Court approves $208M settlement of antitrust claims against NCAA and Power Five conferences

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A California district court recently approved a $208 million settlement, including approximately $45 million in legal fees, which partially resolved class-action antitrust claims against the NCAA and so-called Power Five conferences – the Atlantic Coast Conference, the Big Twelve Conference, the Big Ten Conference, the Pac-12 Conference, and the Southeastern Conference.

The plaintiffs, three student athletes, challenged the legality of certain NCAA rules that limited the amount of financial aid Division I football and basketball players could receive for their athletic abilities and the use of their images. Specifically, under the challenged rules, the athletes could receive no more than the “full cost of attendance,” which is the total cost to attend their institution per academic year, including tuition, fees, books and supplies, room and board, transportation, and personal expenses. The plaintiffs alleged that some athletes’ financial aid awards were further limited under the NCAA rules to exclude transportation and personal expenses and the conferences imposed their own rules that implemented and exacerbated the effect of the challenged NCAA rules. The plaintiffs claimed that these rules worked as an unlawful horizontal price-fixing agreement among the defendants and a group boycott against the affected athletes. They sought an injunction against the enforcement of the rules and the ability to receive more than the full cost of attendance for their valuable athletic and marketing contributions to their institutions.

The settlement followed three years of intense litigation. According to its terms, current athletes will receive the full cost of attendance as compensation for their athletic services, and former athletes who completed four years of collegiate athletic service during the relevant time period will receive the difference between the amount they were given while in school and the “full cost of attendance,” which amount is believed to be on average around $6,000 per athlete.

Although the settlement is significant, much remains to be decided in the case including, in particular, the plaintiffs’ request for injunctive relief against enforcement of the rules that they say constitute anticompetitive agreements. If the plaintiffs are successful in this regard, there is a possibility that Division I student athletes will gain the ability to negotiate the terms of their athletic contributions to (and the use of their images by) their institutions – which would be enormously lucrative to the most in-demand athletes.

DeAngelo LaVette, a law clerk at McDonald Hopkins, assisted with the writing of this blog
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