Objections to NCAA Proposed Settlement Filed in Federal Court

Cal Poly University officials said they opted into the NCAA’s $2.78B NIL (name, image, and likeness) settlement and its terms, while comparable nonpower conference Division I institutions chose not to because of the resources required to comply, reported Law360. The four athletes who filed objections learned in March that the swimming and diving program was eliminated due to “financial consequences” of the settlement, said the Cal Poly officials. The athletes said the school sunk almost $7 million into the football program, but dropped a program with an estimated $250,000 budget that included funds raised by the team members. The officials also turned down some $9 million in pledges and gifts made after the sport was eliminated, which the athletes claimed would have saved their swimming and diving program.

The $2.78 billion Settlement

The $2.78 billion agreement’s intention was to resolve multiple antitrust lawsuits and establish a new framework for compensating college athletes for their NIL. While this is a sweet deal for football players getting paid, “it bulldozes Olympic sports, nukes scholarships, and maybe undermines gender equity,” reported SwimSwam. One attorney for the athletes said that the settlement “seeks to unravel more than fifty years of progress for women in education and sports.”

According to the NCAA, the ”House v. NCAA” deal:

• Pays about $2.78 billion over 10 years to compensate Division I athletes for past restrictions on NIL money and other benefits, mostly covering athletes who competed from 2016–2024.
• Lets schools start directly paying athletes for NIL going forward, up to roughly 22% of certain athletics revenues (media, tickets, sponsorship). That could mean billions to athletes each year.
• Replaces scholarship limits with “roster limits,” basically capping how many athletes can be on each team.

The NCAA, however, argued that the athletes objecting to the settlement should blame the school for dropping the swimming and diving program. According to Law360, the NCAA said the settlement and its injunctive relief terms do not dictate how institutions spend the funds allocated, and that it does not prevent schools from eliminating sports or roster spots to meet their financial needs. “While it is certainly unfortunate that some athletes have lost athletic opportunities because their school decided to eliminate sports, reduce rosters, or shift financial resources, the Injunctive Relief Settlement did not direct any of those things,” said the athlete class representatives.

Another point: NCAA lawyers said that most objections aren’t really antitrust issues, which is the main complaint.

According to SwimSwam, the swimmers and divers said to Judge Wilken that:

1. The settlement is unfair to “Olympic” / non-revenue sports.
   • They argue the roster caps and new payment structure push schools to protect football and men’s basketball while cutting lower-cost programs like swimming and diving — programs that historically feed U.S. Olympic pipelines.
2. Athletes on cut teams aren’t protected.
   • The proposed deal tries to protect scholarships/roster spots for athletes who individually get cut to make room for roster limits.
   • But if a school just kills the entire team (what Cal Poly did), those athletes fall through a loophole and lose their roster spot, season, and aid. And that’s absurd.
3. Possible Title IX problems.
   • Some of the Cal Poly athletes (including women divers) say wiping out a co-ed swim & dive program while continuing to heavily fund football raises gender equity concerns.
   • They point out Cal Poly spends about $6.9M a year on football versus about $250K on swimming & diving — and a good chunk of that $250K wasn’t even university money, it was money swimmers and families raised themselves.
   • Their position: this settlement structure, combined with how schools react to it, could worsen gender inequity instead of improving it.
4. They were actively recruited and promised scholarships.
   • At least one recruit says she lost her promised scholarship and team when Cal Poly axed the program “for budget reasons tied to the settlement.” She’s telling the judge this deal lets schools break commitments to incoming athletes, and gives those athletes basically no remedy.

The settlement still needs court approval. The final approval hearing is scheduled for April 7, 2025. The case is In re: College Athlete NIL Litigation, case number 4:20-cv-03919, in the U.S. District Court for the Northern District of California.