inherent in the current NIL model, which disproportionately benefits high-profile athletes in revenue-generating sports like football and men’s basketball. Co-sponsor Sen. Judy Amabile emphasized the importance of extending these benefits to lesser-known athletes. “We’re profiting off of these young people, and they should then get to share in that profit,” Amabile said. With the ability to pay athletes directly, schools can distribute funds more broadly, ensuring a greater level of fairness across athletic programs.

The timing of HB 1041 is no coincidence. The House v. NCAA settlement, expected to be finalized in April, will allow schools to allocate up to $20.5 million annually for athlete compensation, setting the stage for significant shifts in how colleges structure their athletic budgets. Colorado lawmakers see this bill as a proactive step to prepare their institutions for compliance with the settlement while ensuring they remain competitive with states like Texas and Oklahoma, where similar legislation has already been enacted.

Rep. Lesley Smith, a co-sponsor and former Colorado Buffaloes regent, called the bill a necessary response to an evolving industry. “Basically, we’re in a new era of intercollegiate athletics,” Smith said. She hopes the measure will be in place by the fall semester, allowing Colorado schools to hit the ground running when revenue-sharing provisions begin next year.

Critically, the bill’s implications extend beyond Colorado. As one of the first states to embrace this level of NIL reform, it could serve as a blueprint for other legislatures grappling with how to modernize their approach to college sports. With the NCAA’s power increasingly diminished and revenue-sharing on the horizon, the lines between collegiate and professional sports continue to blur.