DOJ Raises Concerns Over $2.8 Billion NCAA Settlement

The US Department of Justice has raised concerns about the fairness of a $2.8 billion settlement agreement between the National Collegiate Athletic Association (NCAA) and student athletes.

The settlement, which is under consideration in federal court in Oakland, California, would mark one of the largest class action recoveries in history, allowing NCAA member institutions to pay student athletes directly for the first time. However, the Justice Department has questioned whether the settlement goes far enough to compensate athletes and protect their rights.

According to Reuters, the Biden administration expressed its concerns in a filing on Friday, focusing particularly on a provision in the settlement that sets a cap on the amount of money available to schools for athlete payments. The Justice Department’s antitrust officials warned that this cap could limit free market competition and reduce the potential benefits for student athletes. The filing described the provision as an “artificial price cap” that could hinder what the market might otherwise yield.

The settlement includes the $2.8 billion fund and additional payments expected to total $20 billion over the next decade from academic institutions, per Reuters. However, antitrust officials argue that the agreement might not be fully beneficial for the athletes it aims to support. They have urged the court to either reject the settlement or modify it to clarify that the cap should not prevent future lawsuits or limit the amount that could be awarded in the future.

Read more: Attorneys Seek $525 Million in Fees in NCAA Settlement Case

In response, the NCAA maintained that the settlement complies with antitrust law and would help usher in a new era for college sports. “The settlement reached on behalf of hundreds of thousands of student-athletes is consistent with antitrust law and will create a new era of college sports,” the NCAA stated.

Steve Berman, the lead attorney representing the plaintiffs, defended the agreement, emphasizing that its terms are clear and transparent. He warned that rejecting the deal could jeopardize billions of dollars set to be allocated to student athletes.

The Justice Department is not directly involved in the lawsuit but has expressed concerns as an observer of the settlement process.

Source: Reuters