First Legal Challenge to NCAA Antitrust Settlement Plan

A small Texas university has gone to court to oppose a proposed $2.77 billion settlement that would wipe out a raft of antitrust claims against the NCAA and the nation’s largest conferences and allow schools to immediately begin distributing millions of dollars directly to athletes. fall 2025.

Houston Christian filed a motion in federal court in California, arguing that the settlement would defund academics and marginalized and underserved populations and would prioritize big-money college sports over the needs of non-athlete students. The school claims its interests were not represented during settlement talks, even though it is a member of the NCAA.

Officials at smaller schools across the NCAA noted they were not consulted or given details of the settlement before it was announced last month and said the financial consequences could be dire. Houston Christian’s filing is the first known formal challenge to the proposal, which will require the approval of U.S. District Court Judge Claudia Wilken to go into effect.

Tyler Boyd, general counsel for Houston Christian, said more objections could come in the future.

“I think for other people dealing with this, it raises the issue of fiduciary responsibility,” Boyd said this week. “And whenever there is an issue of fiduciary responsibility, it is about the core mission of the university and are we fulfilling the core mission of the university?”

The plan aims to resolve a number of federal antitrust claims and will also make it easier for schools to share revenue with athletes, a dramatic step that all but ends the NCAA’s long-standing amateurism model.

Defendants in the case included the Atlantic Coast, Big Ten, Bit 12, Pac-12 and Southeastern conferences, but also the NCAA, whose extensive membership includes 1,100 schools with athletic departments of various sizes and budgets.

The NCAA will cover 41% of the $2.77 billion total — mostly by reducing annual payments to member schools over 10 years — while the ACC, Big Ten, Big 12, Pac-12 and SEC will cover 24%. The next five largest college football conferences (American Athletic, Mid-American, Conference USA, Mountain West and Sun Belt) will cover 10%.

The remaining quarter of the total will be covered by non-football conferences in Division I and conferences competing in the second tier of DI football, the Championship subdivision. Houston Christian is in the latter group and competes in the Southland Conference, which has 10 schools and about 4,200 athletes.

“Even now, without the proposed settlement, NCAA member institutions continue to lose countless millions of dollars each year by participating in Division I sports. Few ever generate enough revenue from sports to cover their expenses,” the school said in its motion to intervene — to formally participate — in the case. “The proposed settlement institutionalizes the diversion of money that would otherwise go to member institutions for their core mission of education and research by requiring them to pay damages for athletes’ name, image and likeness and establishing a permanent formula for doing so in the future.”

HCU says 95% of its roughly 2,500 students receive financial aid. Boyd said Houston Christian believes someone needs to pay attention to smaller schools with limited resources.

“I think it’s certainly unprecedented and it’s uncharted territory,” he said. “And the reason for intervening is simply to make our voices heard in these unprecedented times.”

Boyd said he wouldn’t be surprised if smaller schools or other schools looking to join Houston Christian’s fight come forward with more challenges. He said the case is not against athletes, but rather to support ordinary students.

“These institutions will have to look into this matter,” he said. “And it’s certainly up to them whether they want to engage in our intervention.”