A federal judge on Thursday rejected a key element of a proposed $2.8 billion settlement of an antitrust lawsuit against the NCAA and major athletic conferences, throwing into uncertainty an agreement that was widely seen as the start of a new era in college sports.
Judge for the Northern District of California, Claudia A. Wilken, at the preliminary hearing, said he was troubled by a provision that would bar payments to athletes from booster-run collectives, donor groups that provide millions of dollars in funding to athletes at colleges. They support.
Although the proposed agreement would allow colleges to pay their athletes up to about $20 million per year, she thought the ban on collective bargaining would reduce the money some athletes would earn under the new deal.
She instructed the parties to go back to the drawing board.
“Some people who get a lot of money can’t get it anymore,” she told lawyers for the NCAA and the plaintiffs, essentially a group of thousands of athletes who came to settle the lawsuit, House v. NCAA “That’s. My concern.”
But NCAA lawyer Rakesh Kilaru said no deal would happen without a provision allowing the NCAA to bar third-party payments that he viewed as pay-for-play compensation under the guise of fair market support deals.
“For us, that’s an essential part of the deal,” he said.
Judge Wilken also asked Mr. Kilaru and the plaintiffs’ lawyers, Jeffrey Kessler and Steve Berman, to report back to her with a revised agreement in three weeks. If they can’t, she said, she would be willing to set a trial date in the case, which alleges that the NCAA and the five major conferences illegally withheld television broadcast revenue that came from using athletes’ names and images.
If a deal is ultimately approved — or if the NCAA loses the trial — it could be the most decisive blow to the amateurism model now central to the growth of a multibillion-dollar industry in which primary compensation is limited to player athletic scholarships.
The proposed settlement has two main parts: one that would compensate players for the revenue they’ve already foregone, and another that would allow colleges to pay their players directly through revenue sharing, a first in nearly 120 years of history. NCAA
The significant delay in finalizing the agreement, which was on track to be completed in the first quarter of next year, will affect plans to implement the new model for the 2025-26 academic year.
Proponents of the agreement say the new model will finally allow athletes to share in the enormous profits generated by their sports. It would also strengthen the NCAA’s hand in fighting additional antitrust suits, which have hampered the organization’s ability to make and enforce its own rules. Critics say the deal still grossly undervalues athletes and treats men’s and women’s sports unequally.
Judge Wilken also expressed reservations about another key component of the deal: the cap on the amount colleges can pay athletes. The agreement claims that the five conferences named in the lawsuit — the Big Ten, the Southeastern, the Atlantic Coast, the Big 12 and the Pac-12 — average 22 percent of athletic department revenue.
Even though the $20 million-plus cap represents a huge increase, she suggested it’s still a cap.
“Is it still wrong?” asked the judge.
Mr. Kessler countered that in a previous case, Judge Wilken applied caps on how much athletes could receive in educational benefits at $5,980 — the so-called Alston payments. Mr. Kessler, who has negotiated changes to the NBA and NFL labor agreements, said that while he prefers an uncapped system, sometimes incremental changes are necessary.
“Every compromise is a compromise,” he said.
But Steven Molo, a lawyer representing a group of female athletes opposed to the settlement, argued: “This is still a ban on trade. The fact that someone gets more money under the cap does not make them less of a cap and trade restriction.
In the two-and-a-half-hour hearing, Judge Wilken’s questions focused on the rights of college athletes — NCAA v. Alston and O’Bannon Vs. The NCAA — in which she prevailed — echoed her measured approach in two other resulting cases. to plaintiffs, albeit with few or narrow remedies.
Despite the concerns she raised with the House agreement, Judge Wilken did not appear to reject a cornerstone of the compromise in principle: the notion that colleges pay athletes directly.
Her difficulty reining in the collective, however, cut deep for the NCAA
When the NCAA investigated the University of Tennessee this year over whether the star quarterback and his family traveled on a private jet provided by the collegiate for a recruiting visit, Tennessee State Judge The NCAA granted an injunction barring it from punishing the football program over the case, asserting that the NCAA had no authority to prevent boosters of college sports teams from paying players.
Mr. Kilaru told Judge Wilken that the new rules put in the settlement banning pay-for-play payments from boosters differed slightly from the current rules. “Under the current rules, all of this is prohibited,” he said.
But the judge was not convinced. In sending the parties back to the negotiating table, she wondered about athletes at colleges that chose not to pay their athletes — or couldn’t afford to do so — and whether tightening the screws on collective bargaining would restrict revenue sources.
“Taking things away from people is generally not very popular,” she said.
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