House v NCAA antitrust hearing signals long road ahead in high-stakes case

The college sports world will need to wait to find out what precisely is at stake financially for the NCAA and power conferences in the federal antitrust lawsuit in Northern California.

It feels like we’re in the second inning of a long, consequential duel. All that may be riding on the outcome is the future of the college sports enterprise as we know it.

In Thursday’s nearly two-hour motion hearing, U.S. District Judge Claudia Wilken heard arguments from both sides in the House v. NCAA case on two primary issues: Potential class certification, which would raise the ante exponentially for the defendants if granted, and the admissibility of testimonies from three experts.

Important to keep in mind: Wilken is the same judge who ruled against the NCAA in the landmark O’Bannon and Alston cases at the trial court level.

The critical issue here is whether current and former athletes deserve NIL backpay and a slice of TV rights revenue. Wilken’s decision on class-action status will determine the stakes: Could just a few plaintiffs or thousands of athletes potentially receive damages?

Financial damages totaling more than $4 billion could be in play. 

A trial is scheduled for Jan. 27, 2025. Wilken broached the possibility of the trial date being moved. The NCAA’s lawyers also acknowledged that both parties continue to be in discussions regarding a possible settlement.

A spirited discussion on both sides ensued Thursday on several important topics, including the percentage of TV rights revenue – if any – that should be allocated to athletes; how Title IX compliance plays into athletes receiving broadcast revenue; and the basic nature of how the NIL marketplace works.

For a sense of the massive amounts of dollars potentially in play in this case, the NCAA lawyer said that the athletes possibly covered in this suit could stand to receive as much as $400,000 apiece in broadcast revenue during their college careers – and that figure doesn’t even address possible NIL backpay.

Plaintiffs include former Arizona State swimmer Grant House, former Illinois football player Tymir Oliver and TCU basketball player Sedona Prince. 

NCAA claims ‘substantial differences’ in NIL worth

The NCAA lawyers doubled down on their fundamental contention that NIL potential is “inherently individualized,” therefore they argue it’s impossible to paint with a broad brush and award a damages class of thousands of athletes a just financial award.

The requested classes include one for Division I football and men’s basketball players, one for women’s basketball players, and an additional sports class – including all other sports – who have competed collegiately since June 15, 2016. 

The plaintiffs are also seeking an injunctive class that encompasses all Division I athletes who competed from June 15, 2020 – when the complaint was filed – through the case’s judgment.

The NCAA has contended that the case should not be granted class-action status because of “substantial differences” in athletes’ NIL worth. It also requested that Wilken dismiss reports from media consultant Ed Desser and Dan Rascher, a University of San Francisco sports management professor.

Desser claims the value of the use of athletes’ NIL in college sports TV contracts is 10% of the total broadcast revenue for each conference. 

Wilken signaled she’s inclined to accept reports/testimonies from Desser and Rascher. Her line of questioning centered on whether the defendants’ Title IX expert’s testimony should be admissible.

Using the reports of Desser and Rascher, the NCAA has asserted that it would lead to widespread Title IX violations if damages were awarded. That’s because 96% of the allocation would go to male athletes and only 4% to female athletes.

On the issue of why there’s such a gap in broadcast TV revenue for men’s rights deals vs. women’s deals, the plaintiffs’ lawyer said, “Whose fault is that?”

The plaintiffs’ lawyer pinpointed the NCAA – which sets the rights to the men’s and women’s NCAA tournament as well as other Olympic sports championships – to address that. His commentary comes against the backdrop of the NCAA women’s tournament being universally viewed as an undervalued asset. The NCAA is looking to address that when it takes women’s March Madness to market, either as a standalone property or as part of a bundle.

‘Entire college athletics model could be over’

What’s at stake in the House case?

It could potentially eliminate all remaining NCAA rules limiting athletes’ NIL activity, said Mit Winter, a college sports attorney at Kansas City-based Kennyhertz Perry. For instance, it could enjoin the rule preventing schools and conferences from providing NIL payments to athletes. 

It could also further call into question the NCAA’s other compensation limits, Winter said, such as the rule preventing athletes from being compensated for athletic performance. 

Clearly, Wilken is not averse to ruling that NCAA compensation rules violate antitrust law, Winter said. He added that she now has Supreme Court precedent to rely on and adhere to as well, mindful of the Alston decision.

“When you combine all of these factors with the pending Johnson [v. NCAA] case and the NLRB proceedings, we’re looking at a situation where the entire current college athletics model could be over,” Winter said. “If I was the NCAA and other leaders, I’d be quickly working on a new model that takes all of these pending proceedings into account.”