Proposed NCAA settlement allowing revenue sharing with athletes faces possible legal hurdle

As the NCAA, major college athletic conferences and plaintiffs in three antitrust lawsuits in federal courts in California close in on a comprehensive settlement proposal that would pay current and former college athletes billions of dollars in damages and dramatically alter how current and future athletes are compensated, lawyers for the plaintiffs in a fourth case signaled on Tuesday evening that they are seeking to keep the association and the conferences embroiled in a similar litigation.

That fourth case is set for a hearing Thursday before U.S. District Judge Charlotte Sweeney in Colorado who is considering the association’s and conferences’ request to have the matter transferred to California, where it likely would be folded into the cases moving toward settlement.

Pending remaining approvals — including approvals from the courts — such a consolidation would smooth the NCAA’s path to finally resolving a set of cases that began in June 2020, but are rooted in litigation that has had the NCAA on edge for 15 years due to the continuing efforts of plaintiffs’ lawyers Steve Berman, and, more recently, Jeffrey Kessler. Earlier Tuesday, lawyers on both sides of the three cases seemingly headed toward settlement expressed confidence to USA TODAY Sports that they will prevail on having the fourth case moved to California.

Meanwhile, the ACC and Big 12 both voted Tuesday to approve the proposed legal settlement, according to ESPN. The other three remaining Power Five conferences will vote later this week. The NCAA Board of Governors also must approve the deal.

If the bid to move the fourth case to California is rejected, it could continue in Colorado. If that happens, the NCAA, the conferences and the plaintiffs’ attorneys in the cases seemingly headed toward settlement may have to deal with lawyers who wrote in a filing Tuesday evening that “it seems likely” that one of their plaintiffs “will opt out of any such settlement to continue to litigate their claims in this case … plaintiffs expect that many other athletes will opt out as well and could seek to join this case to seek better and fairer terms for athletes.”

Garrett Broshuis, a lead attorney for the plaintiffs in the fourth case, told USA TODAY Sports on Monday night that he and his legal team have “real concerns” about the terms of the settlement proposal that’s being finalized for the other three cases “economically and about (the proposal) potentially foreclosing options and avenues athletes have to fight” for additional rights.

According to a summary of proposed settlement terms first reported by Yahoo! Sports and ESPN and later obtained by USA TODAY Sports, the NCAA would pay nearly $2.8 billion to settle the damages claims over 10-year period and the remaining Power Four conference schools would begin sharing future revenues with athletes. There would be a cap on the percentage of total revenue of the Power Four conferences that would be shared, and while athletes could opt out of the settlement and/or challenge it legally, they likely would have a difficult time getting their terms changed.

Tuesday night’s filing described those reported terms as “alarming” and claimed that would involve “the displacement of one artificial cap on revenue sharing for another artificial cap.” It also took issue with the proposed damages payment amount and the impact of a 10-year payment plan on the present value of the proposed total of nearly $2.8 billion.

Berman responded to USA TODAY Sports by email saying:

"These lawyers have sour grapes over coming years late to these issues and not being at the table. What their pleading fails to address is that the settlement will resolve their claims such that there is nothing left to resolve in Colorado. (Their) forum to address the issues is now the northern district of California where they can present their objections to (U.S. District) Judge (Claudia) Wilken who has spent a decade on NCAA compensation issues. One wonders why they would not want to present their concerns to a judge steeped in the issues?

"And their mindset in raising objections to a settlement that they haven’t seen, a settlement thought (through) by the lawyers who prevailed in opening the rules up shows their true motive is simply not wanting to be left behind rather than to encourage what will be a revolutionary development in college sports."

Broshuis’ group initially brought their proposed class-action case on Nov. 20, 2023, on behalf of former Colorado football Alex Fontenot. In early February 2024, they added former Colorado women’s basketball players Mya Hollingshed as a plaintiff.

In the amended version of their complaint, the plaintiffs’ lawyers wrote that their case “takes aim at the full cut of television and other revenues would receive in a truly open market” rather than the one that exists under the NCAA’s rules.

They are asking for an injunction that would bar any NCAA rules that prevent such an open market – basically the creation of a formalized pay-for-play system in which athletes can be paid by their schools for their athletic services. They seek to represent all athletes who played for an NCAA Division I team in any sport from roughly 2020 through a judgment in the case. And they are seeking damages covering money that they allege all of those athletes would have received – another multi-billion-dollar award.

On Dec. 7, 2023, Berman and Kessler — who are leading two earlier cases involved in the proposed three-case settlement that have been pending before Wilken — filed a similar case in California on behalf of three athletes, including now-former Duke football player DeWayne Carter.

It seeks an injunction against the NCAA’s athlete-compensation rules and damages for athletes in football, men’s basketball and women’s basketball who played for schools in Power Five leagues - which includes the the about to be downsized Pac-12 - or Notre Dame. With Wilken winding down her career on the bench, it was assigned to U.S. District Judge Richard Seeborg.

In January 2024, Berman and Kessler asked a national panel of judges that determines whether similar cases filed in different federal district courts should be transferred to one district to send the Fontenot case to California. After holding a hearing in late March, the panel rejected that request in early April.

Meanwhile, Broshuis and the lawyers for the Fontenot plaintiffs asked Seeborg in California to either transfer the Carter case to Colorado, stay the case while the Fontenot case proceeds in Colorado or dismiss the Carter case. A little more than two weeks after national panel’s decision, Seeborg rejected all of those requests without holding a hearing, leaving the Carter case active in California.

Now, what remains is the NCAA’s and the conferences’ request to Sweeney in Denver that she transfer the Fontenot case to California.