Preliminary Approval of House Settlement Closer to Remaking College Athletics
On October 7, Judge Claudia Wilken of the United States District Court for the Northern District of Colorado granted preliminary approval of the proposed settlement between the parties in the landmark case of House v. NCAA. The class action case was filed in 2020 by student-athletes alleging they were owed money for use of their Name, Image, and Likeness (NIL).
The proposed settlement agreement seeks to distribute approximately $2.78 billion in damages to be paid out to thousands of college student-athletes. It will also allow colleges and universities to directly pay student-athletes a portion of the revenue they generate from playing sports going forward. Specifically, schools will be permitted to share up to $22 million annually, an amount equal to 22% of the average Power Four school’s athletic department revenue.
The House settlement’s full impact on NIL deals between student-athletes and third parties, including collectives remains to be seen. It is also unclear how the House settlement may impact colleges and universities outside of the Power Four athletic conferences.
Judge Wilken’s preliminary approval is only the beginning of the process to reach final approval of the settlement, which may occur at a hearing for final approval on April 7, 2025. In the meantime, a notice and claims period will begin on October 11, and end on January 31, 2025. During this period, eligible current and former NCAA athletes will receive the terms and claims procedures and be permitted to file a claim.
If finally approved, the terms of the settlement agreement in House v. NCAA will introduce further significant changes to the rapidly transforming landscape of college athletics. With these changes come a new array of opportunities and challenges for various stakeholders, including athletes and universities.
Among the potential challenges are a host of legal considerations that must be carefully managed. Understanding the legal landscape and securing the appropriate legal services has become crucial to effectively navigating this complex environment.
Please contact Michael B. Victorian and Paxson C. Guest or any member of the Phelps Media, Sports and Entertainment working group if you have questions or need advice or guidance.
