House v. NCAA Settlement Hearing Update

Last week, the parties held a preliminary approval hearing via Zoom, presided over by Judge Claudia Wilken in the Northern District of California.

Another Zoom hearing between the parties with Judge Wilken is scheduled for today.

Last week, Judge Wilken told the NCAA and plaintiffs to revisit parts of the settlement, specifically those related to capping spending by third-party boosters and NIL collectives.

She expressed concern that the agreement might reduce the “large sums” of money currently going to athletes. The hearing left the NCAA with a tough decision: either move forward without enforcement around NIL collectives or risk a trial date.

After the hearing, plaintiffs’ attorney Jeffrey Kessler told On3 he’s “100% serious” about going to trial. Over the weekend, sources told On3 that excluding collective/booster restrictions from the agreement could be a dealbreaker for certain conferences. The ACC, Big 12, Big Ten, Pac-12, and SEC are also named as defendants in the suit, along with the NCAA.

The NCAA might choose to rewrite the section, stating it will maintain its current NIL enforcement status quo. This would leave the governing body limited and in need of Congressional help. The NCAA halted all NIL investigations last winter after a preliminary injunction in Tennessee, allowing NIL collectives to openly negotiate with recruits.

Alternatively, the NCAA could opt for a trial date and have the lawsuit tried.

The NCAA must reach a consensus on changes to enforcement around boosters or accept the possibility of being liable for $20 billion in back damages if the case goes to trial.

In a letter to membership last week, NCAA president Charlie Baker wrote, “Last night’s hearing did not go as we hoped. The court posed worthwhile questions, and we began working through them immediately with our partners in the conferences. The proposal presented to the court was the product of months of negotiations with student-athletes’ attorneys, who have a proven track record of effective athlete representation.”