By Ethan E. Litwin, of Shinder Cantor Lerner LLP
Last year’s House settlement resolved the latest in a line of antitrust cases that have steadily dismantled the NCAA’s efforts to restrict athlete compensation. Beginning with its landmark opinion in O’Bannon v. NCAA, the Ninth Circuit confirmed what should have already been obvious: the antitrust laws apply to the NCAA’s rules governing compensation of athletes. Following that ruling, in NCAA v. Alston, a unanimous Supreme Court applied ordinary rule of reason scrutiny to those compensation rules, rejecting the claim that amateurism places them beyond the reach of the Sherman Act. The House settlement subsequently resolved three consolidated actions challenging the NCAA’s rules post-Alston.
The settlement has two parts. First, the settlement provides for a damages fund of $2.6 billion plus certain related amounts. Second, the settlement includes an Injunctive Relief Settlement (IRS) which effectively rewrites the NCAA rules governing how Division I schools may pay their athletes. At the center of the IRS is the “Pool,” which caps the amount that each school may pay its athletes, above existing scholarships and benefits, at an annual amount equal to 22% of the average “Shared Revenue” generated by the defendant conferences’ members plus Notre Dame.[1] For 2025–26 that figure is approximately $20.5 million per school.[2] Participation is voluntary for member schools, but once a school opts into the settlement, the hard cap on revenue sharing applies, along with other terms of the settlement that provide for roster limits, reporting, and enforcement obligations.[3]
The House settlement thus significantly rewrote the mechanism for licensing athletes’ names, images and likenesses (NIL). Before 2021, NCAA rules had barred athletes from earning any money for licensing NILs. But, post-Alston and a wave of state NIL statutes, the NCAA suspended that prohibition, and booster-funded collectives quickly formed to pay athletes what functionally amounted to salaries. Under the settlement, payments a school makes to its own athletes for NIL count against the Pool, like any other direct benefit, but payments from genuinely independent third parties do not.
Those lines are not always clear, especially when such payments are made by boosters-driven collectives that are associated with a particular school, defined as “Associated Entities or Individuals” in the settlement. Such payments are permitted only if they serve a valid business purpose at rates comparable to arms’ length deals. Thus, because a school’s own payments count against the Pool while independent third-party payments do not, collective payments routed through a genuinely independent third party fall outside the Pool.[4] Conversely, if a school absorbs its collective into the athletic department, the same dollars that were once uncapped become capped institutional spending under the settlement.
The Athletes Strike Back
Before the House settlement was approved, Talanoa Ili had held a multi-year offer from the House of Victory collective, the booster organization associated with the University of Southern California. After the Court approved the settlement, Ili’s offer was rescinded. Elsewhere, Charlie Mirer had been a scholarship quarterback at Stanford who received NIL payments from the Lifetime Cardinal collective in 2023 and 2024; following the settlement, those payments ceased. Ili and Mirer (Plaintiffs) sued the NCAA, the four Power Four conferences, the College Sports Commission, and the executives who lead those organizations, for conspiring with each other in violation of the antitrust laws. Specifically, Ili and Mirer seek to represent classes of Division I football and men’s basketball players on full scholarships at schools in the seventeen states whose NIL statutes forbid the restrictions that they challenge (the NIL Rights States).
According to the Plaintiffs, since the conferences (and their member schools) compete with each other to sign athletes, their agreement to enforce a cap on athlete compensation in states whose laws prohibit such caps (NIL Rights States) is nothing more than an illegal horizontal agreement among competitors. Defendants appear to recognize this, as the NCAA and the conferences have asked Congress to legislate an antitrust exemption for college sports and to expressly preempt conflicting state laws regarding athlete compensation. That lobbying effort, the Plaintiffs allege, would be superfluous if the settlement already provided such immunity.
Plaintiffs’ claims carefully avoid asking the court to undo the House settlement; instead, they challenge the enforcement of the settlement’s revenue sharing framework in the NIL Rights States, i.e., the Pool, which limits what a school may pay its athletes directly, and the restrictions on NIL payments from schools’ associated boosters and collectives. As Plaintiffs allege, the settlement permits, but does not require, a school to adopt the Pool and, importantly the House Court declined to find that the settlement preempts state law.[5] Plaintiffs seek treble damages under federal and state law, as well as injunctive relief prohibiting defendants from enforcing, in the NIL Rights States, compensation restrictions that exceed what the settlement authorized or that otherwise violate state NIL law. They further ask the Court to require a process for setting athlete compensation that complies with state law and that gives the athletes a voice in the terms and conditions of their compensation.
Likely Defenses
Defendants will likely plead a range of procedural and merits defenses in this litigation. First, Defendants may plead that Plaintiffs’ claims are barred by the House settlement release. There appear to be two significant hurdles for Defendants to overcome in this regard. From a damages perspective, the House class released only those claims that could have been raised before final approval. Regarding the injunctive relief claims, the House settlement release purports to bind not only members of the House class but also so-called “Incoming Injunctive Relief Settlement Class Members.” It is far from clear that athletes who were not part of the House class were adequately represented by counsel and thus may be barred from bringing injunctive relief claims during the settlement agreement’s 10-year term.
Second, Defendants may plead that this new lawsuit is as an improper collateral attack on the Court’s approval of the House settlement. But while court approval binds the parties to their bargain, it does not render the parties’ conduct under that settlement immune from the antitrust laws. Moreover, no court has found that the Pool is lawful.[6]
Third, Defendants may plead that Plaintiffs’ claims must be arbitrated. But while the House settlement provides that athletes who challenge discipline imposed under the enforcement rules must arbitrate their claims, that limited arbitration clause would not appear to require Plaintiffs to arbitrate their class antitrust claims regarding the implementation of the Pool in NIL Rights States.
