The landmark House v NCAA settlement that would permit Division I schools to share up to 22 percent of their revenue directly with their athletes hit a major snag on Thursday, as US District Court Judge Claudia Wilken literally told the lawyers involved, "Go back to the drawing board."
Plaintiffs attorneys and the NCAA's attorneys met with Wilken via Zoom Thursday for a preliminary hearing to hammer out details of the settlement, which the NCAA agreed to back in the spring.
However, the hearing hit a snag when the NCAA announced, in exchange for agreeing to the settlement, it would like to limit "pay-for-play" arrangements from third-party boosters and collectives.
From the Associated Press:
“Our position is that pay-for-play is prohibited,” NCAA attorney Rakesh Kilaru said.
“Well, but in this House settlement, if it is approved, you will be explicitly paying for play or allowing schools to pay for play. So that no pay-for-play thing is kind of not going to be there anymore, is it?” Wilken said.
Kilaru responded: “There’s still going to be a prohibition on pay-for-play, and there’s discretion for schools to make payments as they see fit under the new regime.”
“And that won’t be pay-for-play?” Wilken said, incredulously.
The NCAA maintained its position that the (roughly) $22 million that schools could pay directly to athletes would be in replacement of the current system, where boosters fund roster payments through collectives. Jeffrey Kessler, the lead plaintiff's attorney, expected that $22 million figure would be in addition to the current crowd-funded system.
After all, the entire reason the NCAA got to this place was its head-in-sand denial of the underground economy that proved there was monetary value in college athletes' services. NIL and collectives have moved those payments from under the table to above it. Collective payments routinely approach or top $15 million for power-conference football teams, with Ohio State believed to be leading the way north of $20 million.
And the NCAA told Wilken it expects that economy to just... disappear.
"What are we going to do with this?" Wilken asked, via ESPN. "I found that taking things away from people is usually not too popular."
Indeed, Yahoo reported this week that the NCAA has been evaluating third-party firms that would serve as a clearinghouse for "legitimate NIL" (Dr Pepper paying Quinn Ewers to appear in commercials) from "pay-for-play" (Dr. Salt, an Austin-based podiatrist, paying Quinn Ewers because he likes the Longhorns).
Back to Thursday, via Yahoo:
As Kilaru described the process, Wilken vigorously shook her head, in clear disagreement that such a situation could exist.
Kessler joined the conversation, telling the judge that plaintiffs and defendants were “not trying to make anything prohibited [in the settlement] that was not already prohibited. This was not designed to eliminate NIL from boosters currently prohibited.”
Wilken, staring coldly back, “That may be your view, but I’m not sure that is the NCAA’s view.”
Wilken told both parties to go back to the negotiating table and meet with her again in three weeks, though no formal date was set. However, there's no guarantee the next few weeks will lead to a different result.
The NCAA is apparently so committed to eliminating collectives and the like that one power-conference president told Yahoo, “There is no reason to settle under these circumstances. Go to trial and take our chances on appeal.”