The proposed House settlement was intended to be filed on September 5th, 2024. However, the federal judge pushed back the settlement because the deal would “limit the ways in which boosters can provide money to athletes.”[1] Judge Wilken expressed her concern with the proposed settlement, majorly in part with a clause that the money provided by booster clubs must be for a “valid business purpose.”[2] The settlement as previously written would not allow student athletes to receive payments from booster clubs at their universities which has been seen as a popular option with the introduction of the name, image, and likeness (NIL) rules implemented by the NCAA. The issue boosters face would stem from the proposed restrictions on third-party NIL.[3] The concern is that the settlement would eliminate the possibility for student-athletes to take advantage of the NIL rules recently implemented by the NCAA. If students now can capitalize on their name, image, or likeness, why would the NCAA and the House plaintiffs strive to take a step back?
With this controversial clause in the settlement, Judge Wilken gave attorneys who represent the NCAA and the Division I athletes represented in the case 3 weeks to discuss whether they could negotiate the terms of the settlement.[4] Attorneys for both sides disagree on the importance of the clause, with the NCAA suggesting it is critical to include as it is a “central part of the deal.”[5] However, attorneys for the plaintiffs agree with the judge that the language should be removed from the settlement.[6] The judge and both parties fear that if a compromise cannot be made, the settlement will be no longer and the case will proceed to trial.
The issue with the booster clause is not new to the courts. Earlier in the year, a Tennessee federal judge granted an injunction “that prohibited the NCAA from punishing boosters or athletes for negotiating any NIL deals as part of the recruiting process.” [7]The court prohibited this practice by the NCAA because it unjustly restricted prevented athletes from discussing and negotiating terms of their NIL deals before deciding where to attend college.[8] The booster clause in the proposed settlement agreement would do just that. Student-athletes and boosters would be prohibited from collaborating through collectives in the same manner that resulted in the Tennessee holding.
The issues with the settlement don’t stop with the parties directly at play. Recently, on Tuesday, September 10, 2024, the South Dakota AG filed a lawsuit against the NCAA over the proposed settlement, alleging that the NCAA “breached its contract with the member institutions, violated its fiduciary duty and went against the precepts of its own constitution.”[9] The lawsuit discusses another pressing concern of the proposed settlement: how the money would be distributed to athletes once approved. South Dakota State and the University of South Dakota allege if approved, the revenue sharing formula intended to distribute money to student-athletes would be inequitable between male and female athletes.[10] Equitable distribution issues aside, this new lawsuit implicates Title IX violations, a whole separate issue than NIL and paying student athletes.
The hope is after the three-week negation period the NCAA and the House plaintiffs will proceed with amicable terms on how to move forward on the issue of NIL collectives. The parties will have until September 26, 2024, to negotiate and take into consideration the judge’s concerns.[11] However, the NCAA now faces an even tougher challenge. The NCAA no longer needs to accommodate the needs of the student-athletes financially, but will need to hear their claims further on issues such as ones brought to light by South Dakota State and the University of South Dakota. In the future, the NCAA will need to keep an eye out for more lawsuits like this one, as the fight for equality in student-athletes rights is a continuing battle.
[1] Dan Murphy, House v. NCAA settlement on hold as judge urges revisions, ESPN, (Sept. 5, 2024), https://www.espn.com/college-sports/story/_/id/41141275/house-v-ncaa-settlement-hold-judge-urges-revisions.
[2] Id.
[3] Justin Williams, House v. NCAA settlement on hold as judge sends parties ‘back to the drawing board’, The Athletic, (Sept. 5, 2024), https://www.nytimes.com/athletic/5749342/2024/09/05/house-ncaa-settlement-college-sports-nil-boosters/?redirected=1.
[4] Dan Murphy, House v. NCAA settlement on hold as judge urges revisions, ESPN, (Sept. 5, 2024), https://www.espn.com/college-sports/story/_/id/41141275/house-v-ncaa-settlement-hold-judge-urges-revisions.
[5] Id. (quoting Rakesh Kilaru, NCAA’s lead attorney).
[6] Id. (citing Jeffery Kessler, co-lead attorney for the plaintiffs).
[7] Id.
[8] Id.
[9] Daniel Libit, South Dakota Attorney General Sues NCAA Over House Settlement, Sportico, (Sept. 20, 2024), https://www.sportico.com/leagues/college-sports/2024/south-dakota-attorney-general-ncaa-house-settlement-1234796742/.
[10] Id.
[11] Justin Williams, House v. NCAA settlement on hold as judge sends parties ‘back to the drawing board’, The Athletic, (Sept. 5, 2024), https://www.nytimes.com/athletic/5749342/2024/09/05/house-ncaa-settlement-college-sports-nil-boosters/?redirected=1.
Alex Brockhuizen (’25) is pursuing her JD at the University at Buffalo School of Law, with a concentration in Sports Law. After graduation, she will be working at Bond, Schoeneck & King PLLC. At UB, Alex is co-director of the Labor and Employment Law Society and Treasurer of the Buffalo Sports Law and Entertainment Law Society. She is also Business Editor of the Buffalo Law Review, where she was deemed a finalist of the Note and Comment Competition her 2L year. Alex is also a former two-sport athlete at Elmira College.
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