Fourth, Defendants will likely challenge Plaintiffs’ alleged relevant geographic market (comprised of the seventeen NIL Rights States). In doing so, Defendants will likely argue that an antitrust market turns on where buyers and sellers actually compete, and that schools compete for athletes in a range of geographic markets, none of which are actually captured by Plaintiffs’ proffered definition. This defense may have some legs, as it often does in antitrust litigation, but will more likely result in correction through amendment rather than a final dismissal on the merits.
What’s Next?
The NCAA has been litigating against its current and former athletes for nearly a generation. While athletes have learned much from this process about their rights, the NCAA continues to ignore the obvious: Labor is labor, whether it is performed by a so-called “professional” or by a “student.” No one should work for free, and the antitrust laws forbid competing employers from agreeing among themselves on what to pay their employees.
The NCAA, however, continues to believe in its own exceptionalism, arguing that athletes’ technical status as students exempts both the athletes and the schools from the rules that bind every other employer. But, as Justice Kavanaugh wrote in Alston, the NCAA’s business model “would be flatly illegal in almost any other industry in America,” because “[p]rice-fixing labor is price-fixing labor,” and “[n]owhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate.”[7]
Compensation caps, player drafts, and restrictions on players’ ability to switch teams at-will are only made possible in sports leagues through collective bargaining and operation of the non-statutory labor exemption to the antitrust laws. As the Supreme Court held in Brown v. Pro Football, terms that are mandatory subjects of collective bargaining, agreed to through the collective bargaining process, are shielded from antitrust attack.[8] Absent an act of Congress, that exemption is the only lawful source of immunity for a horizontal restraint on compensation. The NCAA, however, wants the benefits of collective bargaining without the nuisance of allowing players to actually unionize and collectively bargain.
Here, the NCAA and the Power Four conferences have imposed a cap on athlete compensation through the class action device in lieu of collective bargaining. But a class action settlement is not a labor agreement and class counsel are not duly elected union representatives. Nothing in the House settlement triggers the non-statutory labor exemption, and without that exemption a cap set by competing buyers remains a horizontal restraint subject to the antitrust laws.
The NCAA’s refusal to allow athletes to unionize, while simultaneously seeking to impose restraints on athlete compensation and mobility, leaves the entire world of collegiate sports exposed to further antitrust litigation. Until Congress reverses its longstanding position on granting new antitrust immunities, or the NCAA and its members allow the athletes to bargain collectively, every agreement among competing schools and conferences to restrict what athletes are paid will be ample fodder for future lawsuits.
Ethan E. Litwin, a partner at Shinder Cantor Lerner LLP, has been litigating complex antitrust matters for more than 25 years. He currently serves as co-lead counsel for the plaintiff players in World Association of Icehockey Players Unions v. National Hockey League, and was co-lead counsel in the Writers Guild of America’s successful antitrust litigation against the major Hollywood talent agencies. Chambers USA and Lawdragon recognize him as one of the country’s leading antitrust practitioners and litigators.
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IRS Art. 3, § 1(c)–(e). “Shared Revenue” includes, for example, revenues generated through the sale of media rights, ticket, and sponsorships. Certain benefits count against the Pool and thereby reduce what remains for direct payments, including Alston academic awards and the value of new scholarships created by the shift to roster limits, each subject to its own annual sub-cap. Other benefits, including pre-existing grant-in-aid, sit outside the Pool. IRS Art. 3, § 3. ↑
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IRS Art. 3, § 1(f)–(g). Average Shared Revenue is recalculated every three years; in the second and third years of each period it increases by 4% over the prior year. Two narrow exceptions appear in § 1(h): a media-rights escalator greater than 4%, and Class Counsel’s right, on up to two occasions, to accelerate recalculation. Id. § 1(h)(i)–(ii). ↑
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There is some degree of variability among schools regarding the mix of benefits inside the Pool, but such variation does not affect the hard cap on revenue sharing. IRS Art. 3, § 2. ↑
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IRS Art. 3, § 3(c). Moreover, if a school contracts with an athlete to act as the athlete’s marketing agent, or sublicenses rights it secured by direct contract, “third-party payments procured for the student-athlete shall not be counted against the Pool,” “nor will any other third-party payments made directly to a student-athlete be counted against the Pool.” ↑
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IRS Art. 3, § 2 (each school “shall unilaterally decide/determine whether and how much” to provide, up to the Pool amount); In re Coll. Athlete NIL Litig., 803 F. Supp. 3d 959, 1010 (N.D. Cal. 2025) (“[T]he SA does not require that this Court find that the SA preempts state laws … nor is the Court making such a finding.”). ↑
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Indeed, Class Counsel agreed to support legislation providing “antitrust immunity for conduct undertaken by Defendants in compliance with … this Injunctive Relief Settlement” and “preemption of any state law … in conflict with” it. IRS Art. 7, § 1. ↑
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NCAA v. Alston, 594 U.S. 69, 109–12 (2021) (Kavanaugh, J., concurring). ↑
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Brown v. Pro Football, Inc., 518 U.S. 231, 250, 260 (1996) (exemption applied to conduct that “grew out of, and was directly related to, the lawful operation of the bargaining process,” “involved a matter that the parties were required to negotiate collectively,” and “concerned only the parties to the collective-bargaining relationship”). ↑
