The federal judge overseeing the historic antitrust lawsuit governing the compensation of college athletes told lawyers to go “back to the drawing board” in their efforts to settle the case, saying that a nearly $2.8 billion settlement tentatively reached this summer would unfairly limit what athletes could receive from groups of sports boosters.
Judge Claudia Wilken, who is presiding over the House v. NCAA case as she has over numerous other lawsuits involving college athlete compensation, made her comments at a hearing last week to consider the proposed settlement struck this summer by lawyers for the National Collegiate Athletic Association and for the various groups of athletes who have sued the sports governing body over rights to their names, images and likenesses.
The NCAA made major concessions in that settlement to try to maintain its increasingly fragile ability to govern college athletics and whether and how players are compensated. Under the settlement, the NCAA and several major sports conferences agreed to pay $2.8 billion in what is essentially “back pay” for use of athletes’ names, images and likenesses since 2016. The deal would also create a revenue-sharing model going forward in which colleges that choose to participate would agree to distribute roughly a fifth of their annual revenue—roughly $20 million each—to their players.
One key component of the settlement from the NCAA’s standpoint was a provision that would limit payments to athletes from groups of sports boosters known as “collectives.” These groups operate on behalf of specific colleges and pool money to be used to woo prospective players. The settlement seeks to ensure that those payments are actual payments for commercial use of players’ images and likenesses, rather than being merely inducements for an athlete to play at the institution. The NCAA’s recruiting rules have long sought to prevent and punish the outright “buying” of players.
But rather than offer preliminary approval of the settlement at last week’s hearing, as lawyers for the NCAA and the athletes hoped, Wilken expressed doubts that the NCAA could differentiate between legitimate compensation for name, image and likeness and pay for play without unfairly limiting the flow of money to athletes.
Wilken gave lawyers for the NCAA and the athlete plaintiffs about three weeks to revise the settlement in a way that might meet her approval. Lawyers for both sides expressed doubts about whether that might be feasible.
