A Pivotal Legal Moment in College Sports

The recent House v. NCAA case stands out as a landmark event in the realm of college athletics, echoing significant past labor disputes in professional sports leagues like the NFL and MLB, where player unions played a crucial role in advocating for their rights. Unlike these entities, the settlement from the House case has sparked concerns that it could further divide the college sports landscape.

Key Perspectives on the Settlement

Ramogi Huma, a prominent players’ rights advocate, challenged the viability of the settlement, stating, “This settlement is unworkable. The schools are beginning to find that out.” This sentiment contrasts sharply with the NCAA’s perspective, which anticipates a decrease in ongoing litigation that has previously overwhelmed the organization’s governance.

The Structure of the House Settlement

Under the oversight of Judge Claudia Wilken, Deloitte, a global auditing firm, and the commissioners from the Power Four conferences, the settlement aims to regulate college athlete compensation, including a cap of $20.5 million annually for revenue sharing. However, select states like Colorado and Nebraska have passed laws permitting schools to provide athletes with uncapped remuneration, potentially leading to confrontations with the NCAA.

Underlying Legal Framework

Historically, the push for athlete compensation gained momentum after the implementation of California’s NIL law in 2019, which was driven by state senator Nancy Skinner. This law enabled student-athletes to profit from their name, image, and likeness rights and restricted the NCAA from penalizing institutions engaging in NIL agreements. Following the Supreme Court’s unanimous Alston decision in June 2021, it became evident that the NCAA was subject to legal scrutiny.

Settlement Specifications

• All NIL agreements exceeding $600 need to be assessed for compliance with fair market value.
• Institutions are prohibited from exceeding the $20.5 million revenue-sharing ceiling, with oversight expected to investigate any transgressions.
• The settlement lacks player representation during its formation, despite involving a class of former college athletes from various sports.

About the House v. NCAA Lawsuit

This class-action anti-trust lawsuit originated in 2020, initiated by Grant House and Sedona Prince, targeting the NCAA and the Power Five conferences for restraining athlete earnings. With attorneys like Steve Berman and Jeffrey Kessler leading the case, the athletes sought to dismantle existing limitations on revenue sharing related to media rights.

The Road to Settlement: Key Developments

Since the landmark O’Bannon case in 2009, which sought to establish NIL rights for athletes, the legal landscape has continuously evolved in favor of player rights. With the NCAA’s eventual settlement of approximately $2.75 billion for back-pay damages, the path forward now includes annual revenue-sharing payments to schools.

What Lies Ahead: The Upcoming Hearing

A significant hearing is scheduled to assess the proposed settlement, and while approval seems likely, any rejection could lead to a trial with potentially catastrophic financial consequences for the NCAA. Moreover, concerns persist about the settlement’s adequacy in addressing gender equity and roster limitations, continuing to lay the groundwork for additional litigation.