A few minutes after 6 p.m. on Friday, college sports changed forever and for the better. U.S. District Court Judge Claudia Wilken dropped a 76-page guillotine on NCAA amateurism, approving the settlement terms of the landmark House vs. NCAA antitrust lawsuit that allows schools to share revenue with players and creates a new structure for NIL enforcement.
But this is not the end of the economic revolution in college sports. Legal experts are skeptical that key pillars of the settlement will hold up in court.
“The settlement is not a sustainable system,” Tulane law professor Gabe Feldman told the Hotline prior to court approval. “It’s a step forward.”
To understand where the settlement is vulnerable to legal challenges, let’s summarize the four major components:
— Approximately $2.8 billion in backpay to former athletes will be distributed over a 10-year period. The NCAA will cover the costs with money from March Madness.
— Starting July 1, athletic departments will have the option to share $20.5 million annually with athletes, with the amount increasing over time as department revenues (from media contracts and other sources) rise.
Schools can share the full $20.5 million or a lesser amount — or nothing. In the ACC, Big Ten, Big 12 and SEC, approximately 75 percent will be funneled to football and 15 percent to men’s basketball rosters. Olympic sports will receive the rest.
Each school will decide how to allocate the revenue. For instance, a quarterback could receive $2 million at one school but $500,000 at another.
— Rosters sizes will be reduced while scholarships increase.
To best understand this aspect of the settlement, consider football. For decades, teams have been allowed to keep 85 players on scholarship and an unlimited number of walk-ons — many teams carry 30 or 40 of them.
Under the House settlement terms, rosters are capped at 105. Every player could be on scholarship if the school so chooses, but 105 is the maximum allowed. (Current walk-ons will be grandfathered in.) Most schools won’t place all 105 players on scholarship.
— The ACC, Big Ten, Big 12, SEC and Pac-12 — the five named defendants in the lawsuit — have created an independent entity to track revenue sharing and enforce NIL payments: It’s called the College Sports Commission (CSC) and will be led by Bryan Seeley, a former chief investigator for Major League Baseball and assistant U.S. attorney.
But that’s not all. A technology platform called NIL Go will assess what the CSC calls “a reasonable range of compensation” for NIL deals to root out the pay-for-play that currently dominates the talent acquisition process.
Athletes must report their contracts to NIL Go to ensure authenticity. If the deal is rejected, athletes can adjust the terms and resubmit or seek arbitration. Schools that allow athletes to compete with rejected deals could be subject to penalties assessed by the CSC.
“We look forward to implementing this historic settlement designed to bring stability, integrity and competitive balance to college athletics while increasing both scholarship and revenue opportunities for student-athletes in all sports,” Big Ten commissioner Tony Petitti said Friday evening in a news release issued by the CSC.
But there are several potential flaws in the settlement.
First, it does not account for Title IX, the federal law designed to ensure fairness and equity. Of the $20.5 million that will be shared with athletes in the upcoming competition year, approximately $18 million is earmarked for football and men’s basketball even though female athletes account for about 50 percent of the scholarships at any given school.
Attorneys for the plaintiffs believe the settlement will withstand Title IX challenges because the revenue shared with athletes is based on their media value (i.e., their name, image and likeness). And media value is based on market value — not the institutional funds that are linked to Title IX regulations.
However, many legal experts and college sports administrators believe the settlement will be challenged immediately on Title IX grounds.
Another potential flaw: NIL Go, which was designed by Deloitte, will determine the validity of promotional and endorsement deals, effectively creating a cap on what athletes can earn.
In other words, a technology platform designed by a company representing the conferences will determine the legitimacy of NIL deals — whether they fall within a “reasonable range of compensation,” which is code for fair market value.
Expect that aspect of the settlement to be challenged faster than you can say College Sports Commission.
Or as Sam Ehrlich, an assistant professor for legal studies at Boise State, posted on the social media platform X on Friday night:
“So the crux of the legal challenges turn from ‘Who are you to determine what is fair market value and how did you determine it?’ to ‘Who are you to determine what is a reasonable range of compensation and how did you determine it?’ Big change.”
Nor is the settlement guaranteed to prevent the so-called fake NIL, in which booster collectives offer cash in exchange for commitments and participation.
Also, it does nothing to address the transfer portal or athlete eligibility.
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Heck, the revenue-sharing component itself could be in violation of antitrust laws.
“It’s an antitrust settlement that’s not intended to be comprehensive,” said Feldman, the director of the Tulane Sports Law Program. “There are existing antitrust lawsuits that will challenge the new system.”
And yet, the settlement represents a dramatic improvement on the lawless system currently in place by providing, in the words of ACC commissioner Jim Phillips, “much-needed transparency and structure to create a more sustainable model for the long-term future of college athletics.”
All of which brings us to the root contradiction within the multi-billion-dollar deal specifically and the NCAA economic model generally:
This monumental step forward might not hold up in court because it doesn’t address the flaws at the center of the system.
Unless college sports receive antitrust protection from Congress or the schools sign a collective bargaining agreement with the athletes — a step that requires players to be declared employees — the system will remain vulnerable to legal challenges.
Even a system designed to share more than $1.5 billion annually with athletes across the country and root out pay-for-play.
Welcome to college sports, where a court-ordered revolution is merely the end of the beginning.
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