Why the House antitrust case is high stakes for the NCAA

As fans gear up for an enticing buffet of highly anticipated college football games on Saturday, proceedings with even higher stakes will play out Thursday in a Northern California courtroom.

The motion hearing in the federal antitrust lawsuit, House v. NCAA, is the next step in a consequential case that could carry enormous implications for the NCAA as well as the broader college sports enterprise.

Plaintiffs – former Arizona State swimmer Grant House, former Illinois football player Tymir Oliver and TCU basketball player Sedona Prince – are not merely seeking NIL backpay and a slice of the multi-billion-dollar broadcast revenue pie for themselves. The most important part is that plaintiffs have formally requested class certification, which would up the ante exponentially for the NCAA.

In short, the decision by U.S. District Judge Claudia Wilken on the case’s class-action status will determine whether just a few plaintiffs or thousands of athletes could potentially receive damages.

The stakes could be monumental.

“In a large class action like House, class certification is one of the most pivotal stages of the case,” Mit Winter, a college sports attorney with Kansas City-based Kennyhertz Perry, told On3. “With respect to the three damages classes being sought, the plaintiffs are seeking damages for the NIL opportunities that around 15,000 college athletes weren’t able to take advantage of from 2016 to the present. If those classes are certified, the NCAA and defendant conferences would be facing a potential monetary judgment in the multiple billions of dollars since antitrust damages are trebled.”

What athletes could be included in House v. NCAA?

The requested classes include one for Division I football and men’s basketball players who have competed collegiately since June 15, 2016. One for women’s basketball players from the same date and an additional sports class – including all other sports – from the same date are also in play.

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. A trial is scheduled for Jan. 27, 2025. The goal of this particular class is to change current NIL rules.

Considering the enormous cost of potential damages, Winter said, class certification could “put a ton of pressure” on the NCAA and other defendants to at least settle with the damages classes and potentially the injunctive class as well.

Attorneys for the NCAA and college conferences submitted a 50-page legal filing in April in which they argued against the request for class certification. They said that plaintiffs are seeking more than $1.4 billion in damages in the suit. It is unclear if that figure includes the tripling of damages that occurs in successful antitrust cases. 

If it doesn’t, then financial damages totaling more than $4 billion could be in play.

What is the NCAA arguing?

The NCAA contends the case should not be granted class-action status because of “substantial differences” in athletes’ NIL worth. Its brief reads in part: “NIL value varies tremendously over time depending upon individual and team performance, market demand, and innumerable other factors.”

Thursday’s hearing is expected to address the NCAA’s request to dismiss plaintiffs’ reports from media consultant Ed Desser, who claims the value of the use of athletes’ NIL in college sports TV contracts is 10% of the total broadcast revenue for each conference. 

The NCAA also wants Wilken to dismiss reports from Dan Rascher, a University of San Francisco sports management professor. Rascher said in his report the 10% figure would result in each conference allocating that portion of its revenue to football, men’s basketball and women’s basketball players, USA Today reported.

Using the reports of Desser and Rascher, the NCAA 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.

The NCAA stated in its brief: “A starting quarterback and third-string lineman in the same conference would receive the same amount, while the most famous women’s basketball players would receive less than lesser-known backup football players. This is nonsensical …”

Entire current college model ‘could be over’

On Thursday, all eyes will be on a courtroom in the Northern District of California. What’s at stake in the House case?

It could potentially eliminate all remaining NCAA rules limiting athletes’ NIL activity, Winter said. 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. 

Of note: Wilken is the same judge who ruled against the NCAA in O’Bannon and Alston at the trial court level. Clearly, she 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.”