OAKLAND, Calif. — A multibillion-dollar legal settlement with the potential to reshape the business of college sports inched closer to its fast-approaching finish line during a federal court hearing Monday.
Judge Claudia Wilken declined to provide final approval of a deal between the NCAA and plaintiff attorneys representing past, present and future Division I athletes, but she directed lawyers to address a short list of her remaining concerns within one week.
“I think it’s a good settlement,” Wilken said while wrapping up the seven-hour hearing, before quickly adding, “Don’t quote me.”
The NCAA has agreed to pay roughly $2.8 billion in damages to past and current athletes to settle three federal antitrust lawsuits that claim the association’s rules have limited the athletes’ earning potential in various ways. The deal, commonly referred to as the House settlement after lead plaintiff Grant House, also would create a new system for schools to pay players directly, starting this summer.
In exchange, the NCAA will be allowed to limit how much each school can spend on its athletes per year — an effective salary cap that is expected to start at roughly $20.5 million per school and increase annually during the 10-year lifespan of the deal. The deal also gives the industry’s most powerful conferences an increased ability to police the name, image and likeness deals between athletes and boosters, which is intended to keep teams from using their boosters to circumvent the $20.5 million cap.
Wilken, who has ruled on several cases that have reshaped the NCAA’s rules in the past decade, specifically asked lawyers from both sides to rethink one provision that would place a limit on how many athletes could be on a school’s roster for each sport and to provide more details on how future athletes could object to the terms of the deals once they enroll in college.
Several objectors who spoke Monday asked Wilken to reject the settlement because it could lead to the elimination of thousands of roster spots on Division I teams across the country. The NCAA’s current rules place limits on the number of scholarships that each team can give to its players. That rule will go away if the settlement is approved, meaning a school can provide a full scholarship to every one of its athletes if it chooses to do so.
To keep the wealthiest schools from stockpiling talent, the NCAA has proposed to instead limit the number of players each team can keep on its roster. Many teams will have to cut current athletes from their rosters to comply with the new rule if the settlement is approved. Gannon Flynn, a freshman swimmer at the University of Utah who spoke at the hearing, said his coaches told him that he will not have a spot on the team next season specifically because of the settlement.
“We’re not here for money. We just want to play and compete,” Flynn told the judge. “On paper, this settlement might look good … but thousands of people are losing their spots.”
Wilken suggested Monday that any current athlete should get to keep their spot even if it puts a team over the new roster limit.
“My idea there is to grandfather in a group of rostered people. There are not that many. It’s not that expensive. It would generate a lot of goodwill,” Wilken said.
Judges are not allowed to mandate specific changes to a settlement, but Wilken can make suggestions for how the attorneys could resolve problems that might otherwise keep her from blessing the deal.
“We are standing by our settlement. We think it’s fair. If the NCAA wants to grandfather it in, that’s up to them,” said Steve Berman, one of two co-lead attorneys for the plaintiffs.
Attorney Rakesh Kilaru, lead counsel for the NCAA, said he needed to speak to his clients about any potential change to the roster limit terms, but he remained optimistic the settlement would be approved.
Other objectors on Monday raised concerns that the $2.8 billion in damages were being divvied up in a way that is unfair to women athletes. Men, especially football and basketball players, are expected to receive at least 90% of the damages payments.
Others argued that the settlement creates a new antitrust violation by capping how much each school can spend on athletes. Professional sports leagues set legal salary caps by negotiating those limits in a collective bargaining agreement with a players’ union. Wilken said that while a collective bargaining agreement “might be a great idea,” the case in front of her did not give her the authority to rule on whether athletes should be able to negotiate in that fashion.
Berman said he is hopeful that it will take only a few more weeks for Wilken to grant final approval to the deal. Schools are planning to begin paying their players directly in July. Fellow plaintiffs’ attorney Jeffrey Kessler said he is confident Wilken will make her ruling in plenty of time to keep the plans to pay athletes this year on track.
