{"id":261,"date":"2024-09-06T14:00:25","date_gmt":"2024-09-06T18:00:25","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/sportslaw\/?p=261"},"modified":"2024-09-06T14:00:25","modified_gmt":"2024-09-06T18:00:25","slug":"judge-wilken-declines-to-preliminarily-approve-the-house-v-ncaa-settlement-and-raises-concerns-over-third-party-nil-payments","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/sportslaw\/2024\/09\/06\/judge-wilken-declines-to-preliminarily-approve-the-house-v-ncaa-settlement-and-raises-concerns-over-third-party-nil-payments\/","title":{"rendered":"Judge Wilken Declines to Preliminarily Approve the House v. NCAA Settlement, and Raises Concerns over Third-Party NIL Payments"},"content":{"rendered":"

As reported in our prior\u00a0Alerts<\/em>\u00a0(including on\u00a0June 6<\/a>, and August 1<\/a>, 2024), the parties involved in three of the major class action antitrust lawsuits brought against the NCAA:\u00a0House v. NCAA<\/em>,\u00a0Hubbard v. NCAA<\/em>, and\u00a0Carter v. NCAA<\/em> \u2014 all from athletes claiming the NCAA violates the Sherman Act, conducted a fairness hearing on September 5, 2024, before U.S. District Judge Claudia Wilken. At the fairness hearing, the Court declined to rule on preliminary approval of the settlement, after hearing arguments from the attorneys for the NCAA, plaintiffs\u2019 counsel, and other attorneys involved in other litigations against the NCAA, e.g<\/em>., Fontenot v. NCAA<\/em> who have raised objections to the settlement.\u00a0 By way of brief background, and as set forth more fully in our August 1<\/a>, 2024 alert, the settlement agreement outlines a system where the NCAA and Power Five Conference schools will pay $2.75 billion in \u201cback-pay\u201d damages to multiple classes of athletes, provides an opportunity for colleges and universities to opt in to a revenue sharing arrangement to share approximately 22% of the average annual power conference revenue with the athletes, and imposes restrictions on \u201cpay-for-play\u201d payments by third-party collectives an boosters.<\/p>\n

At the fairness hearing, Judge Wilken declined to rule on preliminary approval after raising various concerns regarding the NCAA\u2019s efforts to limit athlete compensation from outside entities. Specifically, and most notably, Judge Wilken stated that she was \u201cquite concerned\u201d with the\u00a0settlement\u2019s proposed restrictions on third-party NIL payments, particularly from boosters and NIL collectives, and the justifications for those restrictions. Under the proposed settlement, college athletes would be required to report all third-party NIL contracts worth $600 or more to a newly created clearinghouse database, and requires all such deals to be for a profit seeking business purpose and represent a \u201cfair market value\u201d payment. The settlement would also empower the NCAA and power conferences to form a \u201cdesignated enforcement agency\u201d that would determine whether those reported third-party NIL deals provide fair market value. In theory, this would eliminate pay-for-play inducements \u2014 which are currently against NCAA rules, but have gone unenforced since a federal ruling in Tennessee v. NCAA<\/em> earlier this year.<\/p>\n

Judge Wilken took issue with the settlement\u2019s proposed restrictions regarding third-party NIL, and how they differed from the current NCAA guidelines, stating: \u201cWhat I\u2019m concerned about is whether the change from what\u2019s in the guidelines to what is in the settlement agreement is going to mean that some people who are getting large sums of money in third-party NIL right now will no longer be able to get them.\u201d Judge Wilken seemed concerned about the Settlement\u2019s attempt to \u201ccap\u201d these third-party NIL deals, and how this is not just another artificial and anticompetitive cap on player compensation \u2013 asking questions such as: \u201cWhat if Mr. Fan loves his team and wants to give them all a truck, or give them $1 million dollars to get a new player?\u201d said Wilken. \u201cIs having your team win a valid business purpose?\u201d<\/p>\n

Counsel for the NCAA, without referencing the current injunction on the NCAA\u2019s third-party NIL restriction rules, expressed that it was unlikely that a deal could be reached without a provision in the settlement restricting third-party deals to fair market value.\u00a0 Nonetheless, Judge Wilken expressed optimism that a settlement could be reached, but declined to rule on preliminary approval and advised the settlement attorneys to redraft the agreement to assuage with the Court\u2019s concerns. The parties agreed to confer, and will make supplemental submissions to Judge Wilken on September 26, 2024.<\/p>\n","protected":false},"excerpt":{"rendered":"

As reported in our prior\u00a0Alerts\u00a0(including on\u00a0June 6, and August 1, 2024), the parties involved in three of the major class action antitrust lawsuits brought against the NCAA:\u00a0House v. NCAA,\u00a0Hubbard v. NCAA, and\u00a0Carter v. NCAA \u2014 all from athletes claiming the NCAA violates the Sherman Act, conducted a fairness hearing on September 5, 2024, before U.S. … <\/p>\n

Continue reading “Judge Wilken Declines to Preliminarily Approve the House v. NCAA Settlement, and Raises Concerns over Third-Party NIL Payments”<\/span><\/a><\/p>\n","protected":false},"author":684,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"ppma_author":[364,363,362,369],"class_list":["post-261","post","type-post","status-publish","format-standard","hentry","category-general"],"authors":[{"term_id":364,"user_id":684,"is_guest":0,"slug":"bshapiro","display_name":"Bryan Shapiro","avatar_url":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-content\/uploads\/sites\/24\/2024\/05\/shapirobryan-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":363,"user_id":306,"is_guest":0,"slug":"ajrudowitz","display_name":"Andrew John (AJ) Rudowitz","avatar_url":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-content\/uploads\/sites\/24\/2024\/05\/rudowitzaj-1-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":362,"user_id":660,"is_guest":0,"slug":"spmcconnell","display_name":"Sean P. McConnell","avatar_url":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-content\/uploads\/sites\/24\/2025\/07\/mcconnellsean-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":369,"user_id":687,"is_guest":0,"slug":"lmskipper","display_name":"Leigh M. Skipper","avatar_url":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-content\/uploads\/sites\/24\/2024\/06\/skipperleigh-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-json\/wp\/v2\/posts\/261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-json\/wp\/v2\/users\/684"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-json\/wp\/v2\/comments?post=261"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-json\/wp\/v2\/posts\/261\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-json\/wp\/v2\/media?parent=261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-json\/wp\/v2\/categories?post=261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-json\/wp\/v2\/tags?post=261"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/sportslaw\/wp-json\/wp\/v2\/ppma_author?post=261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}