House v. NCAA settlement approval delayed after judge digs in on proposed roster limits

The long-expected approval of a landmark antitrust case allowing college players to be paid directly by schools is on hold for at least one week. 

The federal judge presiding over the House v. NCAA case requested attorneys make additional tweaks to the settlement’s terms regarding roster limits and whether future players should be tied to the current class in the multi-billion dollar lawsuit. A final approval could come upon receipt of those tweaks from attorneys, though that might not happen for several weeks.

“Basically, I think it’s a good settlement,” said Judge Claudia Wilken of the United States District Court for the Northern District of California. “Don’t quote me. I think it’s worth pursuing and I think some of these things can be fixed if people tried to fix them.”

The House settlement would allow schools to directly pay players millions of dollars starting July 1. Each school’s revenue-sharing formula would be capped at $20.5 million, with the pool increasing 4% each year during the 10-year agreement. The $2.8 billion in back payments for athletes who competed between 2016 and 2024 would also be set in motion upon Wilken’s approval.

The crux of the issue Monday hinged on new roster limits, which are expected to lead to nearly 5,000 athletes without spots on rosters across the NCAA’s 43 sponsored sports. Wilken suggested that current athletes should be “grandfathered in” and allowed to remain on rosters until their eligibility expires. This would enable schools to temporarily exceed new roster limits, which include unlimited scholarships. NCAA attorney Rakesh Kilaru opposed the idea, though he agreed to work with the plaintiff’s attorneys on a solution.

“We didn’t come up with these roster limits in an arbitrary way,” Kilaru said. “… Roster limits were based on actual people participating in a season, not a particular game.”

Wilken also directed attorneys to find a solution so that future players are not bound to the current terms of the settlement. This could allow new objectors to be heard in court every year during the 10-year settlement window.

The marathon final approval hearing Monday included testimony from 14 objectors, including four athletes, and a question-and-answer session between Wilken and the lead attorneys representing the NCAA and House. Several athletes and attorneys representing objectors voiced concerns over the new roster limits.

“Thousands of people are losing their spots and scholarships,” Utah swimmer Gannon Flynn said. “On paper, more scholarships sound great, but schools aren’t rewarding more.”

Revenue sharing, Livvy Dunne and more: What to know ahead of House v. NCAA settlement approval hearing

Dennis Dodd

Under the settlement, football rosters will shrink to 105 players, resulting in schools cutting 20 or more players. Some have already begun that process, well before the settlement’s approval.

Objector Gracelyn Laudermilch, a high school track athlete, told the court she recently had a scholarship offer rescinded because of the proposed new roster limits. “No one can explain why roster limits are good for anyone,” she said.

The $2.8 billion settlement, a landmark legal battle, has far-reaching implications anchored by revenue sharing and new roster limits, which might also spark more legal battles with Title IX implications. In the immediate future, the legal settlement is transformative for players because not only will past athletes be compensated for prior restrictions on earning from their name, image, and likeness via the $2.8 billion settlement, but the agreement sets the stage for a future revenue-sharing model, a first in the NCAA’s long history, benefiting thousands of collegiate athletes. 

Plaintiff attorney Steve Berman warned in court that if the settlement is not approved soon, Congress could act to give the NCAA immunity from antitrust issues tied to the House case — and others against the NCAA — that could erase $10 billion in risk. Sen. Ted Cruz is drafting a bill that could provide limited antitrust protections for schools, including identifying players as students, not employees. Wilken appeared nonplussed by Berman’s prediction that a bill would affect the settlement.

What is House v. NCAA?

The class-action anti-trust lawsuit was filed in 2020 by Arizona State swimmer Grant House and women’s college basketball player Sedona Prince seeking an injunction against the NCAA and Power Five conferences. It sought to lift restrictions on revenue sharing of media rights revenues. 

Powerful anti-trust 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 mirror the back-payment formula in their revenue-sharing model for the future. That means roughly 75% of future revenue will be shared with football players, 15% to men’s basketball, 5% to women’s basketball and 5% to all remaining sports. Those numbers will differ from school to school, but most power programs have shared similar models with administrators.

More lawsuits: Concerns over Title IX and antitrust issues will continue after the settlement is approved. However, instead of the NCAA being the lawsuit target, individual schools may soon become the focus. Each school will split the revenue pie based on its own formulas, meaning a women’s basketball player may sue a school if they believe they are not receiving their fair share of cash. The same can be said for a football player if their revenue share is lower than that of a rival player at 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. Those efforts will heat up once again, starting Tuesday. The House Education and Workforce Committee is scheduled Tuesday to conduct its 13th hearing on college sports.

Conference commissioners, athletics directors and coaches will descend Wednesday on Capitol Hill to lobby Congress for federal legislation that would codify the terms of the House settlement, another campaigning effort that began in earnest in 2019. College leaders may also meet with Sen. Ted Cruz, who is drafting a bill that could offer the NCAA limited antitrust protection.

On Friday, members of the House Judiciary Committee will join NCAA president Charlie Baker for a roundtable discussion in Madison, Wisconsin.

New enforcement model: The power conferences are developing an enforcement arm to oversee the settlement terms. The new organization will police NIL deals between players and third parties, and monitor revenue-sharing practices at schools. This new organization will enforce these new rules and handle penalties against schools and individuals. In effect, the NCAA would cede power to enforce regulations tied to improper benefits to this new organization.

Who is footing 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 is utilizing a formula based on revenue distribution presented to each league over a nine-year period starting in 2016, which leans 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 the overall damages, followed by the Group of Five at 10%.The FCS is on the hook for 14% and non-football conferences in Division I will pay 12% of the overall agreement, according to documents reviewed by CBS Sports.

House v. NCAA settlement terms

• $20.5 million salary cap for revenue-sharing at each Division I school (starting July 1)
• $2.77 billion in back payments to as many as 390,000 athletes who played an NCAA sport between 2016 and 2024.
• Outside NIL deals of more than $600 million must be vetted by a third-party clearinghouse
• NIL deals must meet “fair market value.” How that fair-market value is determined is the subject of intense debate.
• Unlimited scholarships with new roster size limits
• 88,104 of approximately 390,000 athletes have filed back-pay claims, said plaintiff attorney Steve Berman. That number should reach 118,879 soon, Berman said.
• 343 athletes opted out of the settlement
• 73 athletes object to the terms of the settlement