NCAA Tries to Block Class Certification in Lawsuit Over NIL, TV Money
Last Friday, attorneys for the NCAA and the Power Five conferences filed a 50-page brief opposing a motion for class certification in In Re College Athlete NIL Litigation (also called House v. NCAA), a federal antitrust lawsuit led by Arizona State swimmer Grant House, Oregon basketball player Sedona Prince and former Illinois football player Tymir Oliver. The suit asserts that players should be paid a percentage of TV contracts and that those who were denied NIL until 2021 are now owed compensation.
As detailed last fall, the players seek the creation of a class for all D1 athletes who competed or will compete from June 15, 2020 (when the complaint was filed), to the date of judgment in the case, which is currently scheduled for trial on Jan. 27, 2025. They seek additional classes for football and men’s basketball players, women’s basketball players and players in other sports starting in 2016.
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If California federal judge Claudia Wilken, who denied the NCAA’s motion to dismiss in 2021 and sided with Ed O’Bannon and Shawne Alston in their challenges to restrictions on college athlete compensation, agrees to the plaintiffs certification request, their case will morph from one brought by a few athletes to one on behalf of thousands. In the words of the NCAA and conferences, a certified class action could result in them and member colleges paying “billions of dollars” in damages.
But under Rule 23 of the Federal Rules of Procedure, a judge can only certify a class if there are common issues of fact and law. Those bringing the case must also have suffered injuries typical of others.
The brief undermines the notion that college athletes suing over NIL and broadcast NIL (BNIL) ought to be in the same class. It argues that college athletes must bring individual cases since there are “substantial differences” in players’ NIL values. Some players prior to 2021 might have earned millions of dollars in NIL. Others would have earned nothing. And still others would have received free pizzas, discounted clothing and similarly modest arrangements.
“NIL value,” the brief charges, “varies tremendously over time depending upon individual and team performance, market demand, and innumerable other factors … simply determining who is actually in the class would require individual inquiry.”
The brief also states that identifying who ought to be paid is “impossible.”
If college athletes in the power five conferences are “eligible to receive over $1 billion in NIL compensation,” the brief says that many of them “would choose to remain in school rather than pursue professional opportunities.” This presents a so-called “substation effects” problem since it would be “impossible to determine the identity of class members” when some would have, or would, stay in school and keep roster spots that would otherwise go to other players. The brief notes LSU’s Angel Reese and UConn’s Paige Bueckers saying they intend to stay in college longer given their high NIL earnings, and how the number of players entering the NFL draft early has dropped since NIL began in 2021, from 100 in 2022 to 82 in 2023.
Alleged damages for denial of BNIL are also questioned. The brief asks Wilken to consider the players’ contention that each of the five conferences would pay 10% of broadcast revenue to every scholarship football and basketball player on every conference team, with amounts varying by conference, year and sport. Men’s basketball players would receive the most, followed by football players and, in a distant third place, women’s basketball players.
To illustrate the math, an expert for the players purportedly calculated that in one conference (name redacted in the NCAA’s brief) a basketball player should have been paid $77,400 in BNIL in 2021, a football player $42,500 and a women’s basketball player $14,400. In another conference, the distribution would have been $55,000, $26,000 and $6,800. The disparities reflect different broadcasting contracts.
The brief contends the 10% figure is invented out of thin air and doesn’t comport to any known metric. In fact, the players’ expert witness who proposed the figure allegedly admitted under oath that “no one has ever tried to value BNIL [broadcast NIL] before” and “there is no separate value for BNIL in broadcast contracts.”
The 10% figure also doesn’t match how pro leagues and their players handle broadcast revenue. In the NBA, WNBA and NFL, players’ contracts contain provisions in which they accept that teams and leagues can use their NIL to promote games and accompanying broadcasts. Those contracts also do not “separate” salary for NIL from salary for performance.
The 10% figure further fails, the brief says, because “compensation is not uniform in labor markets—and especially not in sports.” The brief says it’s “nonsensical” that “a starting quarterback and third string lineman in the same conference would receive the same amount, while the most famous women’s basketball players would receive less than lesser-known backup football players.”
The brief also stresses that while teams in major pro leagues are impacted by salary caps and similar restraints, none makes “equal payments” to “each player on a team.” Players negotiate individual salaries of varying values; they do not “split equally” revenue among “any subset of players.”
The brief raises still other alleged flaws. It contends the lawsuit’s proposed remedy would trigger an inequitable disparity in pay—96% of the money would go to men and only 4% for women—and would cause conferences and schools to violate Title IX. The brief also says the proposed remedy would violate NIL statutes in “at least 15 states” since those statues “specifically prohibit an institution and/or a conference from providing compensation to a current and/or prospective student-athlete.” Further, the brief notes that there is no named plaintiff who played men’s basketball, so there is no suitable representative for those players.
Attorneys for the House, Prince and Oliver will have opportunities to respond. Expect them to underscore how different methods for payments to college athletes and pro athletes is both understandable and unavoidable. Although Johnson v. NCAA and NLRB action could spark metamorphic change, college athletes are not currently recognized as employees. This means, unlike pro athletes, they can’t negotiate employment contracts, can’t unionize and can’t bargain rules for wages and distribution of revenue. Litigation such as In Re College Athlete NIL Litigation is arguably their only vehicle to address core grievances.
The players might also assert that it’s incumbent on conferences and schools to figure out how to comply with Title IX and antitrust law. Businesses are expected to always comply with all laws, even if that requires structural change. That sentiment was recently expressed by three appellate judges in Johnson. The judges were unsympathetic to NCAA concerns that following Title IX would be difficult if they had to pay players a wage.
