NCAA Antitrust Settlement Challenged by Lawyer Ed O’Bannon

The lawyer who represented former UCLA men’s basketball player Ed O’Bannon in a landmark antitrust victory against the NCAA has filed papers opposing a recently revised version of proposed multibillion-dollar settlements in three athlete compensation cases against the NCAA and the Power Five conferences.

The filing, filed late Wednesday evening Pacific Time (early Thursday morning Eastern Time), indicated it was filed on behalf of a group consisting of three current college athletes, two former college athletes and two current college athletes medium. He also mentions one of the parents of a high school athlete who is also a former college athlete.

“The settlements contain illusory, contradictory and excessive terms… (they) go too far, offer too little, present too many contradictions and should be rejected,” says the document signed by lawyers including Michael Hausfeld, who led O. “Bannon is suing in a case that was decided in 2014 at the district court level by the same judge presiding over the proposed settlement.

Among the items justifying Hausfeld’s new position is a letter from the governors of five states that do not have a Power Five school to NCAA President Charlie Baker and the NCAA Board of Governors calling on the association to “restructure the agreement to address the concerns of our colleges and universities, which make up the majority your member conferences.”

South Dakota’s attorney general filed a lawsuit against the NCAA in state court there, seeking a halt or modification to the settlement, and its governor, Kristi Noem, joined the letter, which was also signed by the governors of Montana, Idaho, Wyoming and North Dakota.

Under the proposed settlement, the NCAA and conferences would fund a $2.8 billion compensation pool for current and former athletes over 10 years and allow Division I schools to share revenues with their athletes by paying them directly for use of their name, image and likeness (NIL), subject to a per-school limit which will increase over time.

Lawyers for the plaintiffs, the NCAA and the conference sought preliminary approval of the settlement from U.S. District Judge Claudia Wilken in California.

During a hearing on the matter on September 5, Wilken stated that she would not approve the original version of the settlement, citing concerns about the impact of the new regulatory structure on certain types of NIL contracts currently entered into by athletes. in place under the settlement.

Last week, lawyers involved in the proposed deal provided Wilken with an updated version that included minor changes intended to address her concerns.

Since this version is awaiting some action from Wilken, the motion filed overnight indicated that she should reject it.

He made some of the same points that previous opponents of the settlement had made and added new ones. For example, he maintains that recent changes to the proposed settlement do not address one of the issues raised by Wilken during the hearing, when she seemed surprised by an NCAA lawyer’s contention that NIL payments from schools to athletes do not constitute play compensation.

Currently, the NCAA has rules prohibiting athletes from being paid to play or entering into NIL agreements as an inducement to enroll in or remain at a particular school. However, the association has virtually failed to enforce these rules. Initially, this was driven by the growing number of school benefit collectives – groups of donors dedicated to pooling resources for NIL payments that are often, at best, only loosely based on the value of an athlete’s NIL rights or promotional work. As of February, it was also prompted by a federal judge in Tennessee issuing a preliminary injunction in a case brought by the state’s attorney general, which states that recruits and transfers can negotiate and sign NIL agreements before enrolling at the university.

Under the original version of the settlement, athletes would have had to report NIL payments of more than $600 to the established clearinghouse. And their contracts – if they are entered into with a ‘repeater’ – will be subject to a review aimed at preventing pay-to-play and contracts that pay above market value.

Athletes who have questions about the admissibility of their agreements will be able to seek an advisory opinion from the enforcement group. If an enforcement group wanted to sanction an athlete because of the contract, the athlete would have the option of taking the matter to a neutral arbitrator.

In the amendments tabled last week, the basic reporting, clearinghouse and arbitration processes would remain as originally proposed, but the settlements now reached would abolish the term “reinforcer” and replace it with the new term “affiliate or individual,” which includes a specific five-part definition.

The new filing argues that regardless of terminology, if the purpose of the proposed regulatory arrangement is to prevent pay-to-play, it makes no sense because – and this is clearly italicized – “that’s what sharing revenue with college athletes is all about.” “

The new filing also states that the new regulatory arrangements will effectively “end the opportunities created by NIL Collectives” and “represent an egregious attempt by the NCAA to gain control of a free market that they have no legal authority to control.”

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