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

Houston Christian filed a motion in federal court in California, arguing that the settlement would take funding away from academics and marginalized and underserved communities and would prioritize big-money 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.

Officials at smaller schools across the NCAA noted that they were not consulted or informed of the details of the settlements before they were announced last month and said the financial consequences for them could be dire. Houston Christian’s court filing is the first known official objection to the proposal, which will require approval from U.S. District Court Judge Claudia Wilken to take effect.

Tyler Boyd, general counsel for Houston Christian, said more concerns could arise.

“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 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.

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 DI football’s second division, 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 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 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 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 at this,” he said. “And it’s certainly up to them whether they want to engage with us in this intervention.”

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