The NCAA and plaintiff attorneys in the most significant antitrust case in college sports history have agreed to amended language in a settlement that the two parties hope will be approved by a federal judge as early as this week. If it is, the long-gestating settlement in the House v. NCAA case will set in motion $2.8 billion in back payments to players and the implementation of a revenue-sharing model in college athletics by Fall 2025. It will also provide some — but not overarching — clarity on NIL collectives.
The crux of the amendment concerns language surrounding booster involvement in name, image and likeness (NIL) deals with players. The amendment deletes the term “boosters” to focus on “narrower and more objective terminology that will limit future enforcement authority over third-party NIL deals,” according to the NCAA. The amendment was drafted by plaintiff attorneys and filed late Thursday in the Northern District of California.
“We think we’ve satisfied the concerns [the judge] raised, and more importantly, we think she will agree after looking at the settlement as a whole that this is clearly of interest to the class,” House co-lead attorney Jeffrey Kessler told CBS Sports.
The federal judge overseeing the case voiced concerns over portions of the settlement during a preliminary hearing on Sept. 6, particularly the piece allowing the NCAA to police NIL collectives and limit boosters from paying athletes through endorsement deals. In what Judge Claudia Wilken argued would amount to a salary cap, the enforcement model would have forced boosters to prove payments to athletes are for a “valid business purpose” rather than “pay-for-play.”
Big-time boosters, however, are still targeted in the amended settlement, even if they are not identified as such. The only parties exempt from arbitration by a clearinghouse are families who give less than $50,000 to the university, as well as shoe companies and apparel brands.
The NCAA’s authority will not expand beyond its current rules as a result of the amended language in the settlement, according to the organization. The belief is the amendment will be successful in “expanding opportunities for student-athletes to profit from their NIL and provide both clarity and transparency to those seeking to offer or accept NIL deals,” according to the NCAA.
The plaintiffs agreed. “One of the most important points here is that no payment by a collective that’s currently allowed by the NCAA rules will suddenly not be allowed,” Kessler said. “The rules have been there and they will be allowed to continue. The rest of it are perceivements for how they can be enforced with neutral arbitration.”
The lingering question, however, is how universities and boosters will adjust gift-giving should the settlement be approved. Many boosters who participate in NIL collectives also give more than $50,000 to the school and/or athletic department — meaning any NIL deals they provide players in the future will be subject to arbitration by a new third-party clearinghouse outside the NCAA’s purview.
Still, Kessler believes there’s a loophole by simply choosing a lane to funnel a booster’s money.
“Even if a collective were to conclude that it couldn’t make a certain type of payment that the NCAA was going to enforce the rule against them, the collective can give that money to the school, and the school can give the payment,” he said.
The NCAA and plaintiff attorneys worked side by side to craft the amendment. The judge has not yet approved the settlement, which she can sign without scheduling a hearing. The judge also had issues with the lack of a plaintiff in the case to represent players on partial scholarship, which has since been rectified with an additional party added as a representative with House, Kessler said.
The amendment also outlines a new, simplified distribution process for the $2.8 billion to former players.
The $2.8 billion settlement in the House v. NCAA case, a landmark legal battle, has far-reaching implications anchored by revenue-sharing and the expansion of roster sizes, which might also spark more legal battles with Title IX implications. In the immediate future, the legal settlement is transformative for players. Not only will past athletes be compensated for prior restrictions on earning from their NIL via the $2.8 billion settlement, but the agreement sets the stage for a future revenue-sharing model, a first in the NCAA’s long history, benefiting thousands of collegiate athletes starting as soon as Fall 2025. Schools in the four power conferences will be permitted to share 22% of revenue to players, amounting to as much as $23 million annually, over the next 10 years.
Several groups have formally objected to the agreement since July, and others have objected in public statements, offering that the settlement illegally restricts future players who are not yet members of the lawsuit. Wilken echoed those concerns to attorneys in the preliminary hearing earlier this month, asking how a settlement will affect a “six-year-old playing kickball on asphalt” when they become an NCAA athlete. Attorney Garrett Broshuis, who represents players objecting to the settlement, argued it attempts to mirror a labor agreement without a players’ union. The NCAA, of course, does not recognize players as employees.
The NCAA and House plaintiffs believe the amended filing is supported by law and the settlement allows future players to voice concerns in court at a later date should they object to the terms of the settlement.
NIL collectives are fueled by millions of dollars from boosters, who distribute money to players in salary-like agreements that are loosely tied to commercial or endorsement contracts. Most schools distribute millions through NIL collectives, with Ohio State leading the way with more than $20 million in payments. The settlement in the House case could limit or eliminate such deals, particularly among big boosters who give more than $50,000 to the school. Wilken seemed shocked during the hearing earlier this month when alerted by NCAA attorneys that regulations on “pay-for-play” will not be eliminated in the current deal.
The NCAA has remained mostly toothless in enforcing its current NIL regulations. A federal judge in Tennessee granted an injunction in February prohibiting the NCAA from enforcing its NIL rules against athletics departments, players, boosters and collectives. Attorneys general in Tennessee and Virginia believe the NCAA is illegally restricting NIL opportunities for players. The NCAA instructed membership in a letter after the injunction in Tennesseee that it had paused investigations into third-party participation in NIL across the country.
In the House case, regaining enforcement and regulation powers around NIL is paramount to the NCAA, though that too could be challenged further in court, just as it has in Tennessee and Virginia.
“We’re living in a fairy tale, a fairy tale where we tell ourselves and pretend that what we’re doing with NIL to pay athletes is not pay-for-play,” said Jim Cavale, founder and chairman of Athletes.org, a player-advocacy group. “It’s NIL, but it is pay-for-play. What we’re going to do with revenue-sharing between the schools and the athletes is pay-for-play, and when you try to call it something else, it creates all of these problems.”
