The United States Department of Justice has raised concerns about the NCAA's proposed $2.8 billion settlement with current and former athletes that would pave the way for schools to pay student-athletes going forward.
In a filing made in a federal court in California, the DOJ expressed concerns that the NCAA's proposed cap on how much revenue schools can share with athletes, expected to top out at $20 million, would potentially act as an "artificial price cap" that would not reflect the free market. It urged the court to reject the proposed settlement.
"Not only does this enshrine, for ten years, an agreement among competitors to limit compensation, a facially anticompetitive restraint, but the NCAA may attempt to use the cap’s incorporation into a court-approved settlement as a shield against future antitrust actions seeking more complete injunctive relief," the DOJ said in its filing, which was lodged days before Donald Trump is sworn in as US president.
The DOJ’s statement of interest was made just a day after the US Department of Education’s Office for Civil Rights published a memo that stated NIL payments to college athletes would need to be shared proportionally between male and female athletes. The memo also said that future payments would be classified as "financial assistance."
The DOJ's filing was made just days before Donald Trump's inauguration and could change once his administration takes over office.
Meanwhile, plaintiff attorney Steve Berman told SportsPro that, “The landmark settlement reached on behalf of hundreds of thousands of student-athletes is consistent with antitrust law and will create a new era of college sports that will bring the permissible benefits to student-athletes to nearly 50 per cent of athletic revenues.
“Plaintiffs look forward to advancing the agreed-upon settlement through the court process to usher in a more equitable, sustainable future for college sports. The court gave preliminary approval after objections nearly identical to the DOJ. Where has the DOJ been during the last 20 years while we have been fighting this battle — nowhere. And now they wish to block what was zero revenue sharing that will be tens of billions — shame on them.”
