By Mike Scarcella
(Reuters) – The U.S. Department of Justice on Friday questioned the fairness of a $2.8 billion private settlement with the National Collegiate Athletic Association, suggesting it may not be enough to compensate student-athletes.
The Biden administration expressed its views in a lawsuit in federal court in Oakland, California, where the NCAA has been mired in class-action lawsuits with students for years.
The settlement, which requires court approval, would be among the largest recoveries ever in a class action and allows NCAA member schools to make payments directly to student-athletes for the first time.
In addition to the $2.8 billion settlement fund, academic institutions are expected to pay about $20 billion over the next decade under the terms of the deal.
Justice Department antitrust officials said in their filing that they were concerned about the 10-year settlement provision that places a cap on the money available to schools to pay athletes.
“Although the proposed settlement allows for some relief, it still serves as an artificial ceiling on the price of what free market competition might produce,” the filing said.
She urged the court to reject the settlement or require language clarifying that the cap does not prevent or apply to potential future lawsuits.
The NCAA and the Department of Justice did not immediately respond to requests for comment. The Ministry of Justice is not a party to the lawsuit. The NCAA denied any wrongdoing in approving the settlement.
In a statement, the plaintiffs' lead attorney, Steve Berman, defended the settlement and said its terms and conditions were clear.
Not approving the deal “would waste billions of dollars allocated to student-athletes,” Berman said.
U.S. District Judge Claudia Wilken is scheduled to consider final approval of the settlement at a hearing in April.
The case is College Athlete NIL Litigation, U.S. District Court, Northern District of California, No. 4:20-cv-03919-CW.
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