The NCAA’s proposed settlement runs into trouble with a federal judge

A federal judge in California said Thursday she will not grant preliminary approval to the current version of a proposed multi-billion-dollar settlement of three athlete compensation antitrust cases against the NCAA and the Power Five conferences.

Following a 2½-hour remote hearing, US District Judge Claudia Wilken and lawyers for the sides agreed that the parties would get back to her in three weeks with what she termed a “prognosis” for the proposed deal.

While Wilken said “it seems likely enough there will be a settlement,” she also raised the prospect that the lawyers may come back to her and “say … give us a trial date.”

The NCAA’s lead attorney during Thursday’s hearing, Rakesh Kilaru, said during the session that given Wilken’s concerns, he and the accused lawyers “have to talk about whether we have a deal to talk about.”

In addition to providing a nearly $2.8 billion damages pool for current and former athletes over a span of 10 years, the proposed deal would allow Division I schools to start paying athletes directly for use of their name, image and likeness (NIL), subject to a per-school cap that would increase over time.

But the deal also would attempt to bring NIL payments under some enforceable rules, and Wilken said during the hearing she has issues with the proposed regulations, calling them “quite strict” and questioning whether they would end up in athletes losing access to payments they have been receiving from collectives.

“Taking things away from people doesn’t work well,” she remarked.

Wilken also questioned the legality of a deal that, because of its length, stands to impact the rights of future athletes who are far from college age – “the 6-year-old playing kickball on the asphalt,” as she put it. She wondered who would represent future classes of incoming classes of athletes who would be largely bound by the proposed settlement, and whether it was appropriate for the current defendants’ attorneys to do that without them facing significant a conflict of interest due to their connection to this proposed deal.