NCAA’s $2.8 Billion Settlement Gets Congress Moving Toward Fixes

The NCAA’s court-approved $2.8 billion settlement is accelerating legislation to limit the organization’s antitrust liability; create uniformity with name, image, and likeness deals; and designate athletes as students, not employees.

Antitrust experts say the potential for a federal fix is greater now than ever after approval of the settlement, which allows colleges to directly pay athletes starting July 1.

The deal provides a level of “stability in the NIL world” that wasn’t there before, offering a better likelihood of legislation advancing, said Michael S. Lowe, a litigation partner with Troutman Pepper Locke.

“There’s definitely an interest from this administration in getting some kind of NIL legislation passed,” he said.

Judge Claudia Wilken of the US District Court for the Northern District of California on June 6 granted final approval of the deal, which would also provide back pay to nearly 400,000 class members.

Lawmakers have floated multiple bills in recent years to reform college sports but none have crossed the finish line.

A bipartisan bill (H.R. 3847) introduced this year by Reps. Lisa McClain (R-Mich.) and Janelle Bynum (D-Ore.) would standardize student-athletes’ NIL pay. The House Energy and Commerce Committee held a June 12 legislative hearing on broader draft legislation by Rep. Gus Bilirakis (R-Fla.), which will get other committees’ input.

Whether the NCAA’s wishes will survive in a bill is unknown, along with whether legislation will even move forward. Some lawmakers are divided over labor issues and oppose antitrust exemptions.

But the NCAA is certainly using the settlement as a “tool to get the attention of Congress” and help it gain liability shields to quell future antitrust suits, said Robin S. Crauthers, antitrust partner with McCarter & English LLP.

“There are still other NCAA rules that could arguably be held to violate antitrust laws,” she said. “This is the moment for NCAA to really push.”

Competing Bills

Both bills aim to protect student-athletes’ rights to make NIL agreements, with some restrictions. Bilirakis’ “SCORE Act” proposes a “pool limit” for direct payments to athletes based on college sports revenue, while the others’ “SPORTS Act” focuses on requiring institutions to provide education on NIL opportunities and establishing a database to estimate fair-market value for NIL deals.

Bilirakis’ discussion draft is a broader effort with two other House committees—the House Judiciary and Education committees—to codify elements of the settlement.

It reserves a section for language addressing antitrust liability, which Bilirakis’ office said serves as a placeholder for what the Judiciary Committee will develop.

The McClain-Bynum bill focuses more on athlete protections and education, requiring institutions to provide career preparation and medical care.

Both bills aim to preempt state laws and clarify that student-athletes aren’t employees, a core issue the NCAA hopes to resolve through federal legislation.

The SCORE Act “is not just another proposal,” Bilirakis said at the June 12 hearing. “It’s a targeted solution designed to bring predictability, fairness, and long-term balance to a system that has rapidly evolved without structure.”

Federal Exemption

The only way for the NCAA to put its antitrust issues to bed is to get a blanket federal liability shield, Lowe said. Just because the deal was approved doesn’t mean the organization is free from antitrust threats.

Student-athletes can still sue the NCAA over any of the settlement provisions, including a controversial cap on college athlete salaries, Lowe said.

A group of female athletes on June 11 appealed Wilken’s approval on Title IX grounds, and a separate group filed notice of a similar appeal Monday. Other appeals to the US Court of Appeals for the Ninth Circuit are possible.

“Whatever law is passed would need to make it very clear that the things that the House settlement has done are exempted from the Sherman Act,” Lowe said, referring to the settlement’s lead plaintiff, Grant House.

But more conflict over exemptions to antitrust laws, which are disfavored by the courts, should be expected, said Diana Moss, vice president and director of competition policy at the Progressive Policy Institute.

Major League Baseball is the only sports organization with an antitrust exemption, stemming from a 1922 Supreme Court decision that concluded baseball exhibitions don’t implicate the Sherman Act.

An exemption for the NCAA would allow anticompetitive practices that would otherwise be subject to market forces, harming student-athletes and, ultimately, consumers of college sports, she said.

“It would be the most contentious subject of debate, without a doubt,” Moss said.