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 divert funds away from academics and marginalized and underserved populations, and would place high-budget college sports above the needs of non-athlete students. The school claims its interests were not represented during settlement talks, despite being 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 concerns could arise.

“I think for other people who are looking into this, there will be an 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.

The defendants in the case included the Atlantic Coast, Big Ten, Bit 12, Pac-12 and Southeastern conferences, as well as the NCAA, whose large membership includes 1,100 schools with athletic departments of varying sizes and varying 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 through their participation in Division I sports. Few have generated sufficient revenue from athletics 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 be allocated to member institutions for their core mission of education and research by requiring them to pay compensation for athletes’ name, image and likeness and establishing a permanent basis for such action.”

HCU says 95% of its approximately 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. “The reason for intervention is really to have our voices heard in these unprecedented times.”

Boyd said he wouldn’t be surprised to see other challenges from smaller schools or others looking to join Houston Christian’s fight. He said his case is not against athletes, but rather in support of ordinary students.

“These institutions will have to look at this,” he said. “And it’s certainly up to them to decide whether they want to engage with us in this intervention.”