In a recent letter to NCAA membership, President Charlie Baker expressed disappointment in the preliminary approval hearing for a $2.78 billion antitrust settlement. The hearing did not go as planned, and now the association and major college conferences are working to address the judge’s concerns about certain aspects of the proposed deal.

Leaders in college sports view the settlement agreement as crucial to transforming the industry, mitigating the risk of litigation, and avoiding a potential financial disaster. However, the process hit a roadblock when U.S. District Judge Claudia Wilken declined to grant preliminary approval and requested the two parties to revisit the agreement and provide answers to her inquiries in three weeks.

One of the major points of contention was around a plan to regulate third-party name, image, and likeness payments to athletes from booster-funded collectives. Judge Wilken questioned the validity of restricting such payments, stating her concern about taking opportunities away from individuals.

Collectives, known as NIL collectives, have become a primary vehicle for college athletes to monetize their fame. The proposed agreement included a revenue-sharing plan to compensate for any limitations on athlete earnings. This plan aims to offer financial benefits to student-athletes and provide stability to colleges and universities that offer scholarships and other benefits to young athletes.

The negotiations also involved implementing a salary cap model similar to professional sports leagues to ensure competitive balance among schools. Concerns arose about the possibility of collectives circumventing this cap and giving certain schools an unfair advantage.

The proposed settlement includes rules to limit booster payments, ensure fair market value for NIL deals, and enforce transparency in athlete deals with collectives or boosters. The goal is to strike a balance between allowing athletes to benefit from their name, image, and likeness while preventing undue influence from boosters.

Despite the challenges, both parties remain optimistic about reaching an agreement. The settlement process will undergo further scrutiny and modifications to address the judge’s concerns and ensure a fair outcome for all stakeholders.

As the case progresses, the NCAA and college sports community must navigate the complexities of the proposed settlement to usher in a new era of athlete compensation and industry regulations.