Judge Wilken: Settlement Tossed if Roster Limits Aren't Gradually Implemented

BLOOMINGTON, Ind. – Since preliminary approval of the House settlement was given by U.S. District Judge Claudia Wilken in October, the affected NCAA schools have been proceeding as if the settlement was going to be rubber-stamped and the new rules it creates would be the lay of the land.

Wilken informed the NCAA and power conference defendants on Wednesday that preliminary approval signifies only a temporary stage. She signed off on an order on Wednesday approving most aspects of the proposed settlement, except for one significant detail.

Since the agreement isn’t fair and reasonable for many class members who lost their positions due to the swift enforcement of the settlement, Judge Wilken determined that the court couldn't endorse it as it stands.

On April 7th, during the House settlement proceeding, Wilken encountered opposition from individuals impacted by the case, notably regarding the consequences of roster limitations.

As per the agreement, restrictions on scholarships were swapped with limitations on team rosters for every sport.

However, many sports had previously operated as partial-scholarship sports. Few athletes outside football and basketball get full-ride scholarships. So some sports had large rosters, but comparatively small scholarship limits, as those scholarships were parceled out among several athletes. Roster limits would eliminate roster spots for many athletes.

Furthermore, players trying out for revenue-generating sports such as basketball and football faced restrictions that reduced the number of available positions on the teams.

Several athletes affected by these cuts raised objections during the April 7 hearing. Wilken proposed that the affected athletes could be “grandfathered in,” with roster limits phased in so these athletes wouldn’t lose their spots.

Last week, the NCAA submitted an additional legal document stating they would not enforce gradual caps on team sizes, mentioning "disruption" as the reason.

On Wednesday, Wilken did not suggest phasing in roster limits; instead, she deemed it essential for approving the House settlement itself.

Her ruling stated the following:

“Objectors have shown that the immediate implementation of the roster limits provisions of the settlement agreement has resulted or will result in harm to a significant number of members of the Injunctive Relief Settlement Class (1) who are on a roster but will be removed from the roster because of the immediate implementation of he settlement agreement; and (2) who were on a roster but were removed from the roster in the last several months because of the premature implementation of the settlement agreement,” Wilkens wrote.

“Those class members will be harmed because their roster spot will be or has been taken away as a result of the immediate implementation of the settlement agreement, yet they will be deemed to have released their injunctive and declaratory relief claims as part of the settlement agreement,” the ruling continued.

“As members of the Injunctive Relief Settlement Class, they do not have the right to opt out. That outcome is not fair to those class members, and that remains true even if other class members may benefit from the Injunctive Relief Settlement and a large number of members of the Damages Settlement Classes have filed claims under the settlement agreement,” Wilken continued.

Wilken went on to say that the court raised concerns about this problem on April 7, the proposed grandfathering of roster spots. After the NCAA and defendants filed a brief refusing to agree, Wilken ruled that the settlement cannot be approved in its current form.

Nevertheless, Wilken provided a pathway for the NCAA and power conference schools to gain approval. Should they consent to amending the settlement to introduce staggered roster limitations, she is expected to approve it.

She gave the parties 14 days to present modifications to the court.

Wilken also admonished schools that began to implement the House settlement agreement before it was formally approved.

“The fact that the Court granted preliminary approval of the settlement should not have been interpreted as an indication that it was certain that the Court would grant final approval,” Wilken said. “One of the factors that courts must consider when determining whether to grant final approval of a settlement agreement is ‘the reaction of the class members’ to the agreement.”

Indiana is bound to the House settlement as a member of one of the power conferences that are co-defendants in the case with the NCAA.

The stakes are extremely high for the NCAA and the power conference schools.

If the House settlement is not approved, the original cases that were bound together by the settlement would go to trial. Most expect the NCAA would lose.

Should the NCAA and its institutions lose the House case, they could have faced a liability of $4 billion, which would be tripled under antitrust laws to approximately $12 billion. This financial blow would likely have severely undermined collegiate sports as we currently understand them.

The NCAA along with its member institutions opted for a $2.8 billion agreement to compensate ex-college athletes. This deal stipulates that 22% of the income from major conference schools should go towards revenue sharing. Additionally, it replaces scholarship maximums with team size restrictions. It’s anticipated that the limit on athletics department expenditures at each top-tier school might hover around $20 million to $21 million annually.

They similarly consented to establishing a clearinghouse that would authorize all NIL agreements exceeding $600 according to "market rate."

Universities throughout Division I have been preparing for the potential shifts brought about by the House legislation. With this legislation now uncertain, the consequences might be enormous.

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• INSTABILITY IS MOST FRUSTRATING ASPECT: The transfer portal should exist and NIL money doesn't bother me, but so many college athletes choose to make their experience transitory. The instability hurts college athletics. CLICK HERE.

• CRUCIAL MOMENTS FOR UNIVERSITY SPORTS: The House settlement along with other modifications has led to a transformative month for college sports. CLICK HERE.

This article was originally published on www.si.com/college/indiana as Judge Wilken: House Settlement Will Be Denied If Roster Limits Aren’t Phased In .