Judge Questions Damages, Fund Distribution in NCAA’s Settlement

A California federal judge sought clarity on how the NCAA’s $2.8 billion settlement designed to resolve antitrust claims would be distributed, along with consideration of scholarship limit claims, as she questioned attorneys for about three hours Thursday.

Athlete plaintiffs in July filed for preliminary approval of the landmark deal with the NCAA and its Power Five conferences, proposing back pay for hundreds of thousands of athletes in other sports across Division I including revenue-generating football and basketball players.

At a hearing on the plaintiffs’ motion for preliminary approval Thursday, Judge Claudia Wilken of the US District Court for the Northern District of California said the proposed deal needed a better explanation of damages and a clearer understanding of how much money each class member could expect to gain. Wilken last year granted class status to at least 184,000 college athletes in various categories.

Wilken said she wanted the settlement to provide a “realistic notion” of how much they could get. “Not everybody is going to get a million dollars,” she said.

Under the deal, NCAA Division I schools can provide their student-athletes with direct payments and benefits worth up to 22% of the Power Five schools’ average athletic revenue each year. That payment pool would be more than $20 million per school in the 2025-26 academic year and grow from there.

The settlement was quickly criticized by women’s advocates, who say the settlement favors male athletes, and scholarship athletes, who allege the NCAA capped scholarship amounts at artificially low levels.

Wilken said she was concerned there was no class representative making a claim for scholarship limits. “My question is do we need such a class rep? If we do, do we have one?” Wilken said.

The scholarship claims remain viable, said Garrett Broshuis, an attorney in St. Louis for Korein Tillery LLC, which represents athlete plaintiffs in the Colorado cases over scholarship limits. “This is a problem that is rampant in baseball, he said, adding that baseball coaches have complained about the issue for years.

Women athletes are being denied fair compensation due to the way the deal is structured, said Steven Molo, an attorney who represents a group of women student athletes who object to the settlement. Under the deal, a football or men’s basketball player would get roughly $135,000, while the average recovery for a women’s basketball player would be approximately $35,000.

Jeffrey Kessler, attorney with Winston & Strawn LLP who represents athlete plaintiffs, countered that notion, saying the antitrust claims are based on the compensation athletes would have gotten on past performance.

“We have to follow the money, and that’s what our experts did,” said Kessler.

Plaintiffs are represented by Winston & Strawn LLP and Hagens Berman Sobol Shapiro LLP.

The case is In re College Athlete NIL Litig., N.D. Cal., No. 4:20-cv-03919, motion hearing 9/5/24.