House settlement could spark new wave of antitrust lawsuits

Friday’s long-form House v. NCAA settlement filing is expected to bring a new wave of lawsuits.

While the agreement will bring revenue sharing into college sports and pay $2.8 billion in back damages to athletes over the next 10 years, much of the weekend for stakeholders was spent digesting what it means for future athletes.

The settlement does not ban collectives but handcuffs them unlike ever before. Since a preliminary injunction was handed down against the NCAA in February, collectives have operated with ease. The NCAA even announced it was halting all investigations into the third-party organizations.

The words “true NIL” and “fair market value” have been tossed around since the NCAA and Power Five conferences signed off on the settlement’s term sheet in May. A new voluntary reporting system for deals that surpass $600 is scheduled to start next month. Plus, the NCAA is creating a public database it hopes will allow athletes to assess fair market value.

House settlement: 3rd-party deals over $600 need approval

The settlement spells out that compensation must be “at rates and terms commensurate with compensation paid to similarly situated individuals.” Beyond “commensurate” payment, the settlement says all third-party NIL deals of $600 or more must be approved by a clearinghouse that will vet contracts. If not approved, the settlement says a new third-party arbiter could deem athletes ineligible or result in a school being fined.

The filing also stated athletes who enter into multiple NIL agreements or receive NIL payments from the same third parties with an overall value of $600 or more will need to submit contracts or payments.

Athletes can appeal to a neutral arbitrator, which will be quicker than the current NCAA process. An arbitrator must rule within 45 days, however, but extensions are allowed. Rulings are “final and binding.”

Brian Davis is the CEO of California-based law firm Forward Counsel, which also operates as an athlete agency, Power Up Sports. The firm represents hundreds of high school and college athletes in the NIL space.

He told On3 on Sunday afternoon he’s already exploring legal options for the first time a contract is denied by an arbitrator or an athlete’s deal is determined to not be “fair market value.” Another agent told On3 they’re working on assembling claimants.

House settlement could violate Sherman Act protections

Davis told On3 that these measures described in the settlement take back control of athletes’ rights and could violate antitrust laws and the protections of the Sherman Act.

Speaking to a handful of collective leaders, some described it as “bullshit” while others called it “comical.” The expectation is the language will be challenged in the courtroom.

“All this is doing is giving the NCAA power back over their athletes,” said Russell White, president of The Collective Association, which has over 40 members. “This will take away opportunities for athletes to earn money off their name, image and likeness, which is the problem that got us to where we are in the first place.

“The fact the NCAA is unable to stay out of their way on these things is incredible to watch.”