First Legal Challenge to NCAA’s $2.8 Billion Antitrust Settlement Plan Comes from Houston Christian

The small Houston university has gone to court to object to a proposed $2.77 billion settlement that would settle a slew of antitrust claims against the NCAA and the nation’s largest conferences and allow schools to start giving millions of dollars directly to athletes as early as 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 prioritize big-budget college sports over the needs of non-athlete students. The school says its interests were not represented during settlement talks despite being a member of the NCAA.

Smaller NCAA school officials noted they were not consulted or informed about the details of the settlement before it was announced last month and said the financial impact to them could be devastating. The court filing by Houston Christian is the first known formal opposition to the proposal, which will require approval from U.S. District Judge Claudia Wilken to go into effect.

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

“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 whether we are fulfilling the core mission of the university.”

The plan is intended to resolve a series of federal antitrust claims and also allow schools to share revenue with athletes, a dramatic step that effectively puts an end to the NCAA’s long-standing amateur model.

The defendants in this case included the Atlantic Coast, Big Ten, Bit 12, Pac-12 and Southeastern conferences, as well as the NCAA, whose large organization brings together 1,100 universities 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 made up of non-football conferences in Division I and conferences that compete in the second tier of DI football, the Championship Subdivision. Houston Christian is in the latter group, competing 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 said 95% of its roughly 2,500 students receive financial aid. Boyd said Houston Christian believes someone needs to take care of smaller schools with limited resources.

“I think this is certainly unprecedented and this is uncharted territory,” he said. “And the reason for the intervention 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 filed additional challenges. He said the case is not against the athletes, but rather in support of regular students.

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