Plaintiff attorneys have filed a brief with a California district court in the House settlement case, clarifying language that limits compensation from third-party entities to athletes under the new revenue-sharing model.
Attorneys made slight adjustments and offered more details on a concept in the settlement that US District Court Judge Claudia Wilken expressed concerns over during a hearing on Sept. 5. The most notable amendment is the removal of the term “booster” from the language, though a more narrow description of a booster remains in the settlement.
Boosters and booster-led collectives are at the center of the change as attorneys work to get the settlement approved — something that still may be days or weeks away.
Wilken found problematic language that required third-party entities, including boosters and booster-led collectives, to submit their endorsement deals with athletes through a newly created clearinghouse and enforcement arm. Those deals could be rejected based on fair market value standards. Rejected deals would then move to a court-overseen arbitration process.
While the amended filing removes the term “booster,” it remains, in essence, part of the settlement. Attorneys replaced the term with more specific terminology and parameters, including:
– Only deals involving a narrowed set of people closely affiliated with schools will be subject to the clearinghouse and enforcement process. For example, deals with commercial third parties, like shoe companies or apparel brands, are exempt from enforcement.
– Also exempt will be deals with individuals whose families have provided less than $50,000 in support to a particular institution.
– The brief clarifies that no deals will be prohibited under the settlement that are not already prohibited currently.
The amendment may pave the way for some school-affiliated boosters and collectives to survive, at least in a limited capacity. However, in all likelihood, those donating to collective efforts are likely to be considered a “set of people closely affiliated with schools,” which would require them to clear their NIL deals through the clearinghouse.
Wilken is expected to review the newly filed documents before either setting a new hearing date or ruling based on the brief.
While other slight changes were made to the settlement, the third-party and booster language is the most significant.
The settlement’s goal is to shift the payments to athletes from outside entities — such as boosters — to the schools themselves, permitting universities to all share the same amount of pool money with athletes on an annual basis. The pool’s cap — 22% of an average of power conference school revenues — will apply to all schools and will fluctuate based on built-in escalators and school revenue increases. Projections put the Year 1 cap at $20-23 million.
Under the current system, most power conference booster collectives distribute between $5-15 million annually to athletes. Several SEC football coaches told Yahoo Sports in July that, under the new revenue-share model, they anticipate distributing $12-17 million to their football rosters.
To accomplish the shift in these payments to athletes from the boosters to schools, power conference leaders plan to create a new enforcement entity with a clearinghouse for non-school payments.
At the Sept. 5 hearing, Wilken took exception to the NCAA and power leagues planning to maintain their rule against “pay-for-play,” a long-time amateurism policy that prohibits boosters and other outside parties from paying athletes to specifically play sports. During the hearing, she was left puzzled upon learning that the NCAA’s pay-for-play prohibition would remain despite the settlement permitting schools to directly share revenue with athletes.
She also expressed concern about how the NCAA and power conferences could enforce such a policy, questioning (1) the ambiguous definition of a booster, (2) the exact enforcement arm or entity for policing third-party deals and (3) the fact that a capped, school-led revenue-sharing model may mean some athletes who are now receiving uncapped booster money could see their pay decrease.
She told attorneys to “go back to the drawing board” to “fix” the language while keeping in mind “that taking things away from people doesn’t work well.”
