‘Go back to the drawing board’ – House-NCAA deal in jeopardy after judge criticizes agreement

The NCAA’s landmark settlement in the House, Hubbard and Carter antitrust cases is on hold and likely to stall.

In a two-hour virtual hearing Thursday, a judge ordered the parties to “go back to the drawing board” regarding language in the agreement that limits athlete compensation from third parties, including boosters and booster-led collectives.

U.S. District Court Judge Claudia Wilken of the Northern District of California questioned a portion of the agreement that specifically prohibits school sponsors from compensating athletes through sponsorship deals — a clause in the document that the judge said would be difficult to enforce and could reduce the current payments athletes receive.

Attorneys for the plaintiffs in the case, Jeff Kessler and Steve Berman, and the defendants, the NCAA and the power leagues, will now try to reach an agreement on changing the text — something the NCAA and the power leagues appear reluctant to do. They are expected to report back in three weeks.

The current text is a “central element” of the agreement, Rakesh Kilaru, the NCAA’s outside counsel, told the judge during Thursday’s hearing. “Without it, I’m not sure there’s going to be an agreement to submit.”

Relying on the judge’s comments, Kilaru later said: “We need to discuss whether we have an agreement.”

For some in the college sports world, the result was highly anticipated. For others, it was a stunning result that could doom the deal.

One conference school president said: “This is absolutely insane. There is no reason to compromise under these circumstances. Let’s go to trial and take our chances on appeal.”

The issue — the ban on third-party booster payments — sparked a more than 30-minute discussion between the judge, NCAA attorney Kilaru and plaintiffs’ attorneys, primarily Kessler. The conversation centered on what is one of the biggest questions surrounding the settlement: How will the NCAA and major leagues prohibit and then control third-party payments to athletes?

Such payments are currently taking place as sponsors and collectives run by them hand out millions of dollars in salary-like payments to retain and recruit athletes, many disguised as commercial and endorsement deals. The deal would reduce or potentially eliminate those payments, instead allowing schools to pay their athletes directly under a salary cap system.

However, Wilken suggested that such a move could limit the salaries athletes currently receive — some of them “significant sums,” she said — and expressed skepticism that the NCAA could, or should, enforce its policy prohibiting “pay to play.”

In one of the most shocking moments, Wilken appeared to acknowledge that she had entered the hearing with the understanding that the rules allowed…