One of the most transformative legal cases in the last 50 years of college sports has finally come to an end, for now. After weeks of anticipation, US District Court Judge Claudia Wilken finally gave her approval to the settlement in the House v. NCAA antitrust case. College sports will now spend months and years adjusting. The ruling also creates a new College Sports Commission, which named a CEO just before midnight on Friday.
The Particulars
Wilken issued a 76-page opinion from her Oakland, CA office well into the evening Friday night. It put an end to the case that was first filed in June of 2020. Grant House was a swimmer at Arizona State. He was the lead plaintiff in the case that sued the NCAA and the then-Power-Five conferences over compensation limitations for college athletes.
Now, with Wilken’s ruling, schools will be directly paying college athletes in legally approved revenue-sharing plans. Name, Image, and Likeness contracts with sponsors will be monitored by a financial management company. And the role of boosters and Collectives will be altered or even minimized. Wilken dubbed them financial beneficiaries as “Designated Student-Athletes,” or “DSA” as she wrote throughout her order.
Social Media Attorneys Threatening To Fight Agreement
It is not the end of the legal wrangling for sure. Several prominent attorneys who have expressed their thoughts on social media sites have already stated that they are preparing motions to challenge certain elements of the ruling on behalf of athletes. They are seeking even greater financial freedom than what this ruling affords them. Some will seek a Stay, or a pause, of the implementation of this ruling, something they are unlikely to get.
The settlement agreement was first delivered in Wilken’s court in February. There were numerous hearings to hammer out remaining issues, including some that Wilken took special note of, like roster reductions for college athletics.
The final briefs were delivered a month ago, and it was assumed Wilken would move quickly. The schools and the NCAA wanted to begin moving on implementation on July 1st, the start of the new academic year for colleges and universities across the country. But Wilken, who in similar past cases (O’Bannon v. NCAA; Alston v. NCAA) has made her decisions appeal-proof, was methodical.
The Settlement
In her ruling, Wilken wrote, “The settlement agreement here reflects compromises that were made in light of the legal precedents, which demonstrate that success at a trial can mean that student-athlete compensation restrictions may be lessened but not eliminated. Despite some compromises, the settlement agreement nevertheless will result in extraordinary relief for the members of the settlement classes.”
At multiple points in her written order, Judge Wilken called the final agreement “A reasonable compromise.”
In the agreement, House, representing a class of athletes prior to the O’Bannon case, who did not get the money that now comes from things like NIL, will get $2.8 billion from the NCAA in what essentially amounts to back pay. It will be paid over 10 years by the NCAA. The money will come from the NCAA lowering its annual payments to member conferences in order to cover the costs.
Athletes Getting Paid
Current and future student-athletes can now be paid directly by their schools. The salary cap to start with is $20.3 million per year for an athletic department to spend. The schools are free to spend as much or as little of that as they feel they can afford. And how they disperse it among their athletes is up to each school. Those with football programs are expected to spend up to 70% on those teams.
Athletes can still make more money via contracts with sponsors for the use of their Name, Image, and Likeness, as guaranteed by the results of the O’Bannon ruling. But it will no longer be an unrestrained system. Deloitte, one of the world’s largest financial accounting firms, is being brought in to monitor the system. They have created a clearinghouse called “NIL Go.” It will gauge the new deals against what it determines to be the market value.
Because there is no clear definition from Deloitte or the NCAA as to what constitutes the “fair market,” this will likely be an area of future lawsuits.
Unanswered
What gets left unanswered with any certainty in this is the role of Collectives. The booster-driven money bundlers sprang up after the O’Bannon verdict. They have been used by schools as a way to pay athletes to play, without having to go through actual NIL processes.
Without naming the Collective system specifically, Wilken wrote, “Associated entities or individuals may be prohibited.” At multiple points in her ruling, Wilken referred to “Third parties” as a loose inference to the new limitations placed on Collectives.
New Sheriff In Town
The monitoring of the new rules will be left to the new College Sports Commission. It is being put in place to enforce rules that the NCAA is not empowered to do. Bryan Seeley was named CEO of the commission hours after Judge Wilken finalized her ruling.
Seeley is MLB’s executive vice president, legal & operations. He brings investigative experience, which was critical to him getting this job. In the post-settlement era, the NCAA will no longer be in charge of the enforcement of most rules that pertain to athletes’ benefits. It will still maintain purview over things like academics.
Walk-Ons Get To Stay…For Now
One of the delays in the process was the immediacy of roster cuts by many schools. It is part of the agreement that, as a way to minimize expenses, teams now have lower scholarship limits, and most are eliminating walk-ons from the process.
Wilken, last month, made it clear she was displeased that walk-ons were losing their spots already. She insisted that the schools make it a multi-year process. In her ruling Friday, Wilken wrote, “Class members who lost or may lose their roster spots due to implementation of roster limit provisions…will be exempt from roster limits at Division I schools for the remainder of their DI athletic careers.”
In other words, schools will stop adding walk-ons going forward. But those who have a spot on a roster currently are to retain that position until they have exhausted their NCAA eligibility.
Future Legal Battles Hiding In Plain Sight
There are also assumptions that there will be Title IX legal hurdles going forward. Most women’s sports in college fall under the tag of non-revenue. They don’t produce the revenue of football or basketball. Title IX mandates that women athletes get equality of opportunity, without guaranteeing equal results.
Judge Wilken took a pass on ruling on any Title IX issues. She noted that she cannot project unfair results until the results happen. So, it will take some months before a woman athlete is able to claim disparity in the system and file a suit, and years before it gets any resolution.
Time Frame
As far as the July 1st deadline for implementation, Wilken said that was something of the defendant’s creation. The schools are not obligated to start the new system exactly on that date.
NCAA president Charlie Baker issued a statement Friday night. He said, “Approving the agreement reached by the NCAA, the defendant conferences, and student-athletes in the settlement opens a pathway to begin stabilizing college sports.”
Baker noted that because the NCAA was sued in federal court any time they tried to impose a new structure on the system, “The result was a sense of chaos: instability for schools, confusion for student-athletes, and too often litigation.”
Other Issues
This is not likely the end of the fight. A few select states have begun to write new laws that say the universities within their jurisdiction do not have to follow the new rules. The goal is to create a competitive imbalance in favor of their home-state schools.
But all of the schools in the Power Four conferences voted to accept the settlement, making them de facto signatories to the legally binding agreement.
There is also likely to be some legal wrangling on behalf of the Collectives. Many coaches do not like the idea of being financially beholden to the booster groups. Schools may follow Wilken’s ruling and use the money-raising groups for the smaller athletic programs as a way to minimize their exposure. Wilken’s ruling also called into question whether Collectives have any legal standing to fight the current settlement.
And then there is Congress. Many in the House and Senate are trying to formulate a national plan that all schools would be compelled to follow. The terms of the House v. NCAA settlement last for 10 years. That is the ticking clock that national legislators have to work with.
The post Approval of House-NCAA Case Changes College Sports Forever appeared first on Last Word on College Football.