A federal judge in California on Sept. 5 rejected a key part of a proposed $2.8 billion settlement of an antitrust lawsuit against the NCAA and the nation’s five biggest athletic conferences.
During a preliminary hearing on the settlement, Judge Claudia Wilken said she had concerns about a provision in the agreement that would restrict payments to college athletes from booster-funded organizations in schools that provide financial support and resources.
As it stands, boosters can provide names, images, and likenesses to athletes that essentially serve as salaries.
While the deal would see billions of dollars go to current and former NCAA athletes, Wilken said she was concerned it could possibly result in some athletes receiving less money.
As a result, the judge declined to grant preliminary approval to the antitrust settlement and instead ordered attorneys negotiating the deal to return to the drawing board.
The NCAA and plaintiffs must report back to her in three weeks with solutions, the judge said.
Wilken did not set a date for another hearing or state when she will make a ruling on the settlement.
Judge Has More Concerns About Deal
Under the deal, the NCAA and power conferences would fork out around $3 billion in damages over 10 years to former and current college athletes who were denied the right to earn money or endorsement deals off their name, image, and likeness dating back to 2016 under now-defunct NCAA rules.The NCAA lifted its ban on athletes earning money through endorsement and sponsorship deals in 2021.
As part of the agreement, the conferences agreed to a revenue-sharing plan that would allow each school to direct around $21 million annually to athletes for use of their names, images, and likenesses, beginning as soon as the 2025 fall semester, provided the settlement receives final approval.
The deal also established restrictions including a cap on revenue sharing, and an approval process for any name, image, and likeness deals amounting to more than $600.
In exchange, the NCAA would be able to enforce rules banning third-party, pay-for-play to athletes and payments being used as recruiting inducements, which it said will help balance out competition among schools.
Under the terms of the deal, outside arbitrators would determine if rules were violated instead of the NCAA.
During the hearing, Wilken also expressed concerns that the deal might affect future college athletes, who she said may be restricted by the pending revenue agreement, which will last 10 years.
She also compared the revenue-sharing model to pay-for-play, although attorneys for the NCAA said a prohibition on pay-for-play would be in place under the settlement.
In a statement to multiple media after the hearing, the NCAA said that it and the conferences “will carefully consider the court’s questions, which are not uncommon in the context of class-action settlement.”
The Epoch Times contacted the NCAA for further comment but didn’t receive a reply by publication time.
