Judge Claudia Wilken of the United States District Court for the Northern District of California set an important deadline Wednesday for the case of House v. NCAA. Wilken gave the defendants 14 days to reach an agreement on phasing out the roster sizes or risk outright rejection of the historic deal.
Wilken wants current athletes to be grandfathered in and allowed to remain on rosters until their eligibility expires. This would allow schools to temporarily exceed the new roster limits, which include unlimited scholarships. Severe cuts would likely leave nearly 5,000 athletes without a spot on the rosters of the 43 sports sponsored by the NCAA.
Wilken first expressed concerns about the list’s limitations when she granted preliminary approval of the case on April 7. NCAA attorney Rakesh Kilaru opposed the idea, although he agreed to work with the plaintiff’s attorneys to find a solution.
The NCAA and the five power conferences – the defendants in this case – issued a statement shortly after Wilken’s new deadline.
“We are closely reviewing Judge Wilken’s order,” the statement said. “Our goal continues to be to secure approval of this important agreement, which aims to create more opportunities than ever for student-athletes while promoting much-needed stability and fairness in college sports.”
Under the settlement, football rosters will be reduced to 105 players, forcing many schools to cut 20 or more players. Some have already started this process, well before the regulation is approved.
The $2.8 billion settlement would allow schools to pay players millions of dollars directly starting July 1. Each school’s revenue-sharing formula would be capped at $20.5 million, with the pool increasing by 4 percent each year over the 10-year agreement. The $2.8 billion in back payments for athletes who competed between 2016 and 2024 would also be implemented with Wilken’s approval.
What is House vs. NCAA?
The antitrust class action lawsuit was filed in 2020 by Arizona State swimmer Grant House and college basketball player Sedona Prince, seeking an injunction against the NCAA and Power Five conferences. It sought to lift restrictions on revenue sharing from media rights.
Powerful antitrust attorneys Steve Berman and Jeffrey Kessler represented the plaintiffs.
If approved, the settlement would resolve three antitrust lawsuits: Carter v. NCAA, House v. NCAA, and Hubbard v. NCAA.
What’s next?
Revenue sharing formula: Many schools are preparing to reflect the arrears formula in their revenue sharing model going forward. This means that approximately 75% of future revenue will be shared with football players, 15% with men’s basketball, 5% with women’s basketball and 5% with all other sports. These numbers differ from school to school, but most power programs shared similar models with administrators.
No more lawsuits: Concerns over Title IX and antitrust issues will persist after settlement approval. However, instead of the NCAA being the target of the lawsuit, it is individual schools that could soon become the target. Each school will share the revenue pie according to its own formulas, meaning a basketball player can sue a school if she feels she’s not getting her fair share of money. The same can be said for a football player if his share of revenue is lower than that of a rival player from another school.
The NCAA will (again) turn to Congress: The NCAA has long lobbied Congress to pass legislation protecting the organization and its members from antitrust litigation. These efforts will intensify again starting Tuesday. The House Education and Workforce Committee is scheduled to hold its 13th hearing on college sports on Tuesday.
Conference commissioners, athletic directors and coaches will descend on Capitol Hill on Wednesday to lobby Congress for federal legislation that would codify the terms of the House rule, another campaign effort that began in earnest in 2019. College leaders also may meet with Sen. Ted Cruz, who is drafting a bill that could give the NCAA limited antitrust protection.
Members of the House Judiciary Committee will join NCAA President Charlie Baker for a roundtable discussion in Madison, Wisconsin on Friday.
New app model: Power conferences develop an enforcement mechanism to oversee the terms of the settlement. The new organization will monitor NIL agreements between players and third parties and monitor revenue sharing practices at schools. This new organization will enforce these new rules and manage sanctions against schools and individuals. In fact, the NCAA would cede to this new organization the power to apply regulations related to undue advantages.
Who pays the bill? The NCAA is responsible for 40% of the $2.77 billion settlement, and the remaining 60% will come from reducing its revenue distributions to the 32 Division I conferences over the next 10 years ($1.6 billion). The NCAA uses a formula based on revenue distribution presented to each league over a nine-year period beginning in 2016, which relies heavily on basketball units tied to NCAA tournament participation, according to Yahoo Sports. The Power Five conferences – ACC, Big Ten, Big 12, Pac-12 and SEC – will pay 24% of overall damages, followed by the Group of Five at 10%. The FCS is responsible for 14 percent and non-Division I football conferences will pay 12 percent of the overall deal, according to documents reviewed by CBS Sports.
Conditions of settlement House v. NCAA
- $20.5 million revenue-sharing salary cap at every Division I school (starting July 1)
- $2.77 billion in back payments to 390,000 athletes who played NCAA sports between 2016 and 2024.
- Transactions outside of NIL over $600 must be reviewed by a third-party clearinghouse.
- NIL transactions must be for “fair market value”. How this fair market value is determined is the subject of intense debate.
- Unlimited scholarships with new list size limits
- 88,104 of the approximately 390,000 athletes have filed claims for back pay, said plaintiff’s attorney Steve Berman. That number is expected to soon reach 118,879, Berman said.
- 343 athletes withdrew from the regulations
- 73 athletes object to terms of settlement
