House v. NCAA settlement complicated — and still not settled | University Times

By SUSAN JONES

If you’ve been paying attention to the business of college athletics, you probably know that big changes have been happening — and more are on the way.

“The impacts are going to be real, that’s for sure, and in many ways, it’ll be unrecognizable, even though a lot of people just have their eyes closed or their blinders on,” said Mike Epitropoulos, a Pitt sociology professor and chair of the University Senate’s Athletics & Recreation committee.

For those who haven’t paid attention, the key phrases are “House settlement” and “Name, Image and Likeness (NIL).”

The money involved in the proposed House settlement could have lasting impacts not just on college sports, but also on colleges themselves.

Pitt recently said in a statement: “The University of Pittsburgh is extremely proud of its rich and robust tradition of athletic excellence, and we are committed to building upon that legacy by implementing the provisions of House vs. NCAA settlement, should it be approved by Judge Wilken. We believe the proposed settlement provides clarity and a path forward as the University and its student-athletes take the next steps forward together in this new era of college athletics.”

What is the House settlement?

The first thing to know is the House vs. NCAA case is not settled, yet. U.S. Judge Claudia Wilken was initially scheduled to rule on the final settlement in early April, but she had several questions, particularly about roster limits (more about that later).

The case stems from a 2020 lawsuit by Arizona State swimmer Grant House and women’s college basketball player Sedona Prince, along with two separate suits by other college athletes, which were combined into one case. The suits argued that the NCAA and the top-tier conferences — including the ACC, which Pitt belongs to; Big Ten, Big 12, Pac-12 and SEC — violated antitrust law by collectively agreeing to not provide benefits and compensation to student-athletes, and denying student-athletes the opportunity to profit from use of their name, image and likeness.

Over the past several years, many states — including Pennsylvania since 2021 — have allowed third parties to pay student-athletes in NIL deals, but universities were still prohibited from paying students directly.

After many years of discussions, a preliminary settlement was reached last October. The key details of the plan include:

Back pay: The settlement includes $2.78 billion in back pay for athletes who competed between 2016-24 and were either fully or partially shut out from NIL payments. The money will be paid over 10 years — 60% by the NCAA from its reserves and 40% from the schools. Most of the schools’ part of the settlement will come from revenue they would have received from the NCAA for events like the March Madness basketball tournament.

Still in question is how the back pay will be divided among all Division I athletes. Some estimates say that up to 95% will go to football and men’s and women’s basketball players. A specific distribution plan, designed by the plaintiffs, will determine individual back pay amounts.

Revenue sharing: Under the 10-year deal, schools will be able to pay students directly for NIL rights, up to a cap of 22% of their annual revenue from things like media rights, ticket sales and sponsorships, which currently average about $23 million per school.

NIL deals: Student-athletes can still negotiate external NIL deals under the settlement, but would have to report any third-party NIL compensation greater than $600. And there would be increased scrutiny on these deals.

Roster limits vs. scholarships

The big stumbling block now delaying Judge Wilken’s final approval of the settlement is the provision that does away with athletics scholarship limits and instead institutes roster limits for each sport.

For instance, the initial proposal would limit football to 105 players, instead of the 85 scholarship players now permitted. In 2023, Pitt had 110 players on its football team, with 25 not on scholarship. This limit would essentially eliminate “walk-on” players.

Some schools have already made some roster cuts in anticipation of the House ruling being implemented in July, although Pitt has not. Pitt football coach Pat Narduzzi told the Post-Gazette that his understanding is the 105 number doesn’t need to be met until classes officially start, so he has some time to decide.

Ohio State Athletic Director Ross Bjork told the school’s Board of Trustees last year, according to the Columbus Dispatch, that roster limits could mean a reduction of about 150 student-athletes out of a total of 1,100 a year, and that some sports would become more like club sports. Shortly after his comments, Ohio State eliminated scholarships for the men’s gymnastics program.

Attorneys submitted a compromise proposal last week that would allow, but not require, colleges to grandfather in players who would have been or who already had been cut because of the roster limits and let them play for as long as their NCAA eligibility lasts.

During that time, those players would not count against the roster limits. That includes athletes who were “certified for practice or competition” during this current academic year season, prior to April 7; or any new recruit who was assured a spot on the team roster for 2025-26.

Those who objected to the original roster limits had until May 13 to reply. Lawyers representing athletes who lost their roster spots called the proposed solution insufficient.

Where will the money come from?

Pitt Athletics reported $69.1 million in revenue for fiscal year 2023-24, according to the most recent Stairs Report required by the state, and expenses of $108.5 million — leaving a nearly $40 million deficit. If Pitt had paid student-athletes up to the 22% cap that year, it would have added another $15 million to the deficit.

And even more profitable programs are questioning how they will come up with the money. The Associated Press quoted Alabama Athletic Director Greg Byrne, who told Congress “Those are resources and revenues that don’t exist.”

Sheila Vélez Martinez, the University’s faculty athletics representative and professor of asylum refugee and immigration law in the School of Law, said an analysis by the Knight Commission shows that around 2% of the budget for Power Four conferences’ athletic departments — which include the ACC — comes from institutional funds. The rest is mostly media rights and donations, business deals with sponsors, sponsorships and ticket sales.

One Pitt alumnus, attorney J. Byron Fleck, has tried to get the Board of Trustees to vote on a resolution that would prohibit any part of student tuition and fees or appropriations from the state from being used to pay players under the revenue-sharing proposal in the House settlement.

So far, he hasn’t had any luck in getting the trustees to take up the matter.

More issues in the future

If all the issues involved in the House settlement weren’t enough, other potential problems may lie ahead.

“What we see today, it’s not what we’re going to have by the end of the decade,” said Sheila Vélez Martinez, the University’s faculty athletics representative and professor of asylum refugee and immigration law in the School of Law. “There’s too much at stake for too many people.”

No matter what Judge Wilken eventually rules, there’s likely to be more lawsuits regarding issues about how the back pay money is divided or over students losing roster spots or teams being cut.

Congress also might pass legislation that allows student-athletes to collectively bargain, but then not be considered employees, Vélez Martinez said, which will add an extra level of complexity for athletic departments. There also might be a move for the power conferences to break away from the NCAA.

“Athletics directors right now are kind of CEOs in that they’re just going to try to generate business so they can support the needs of the department,” she said, “because that money is not coming from the institutions.”

The impact from the House settlement is likely to ripple through universities, Epitropoulos said. “I’ve seen concern about … faculty unions striking because ‘You won’t give us $1,000 raise, but all of a sudden the budget for sports is going to go up.’”

But Epitropoulos said polls show that athletics are still important in recruiting not only athletes, but other students and faculty. “Even faculty who might hate sports, many of them say, ‘Yeah, I like being around a university with a vibe that has all the swag around and the big game coming in this weekend, and all the alumni coming in.”

Student-athletes are “ambassadors for all that we do,” Vélez Martinez said. “They’re not only ambassadors for athletics, but they’re ambassadors for Pitt, and that is important. So I want to be able to preserve that.”

Susan Jones is editor of the University Times. Reach her at suejones@pitt.edu or 724-244-4042.

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