House vs. NCAA suit settlement approved: A momentous step

ANALYSIS

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Miami wide receiver Xavier Restrepo (7) runs after a catch against California during the second half in Berkeley on Oct. 5, 2024. JED JACOBSOHN — THE ASSOCIATED PRESS FILE

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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.