The proposed House v. NCAA settlement, which includes the landmark $2.78 billion settlement of three separate antitrust cases facing the NCAA and power conferences, received preliminary approval on Monday from Judge Claudia Wilken in the Northern District of California, clearing the way for schools to begin paying players directly through revenue sharing as early as 2025.
The approval comes after a preliminary hearing last month during which Wilken sent the settlement parties “back to the drawing board,” mainly over issues regarding proposed restrictions on third-party name, image and likeness (NIL) payments to college athletes.
Lawyers representing both sides of the settlement — which aims to resolve the House, Hubbard and Carter antitrust lawsuits — filed a revised version of the settlement agreement late last month that aimed to clarify use of the term “booster,” the original language on third-party NIL collectives and what specifically constitutes the pay-for-play inducements the NCAA is aiming to eliminate as part of the settlement.
Wilken, who previously presided over the notable Alston and O’Bannon cases against the NCAA, did not provide any additional explanation for granting preliminary approval on Monday. The settlement is not yet finalized, though the motion Wilken signed states that the court “will likely be able to approve the Settlement as fair, reasonable, and adequate” while subject to a final approval hearing, which is tentatively scheduled for April 7, 2025.
“We are thrilled by Judge Wilken’s decision to give preliminary approval to the landmark settlement that will help bring stability and sustainability to college athletics while delivering increased benefits to student-athletes for years to come,” NCAA president Charlie Baker said via statement on Monday. “Today’s progress is a significant step in writing the next chapter for the future of college sports. We look forward to working with all of Division I, and especially student-athlete leadership groups to chart the path forward and drive historic change.”
If finalized, the agreement would establish $2.78 billion in retroactive damage payments for former college athletes dating back to 2016 who did not have the opportunity to earn compensation for their NIL. It would also allow college athletic departments to opt into revenue sharing directly with current and future college athletes, starting at north of $20 million annually per school.
“We are pleased that we are one step closer to a revolutionary change in college athletics that will allow billions in revenue sharing,” Steve Berman, one of the lead plaintiff attorneys in the House case, said via statement.
Another critical aspect of the settlement from the NCAA’s perspective is renewed enforcement of NIL rules intended to eliminate pay-for-play payments that have become commonplace among booster-led NIL collectives. The proposed terms allow the NCAA and power conferences to form a “designated enforcement agency,” which the revised agreement specifies would focus on NIL deals stemming from individuals affiliated with an NIL collective, involved in a player’s recruitment, or from families that have contributed more than $50,000 to a university’s athletic department over the course of their lifetime.
The settlement can now progress to next steps, which includes notifying class members — former athletes eligible for damages payments and current athletes eligible for the optional revenue sharing. There have already been objections to the settlement, including one last week from the lead attorney in the O’Bannon v. NCAA case that was decided in 2014 and helped pave the way for college athletes to eventually earn NIL compensation. The objection argues that the damages portion of the settlement is too low, the cap on revenue sharing is unlawful and restrictions on NIL collectives are unfair.
The preliminary approval hearing last month also featured objections from two dissenting groups: one representing a group of women’s rowing athletes arguing the allocation structure for the damage payments is unfair to female athletes, and another representing the Fontenot v. NCAA case, a separate antitrust suit filed in Colorado that is seeking claims similar to the Carter case and argues the NCAA’s rules prohibiting pay-for-play compensation violate antitrust law.
Those parties and others are free to raise objections for the final approval hearing as well. Former Division I athletes available to receive back-pay are eligible to opt out if they choose, and current and future D-I athletes will be eligible to raise objections to the revenue-sharing model.
An approved settlement will not resolve all of the NCAA’s legal battles — including employment status and collective bargaining efforts, possible Title IX complaints or other antitrust litigation — which is why the organization will continue to pursue antitrust exemptions and federal NIL legislation through Congress.
If final approval is granted in April, the settlement would immediately go into effect, with the direct revenue sharing between schools and college athletes starting in July 2025.
(Photo: Isaiah Vazquez / Getty Images)
