House v NCAA: The Case That Stands to Upend the NCAA

Last Updated on April 30, 2024

There is no question that the college athletics landscape is changing. The NCAA finds itself in a precarious situation on almost all fronts as it seeks to redefine its role in college athletics. The NCAA is having its authority challenged by college athletes, state legislatures, and state attorney generals. All of which have forced to NCAA to relax its rules regarding amateurism.

We’re tracking current lawsuits in college sports

Perhaps the biggest change to date in college athletics is granting college athletes the ability to profit from their name, image, and likeness (NIL). While college athletes have enjoyed their new opportunities with much success, the NCAA is still faced with a case challenging their rules as it relates to NIL compensation: House v. NCAA.

The complaint was originally filed on June 15, 2020, before college athletes were granted the right to profit from their NIL. Then Arizona State University Swimmer Grant House and then University of Oregon women’s basketball player Sedona Prince sued the NCAA alleging that the NCAA and the Power 5 Conferences were illegally imposing restrictions on the compensation Division I athletes could receive for the use of their NIL.

This case was consolidated with Oliver v. NCAA, that was filed by former University of Illinois football player, Tymir Oliver. Since the original complaint was filed, college athletes have been granted the right to profit from their NIL. After the passage of multiple state laws seeking to allow college athletes to profit from their NIL, the NCAA amended its rules to allow college athletes to profit from their NIL. Those rules went in effect on July 1, 2021.

What’s at Issue

Despite the changes regarding college athletes’ ability to profit from their NIL, the House case is moving forward as the plaintiffs seek back pay for lost NIL wages. Specifically, the plaintiffs seek back pay for lost NIL broadcasting revenue, lost NIL videogame revenue, and lost revenues for third party NIL deals. The plaintiffs claim that 10 percent of the broadcasting revenue is attributed to college athletes’ NIL being used in the broadcasts.

Additionally, the plaintiffs are challenging the rules that prohibit schools from directly compensating athletes for their NIL. However, the NCAA has already been faced with a more imminent challenge to that rule as the Virginia state legislature recently enacted a law that will allow colleges in Virginia to directly pay their athletes for the use of their NIL.

While some of the issues addressed in this case has been addressed by various state legislatures, this case is still a major point of concern for the NCAA. This case stands to be rather costly for the NCAA as the District Court judge hearing the case has certified the three damages classes the plaintiffs sough to create.

Athletes Who Are Part of the House Classes

The three classes are:

  1. Football and Men’s Basketball Class –  This class consist of all current and former college athletes who have received full grant-in-aid scholarships and compete or competed on a men’s college football team or basketball team that is a member of the Power 5 conferences between June 15, 2016 and Nov 3;
  2. Women’s basketball class – This class consist of all current and former college athletes who have received full grant-in-aid scholarships and compete or competed on a women’s college basketball team that is a member of the Power 5 conferences between June 15, 2016 and Nov 3;
  3. Additional Sports Classes – This class consist of all current or former college athletes who competed on a Division I athletic team prior to July 1, 2021, and who received compensation for use of their NIL as a college athlete between July 1, 2021, and Nov. 3 (excluding members of the previously mentioned basketball and football classes). 

Accordingly, the damages for these classes are $1.4 billion dollars and could increase to $4.3 billion dollars if treble damages pursuant to the Sherman Act apply. Due to the extensive amount of damages, this case could have a significant impact on the NCAA. It could also have a significant impact on the conferences and schools as well possibly putting each entity is a precarious financial situation.

The NCAA filed an interlocutory appeal with the United States Court of Appeals for the Ninth Circuit. However, that the appeal was denied in January of this year. Given the extensive amount of damages at stake, many believe that it is in the NCAA’s best interest to settle the case.

Settlement Discussions

Currently, the trial is set for January 2025. However, news broke yesterday that the NCAA is in “deep discussions” for a settlement, although a deal is not believed to be imminent. The report has the top-end revenue sharing figure at $20 million annually per school, which schools could opt into.

Attorney Mit Winter added an additional clarification worth noting: “This wouldn’t be a long term solution. A settlement only applies to the class members. Some could opt out and a freshman (not in the class) could come in next year and sue. And with a cap it would be very vulnerable to antitrust attack.” 

Check out other current lawsuits in college sports

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