Lawyers negotiating a $2.78 billion settlement in class-action antitrust cases against the NCAA and the nation's largest college conferences are working to clarify parts of the agreement that a judge wanted addressed before deciding whether to allow the landmark deal to move forward.
At a hearing two weeks ago, U.S. District Judge Claudia Wilken declined to grant preliminary approval, expressing dismay at a plan to regulate and potentially restrict third-party name, image and likeness payments to athletes from sponsor-funded organizations called collectives.
Wilken set a Sept. 26 deadline for attorneys for both sides to brief him on certain amended portions of the settlement agreement.
“We've made a lot of progress in our discussions with the NCAA about how to respond to the judge's questions and provide some clarifications in cases where the judge didn't think the language was clear enough as to how these things will work,” Jeffrey Kessler, one of the lead attorneys for the plaintiffs in House vs. the NCAA, said Tuesday. “And we're confident that when we provide all of this information, the judge will grant preliminary approval.”
The NCAA, along with five major conferences (Big Ten, Big 12, Atlantic Coast, Pac-12 and Southeastern) and plaintiffs in three antitrust lawsuits involving athlete compensation, reached a settlement in May. The agreement pays nearly $3 billion in damages to current and former college athletes who were denied the opportunity to profit from their fame. It also establishes an innovative revenue-sharing system that will allow schools to allocate more than $20 million per year to their athletes.
Wilken's issue with the portion of the agreement that would attempt to curb booster payments to athletes made under the guise of NIL agreements — an element of the deal that was a high priority for the conferences — appears to pose the biggest obstacle to its passage.
Steve Berman, the plaintiffs' other lead attorney, declined to provide details on how Wilken's questions are being addressed but suggested there will be no substantive changes. “It won't be drastic, no,” he told the AP.
Kessler said the two sides have not reached an agreement on how exactly the proposed restrictions on certain NIL agreements with third parties will be re-presented to the judge.
“But we feel we need to clarify that provision so the judge can understand what it does and does not do compared to what the NCAA rules already prohibit,” Kessler said.
Berman said there is concern that if the judge is not satisfied and the only option is to remove these proposed restrictions, it could be a deal breaker.
“But I'm not sure the judge appreciated the money dynamic,” Berman said. “There's a tremendous amount of money coming to students that wasn't there before. So I think we need to refocus on that.”
The NCAA and the conferences hope the agreement will bring some clarity and structure to an enterprise that has been under constant legal and political attack for years. The deal won’t stop all legal challenges in college sports, but it will provide a new way of doing business and a framework that leaders can present to Congress in hopes of gaining support in the form of a federal law.
State lawmakers and politicians continue to add to a confusing patchwork of different rules across the country. On Tuesday, Georgia Gov. Brian Kemp signed an executive order giving the state’s schools the ability to pay athletes directly without interference from the NCAA or conferences. The order is similar to laws in other states that provide schools protection from NCAA enforcement.
As for the deal, it's unclear when Wilken will decide on the request for preliminary approval after he receives answers to his questions late next week.
“I think we could make it clearer,” Berman said. “We're working on that.”
