A group of antitrust cases that have been looming over college athletics may be settled as soon as Monday. In these suits — House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA — athletes sought damages for being barred from monetizing their names, images, and likenesses (NIL), and challenged the National Collegiate Athletic Association’s amateurism principles. A proposed settlement would do more than just award them damages; it would undo longstanding rules governing athletics and usher in a new era.
Programs that compete at the highest levels of college athletics have been looking forward to this day for almost a year. “We are living in a little bit of a purgatory world,” said Gabe Feldman, a sports-law professor at Tulane University. But the settlement’s scope is so significant that many institutions had already been making changes with the expectation that it will be approved.
Judge Claudia Wilken, of the U.S. District Court for the Northern District of California, will hold a final hearing on the proposed settlement on Monday, when she will either rule on it or decide to wait days or weeks before making her decision. If she approves it, the rule changes will go into effect on July 1.
The rough terms of the settlement have been public for almost a year. Colleges in the most lucrative conferences, known as the Power 4, will be bound by the settlement’s terms if it’s approved. Most other Division I colleges have chosen to opt in, which means they will also accept the new rule changes.
The most significant of those potential changes is that colleges would be able to pay their athletes up to $20.5 million — a figure that would go up over the 10 years that the settlement is in place. Although the ink is not yet dry on the settlement, coaches likely already know roughly what share of their college’s sum they will be able to dole out.
“Athletes need to be recruited. Rosters need to be set. Schools need to have plans,” Feldman said.
In November, Yahoo Sports reported on the variety of ways colleges are handling this purgatory phase. Outside organizations that can enter NIL deals with college athletes — known as collectives — are providing them with contracts that will expire or be turned over to the college on July 1, Yahoo Sports reported. Some colleges are signing contracts with athletes already but stipulating that they’re contingent on the settlement being approved.
Another feature of the proposed settlement is that the NIL deals athletes sign with collectives or boosters will be vetted by a third party, not the NCAA. That outside organization is expected to ensure that the NIL deals do not exceed a “fair market value.”
Feldman said there have been few details spelled out about how the organization will work. How will it determine what fair market value is for players when so little data exists on how much college athletes should be paid? “That’s going to be a complicated issue,” he said. But he said whatever the process, it would be geared toward finding and penalizing truly egregious deals. “This is not going to be about questioning whether a $20,000 deal should have been $18,000,” Feldman said. “This will be about a range of reasonableness.”
In addition to signing contracts with players, colleges are adding staff to prepare for the settlement, Feldman said. They’re hiring for general-manager-like roles that will help with scouting, figure out how much athletes should be paid, manage those payments, and decide when to make high-profile hires — such as the University of North Carolina at Chapel Hill’s decision last year to hire Bill Belichick, former general manager for the New England Patriots, to coach its football team.
Feldman said he has not yet seen institutions cut sports, but they are investing less in some to invest more in football and men’s and women’s basketball — the revenue generators. Some have shifted their priorities away from building new facilities in order to keep that money to pay athletes later this year.
Athletics departments are also looking for new ways to generate revenue. Feldman said some have added a “talent fee” to tickets. Others have gotten injections from the main campus. The University of Missouri, for example, gave its athletics department $25 million, plus a $15-million loan, the university announced in January.
Getting that kind of additional funding was always going to be a tough ask for institutions. But between when the details of the settlement emerged last year and this week when the final hearing will take place, many campuses’ finances have cratered. Since President Trump took office in January, his administration has canceled more than $2.4 billion in grants from the National Institutes of Health, almost entirely eliminated the U.S. Agency for International Development, cut from other grant-giving agencies, and frozen additional federal funding at individual colleges.
“It could create more tension between the athletic and research sides of campus,” said Katie V. Davis, an accountant at James Moore who works with athletics departments. She has not yet heard about campuses that had to change their plans for athletics because of the Trump administration cuts, but she expects that will come soon.
Colleges, Davis said, are waiting to see whether all of these cuts are permanent, whether their states might step in with help, or if there are other potential funding sources for research. Campuses trying to plug new holes in research funding may have a harder time justifying funneling millions into athletics in the coming years.
If the settlement is approved, former and current athletes will get $2.8 billion, a sum that will be shared by all Division I colleges. Colleges and the NCAA hope that the proposal will give them a reprieve from the onslaught of litigation they’ve faced in the past few years.
But the settlement “does not address every issue in college sports,” Feldman said. “I think we will continue to see litigation. For those hoping to get equilibrium, I don’t think that’s what this is going to achieve.”
