US Judge Delays Approval of $2.8 Billion NCAA Settlement Over Athlete Rights

A U.S. District Judge in Oakland, California, has temporarily blocked the approval of a $2.8 billion settlement between the National Collegiate Athletic Association (NCAA) and student-athletes, addressing claims related to the commercial use of their names, images, and likenesses (NIL).

According to Reuters, U.S. District Judge Claudia Wilken’s ruling on Wednesday highlighted concerns about a provision within the settlement that would cap the number of student-athletes named to team rosters. Wilken argued that this cap would unfairly impact many athletes within the class action, potentially leading to the loss of roster spots for a “significant” number of students. The judge also provided suggestions aimed at addressing these concerns, with the potential to revise the settlement for the benefit of the athletes involved.

The settlement is part of efforts to resolve three lawsuits accusing the NCAA of violating U.S. antitrust laws by restricting compensation for student-athletes. The case centers on the NCAA’s rules barring payments to athletes, which the plaintiffs contend have stifled fair market compensation for their NIL rights. The proposed settlement includes both past monetary damages and a groundbreaking provision that would allow schools to directly pay student-athletes for the first time.

Per Reuters, Steve Berman, a lead attorney for the plaintiffs, acknowledged that while the judge rejected most of the objections to the settlement, the issue of roster caps remained a significant hurdle. “With the leverage of this order, maybe we will be successful this time,” Berman said. “If not, she is aggressively resetting the case for trial and we look forward to that if need be.”

Related: South Dakota Reaches Settlement With NCAA Ahead of Antitrust Payout Approval

The NCAA, which has denied any wrongdoing in the matter, said it was reviewing the judge’s order. In a statement, the organization expressed its continued focus on securing approval for the agreement, which it described as a “significant” step forward for college athletics.

The proposed settlement not only offers an upfront payment of $2.8 billion but also includes provisions for ongoing payments to student-athletes over the next decade. The plaintiffs estimate the overall pool of funds to be worth around $20 billion, sourced from revenue generated by university sports programs, including media rights and other commercial activities. Schools would be permitted to pay athletes directly from these funds.

However, some athletes and their legal representatives continue to oppose the settlement’s roster cap provisions. As reported by Reuters, the plaintiffs’ lawyers filed a defense on April 14, arguing that the roster limits were reasonable and in line with sports organizations’ ability to establish fair regulations. Despite this, Judge Wilken directed the NCAA, the plaintiffs’ lawyers, and attorneys representing some challengers to the settlement to engage in mediation to explore potential revisions to the settlement.

Statements from attorneys representing student-athletes who oppose the roster limits were positive about Wilken’s ruling. Steven Molo, one such attorney, called the roster limits “arbitrary and cruel,” and said that they were causing unnecessary harm to student-athletes who had dedicated significant time and effort to their sports.

In the wake of this decision, the judge has scheduled additional arguments to address the merits of the plaintiffs’ claims, suggesting that the case is far from resolved.

This case, titled In re: College Athlete NIL Litigation, is being heard in the U.S. District Court for the Northern District of California under case number 4:20-cv-03919-CW.

Source: Reuters