It’s not an overstatement to say the future of Division I college sports rests in the hands of a 75-year-old judge in Oakland, Calif., or that a hearing before this judge on Thursday will alter that future.
At 2:30 pm local time, U.S. District Judge Claudia Wilken will hear arguments from attorneys for the NCAA, power conferences and athletes represented by the House, Carter and Hubbard antitrust litigations. They’ll urge Wilken to grant their motion for preliminary approval of a multibillion-dollar settlement.
The settlement envisions the NCAA, conferences and colleges paying college athletes—and their attorneys—roughly $2.8 billion over the next decade for NIL, video game and broadcast compensation they could have earned in recent years. It also calls for colleges to be able to opt in to an arrangement where they’d share revenue with players and, subject to an annual salary-cap-like cap, pay them for media rights, ticket sales sponsorships and NIL.
Under Rule 23 of the Federal Rules of Civil Procedure, Wilken must ensure the settlement is “fair, reasonable and adequate.” To that end, she’ll weigh whether proposed compensation features are sensible considering the NCAA, conferences and colleges allegedly engaged in illegal acts and inflicted economic harms on athletes. The defendants are accused of price fixing, colluding and other violations of federal antitrust law.
The core antitrust problem for the NCAA, and more generally American college sports, is that when colleges, conferences and the NCAA craft membership rules that restrict how each economically competes for recruits and athletes, they interfere with the free market in ways that, plaintiffs say, unreasonably harm competition. Over the years those rules have denied schools and conferences the chance to allow athletes to sign NIL deals without forfeiting NCAA eligibility, restricted athletes’ ability to transfer schools and prohibited schools and conferences from sharing broadcasting revenue with players.
Those are all restraints created and implemented by competing member schools and conferences who comprise the NCAA. Wilken, who served as the trial judge for Ed O’Bannon and Shawne Alston’s successful antitrust lawsuits against the NCAA, is as familiar—and critical—of those restraints as any judge in America.
Wilken has rejected the NCAA’s portrayal of amateurism as inherently different and special, and thus more deserving of deferential antitrust treatment, than other businesses. That portrayal was damaged in O’Bannon’s victory and effectively obliterated by the U.S. Supreme Court’s ruling in NCAA v. Alston (2021). Colleges that compete for students, faculty, staff, grants, marketing, media attention and numerous other pursuits are now just like any other group of businesses that compete and can run afoul of antitrust law when conspiring to limit competition.
Wilken has been urged by several parties, including crew athletes, Ivy League athletes and D-I athletes who are waging antitrust litigations in Colorado, to deny preliminary approval. They assert the settlement fails to meet the “fair, reasonable and adequate” test because—as they tell it—the deal is deeply flawed.
Allegedly, the settlement vastly underpays college athletes compared to their market value, embraces sexism by paying male athletes more than female athletes and obliterates legal claims in other cases. Along those lines, football players are expected to gain the most, with an expected share of about 75% of the settlement, while around 20% would go to men’s and women’s basketball players and just 5% for other athletes.
Attorneys for the settlement’s parties insist those criticisms are either opportunistic exaggerations (i.e., the amount of money paid to athletes would be substantial and a settlement would ensure payments aren’t held up by years of appeals) or flat out wrong (the settlement doesn’t release employment law, immigration law, gender discrimination, Title IX or other claims in ongoing or future cases).
Expect attorneys for the players and defendants to stress to Wilken that their deal is not intended to be a universal panacea for all current and future legal challenges confronting amateurism. It is a more limited and targeted resolution for antitrust claims raised in three cases.
It is possible, if not probable, the settlement’s implementation will generate Title IX litigation. There is debate over whether proposed payments concern matters governed by Title IX, which President Richard Nixon signed into law in 1972. The architects of Title IX could not have foreseen there would be a multibillion settlement more than 50 years later that effectively morphs “big-time” college sports into pro sports. It is understandable there is debate about the settlement’s Title IX implications.
Likewise, the settlement could spawn immigration law problems for international athletes who are on student visas that limit opportunities for compensation. Once again, expect the settlement’s attorneys to assert those concerns are not reasons to reject a deal that only tries to cure antitrust claims. There is no plausible way of resolving all potential legal problems in one settlement, one case or even one law.
One important factor is that a settlement doesn’t have to be optimal; the saying “don’t let the perfect be the enemy of the good” very much applies. The “fair, reasonable and adequate” threshold accords Wilken wide discretion to determine if the deal, even if flawed and perhaps much better for some than others, is good enough to move forward to the next stage.
The odds are high that in the coming weeks, Wilken will either grant preliminary approval or advise the parties to tweak the deal with the expectation that she’d then approve it. If she grants preliminary approval, she’ll appoint a settlement administrator (the parties recommend Verita Global, a company that specializes in legal settlements and claim administration) and direct colleges to supply athlete information, including physical mailing addresses and email addresses. As Sportico revealed, the notification process will include postcard mailings and a website so that athletes can determine whether they are eligible for settlement compensation and approximately how much they might get.
Athletes who wish to opt out of the settlement will have opportunities to do so. Opting out would mean the athletes forgo potential compensation but preserve claims, meaning they can still sue the NCAA and conference over antitrust issues raised in the cases.
Wilken would also schedule a fairness hearing so that athletes and other parties who object can discuss their concerns before Wilken grants final approval. If Wilken believes the settlement is too far reaching in restructuring college sports or if she finds another source of concern, she can deny the settlement. That would remove the “stay” on the three cases and return them to the docket. UFC fighters and UFC recently learned first-hand about a judge rejecting an antitrust class action settlement.
But chances are Wilken will approve the settlement at the preliminary stage, as that typically happens in antitrust class actions. Doing so would send the settlement to athletes for them to review over a period of several months and potentially object.
