Cynic’s guide to House settlement: Likely illegal and guarantees cheating and a permanent oligarchy

House is finally here.

I shan’t bore you with prefatory material. Let’s look at the contours of the settlement and talk about this in normal, consequential human language. No one wants to be lectured at or bombed with legalese (If you’re kinky though, I do charge extra for that. Hit me up with a DM.)

So have a morning beer and dive in.

What House does retrospectively:

Recall, this lawsuit was fired off by someone whose glory days were well behind him…and as a swimmer would have never been rolling in sweet booster cash anyway. Nevertheless, for all athletes that played before 2021, they shall receive a pro rata impact share from a one-time, lump sum $2.75bn payout.

Most of these payouts will be small given the size of the class (390,000). However, some former football and basketball players at major programs will be at least in the five-digit range (perhaps more, in exceptional cases).

Sure, that sounds great for guys like Grant House or the backup coxswain on the rowing team. Who doesn’t like a few extra grand in the Christmas stocking? But those who will make the lion’s share of the big money already do not require it — the class action attorneys and those stars who were (and/or still are) being compensated handsomely. (Fun fact, the class action attorneys are pocketing about $600m from just from this portion).

But does Tua really need another $100,000? Didn’t Reggie Bush famously get a beach house? Think Zion Williamson was playing for the sheer love of the game? (Snacks. He was playing for the love of snacks.)

People who opted out of the settlement are free to try and file a lawsuit later, but at least as concerns the NCAA, this portion is all-but a done deal.

For those who joined the class and objected, they’re done: res judicata bars subsequent claims. They were actual litigants. They are bound as much as the schools. You don’t get two bites at the apple.

For those who opted out of the class (and this was mainly some women and old-timers), they face a steep road in any event.

First is the burden of collateral estoppel: “They had notice, a forum, and motivation to litigate this exact issue and chose not to do so.” Courts tend not to like to use this nuclear option against people who weren’t part of a lawsuit…except in class action cases. Like this one. “It was your own fault you chose not to obtain relief.”

There will be also evidentiary issues in trying to prove market value from eras past with no clear payouts to schools on the record. And such sums would be tiny even if they could prove them, as they are not indexed to inflation and do not have prejudgment interest (Seen that first AFCA contract back in the 70s? It was $600,000). So, no, this really was the geezers’ best shot at a payday.

And, finally, Wilken dismissed the Title IX claims almost out of hand by saying there was no inherent right to equalized payouts across the board, just an opportunity at the revenue sharing formula. So, Livvy Dunne gets a share of LSU gymnastics money, Paul Skenes gets a share of LSU baseball money…and those are worth about squat.

But Zach Mettenberg will get enough to treat his lingering concussions from 2013.

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What House does going forward

This is the area where House will have an immediate, relevant impact. It’s also the area of the least controversy (for now), but one that creates a permanent superstrata of the very wealthiest and then everyone else.

The settlement establishes revenue sharing, first of all: Up to $20.5m the first year, with the potential to rise to $33m by 2033. For football, that number is estimated to be between 13 and $16 million this year alone.

This will be the case for about half of the country’s schools (in particular major D1 programs); they have no choice in whether to accept this: the SEC, Big 10, Sun Belt etc. were all named defendants. They’re bound by the agreement.

You can see now why the midmajors were very upset about this formula. They feel they are being somewhat punished for the excesses and profiteering of the power conference programs; they are also going to be the ones that face the most budgetary constraints in putting programs on the chopping block. They have a good argument too, and their culling has sadly already begun. (I did try to warn you almost a decade ago that the era of pay for play would reward those who could already most afford it.)

But what about schools that were not named defendants, and that opted out of the process? Well, they have two options.

First, these schools can adopt the terms of House. But almost no small program is going give up about 10% of their revenue. Remember, at most schools, athletics are an adjunct to the university, are subsidized by the university, and do not turn a profit. It’s mainly the big schools — your Alabamas and Ohio States — who forgot that universities run athletic departments, not vice versa.

The second option the opt-out schools can take is to make direct payments to their players for cost of attendance, scholarships, or otherwise compensate them according their market value. Given that most FCS and D2 programs did not and do not plan to opt into House, this will be the overwhelming case for them.

But that also means sums paid out are going to be nominal, comparatively speaking. When was the last time you saw a North Dakota State — South Dakota football game (Go Yotes)? Likely in the playoffs. So you can expect to see tons of FCS players trying to jump into FBS programs and that far sweeter pie of revenue sharing.

And with so many fingers (new and old) reaching to take scoops out of a dollar-limited pie, you have to have a way to moderate the number of grubby hands the university will be responsible for compensating.

Well, Judge Claudia Wilken just washed her hands of the whole thing — she permitted grandfathering of existing roster caps, provided that you do not cut current players. And these rosters can be fully funded as well.

Wanna sign 105 guys, and pay the backup punter as much as a starting quarterback in the MAC? Knock yourself out.

This means that schools with more resources are always going to be able to retain more high-end players as a result, and stockpile talent to shelve. See the issue here? This is functionally the same problem we had in the 60s and 70s, when teams like Alabama and Texas would sign everyone under the sun just to keep them from an opponent.

But now, there’s no incentive for that back up punter to try and transfer — even less to enroll at a marginal program. Not when he’s getting paid more money to sit on the bench at Michigan. Why would you want to go and kick in front of 317 people at Ball State, pay your own way, and miss out on some Big Ten titles?

The claimants did agree to overall roster sizes, but not the funding of them. Schools with a ton of cash can and will be signing players with no intention of playing them. They’re “just in case” depth. And it is a dagger pointed straight at the heart of midmajor programs and FCS schools.

Such is the inherent paradox that arose from a woman who was entirely out of her depth for a decade, and surprisingly never got more competent across three lawsuits: putting her thumb on the scale to create an equitable outcome, she has instead guaran-damn-teed the most top-heavy oligarchy we will have ever seen. It creates fewer opportunities for future players. The gap between the haves and have-nots will grow even more vast.

And such changes will be permanent.

Hoorah?

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Pay for play / NIL “clearinghouses” — the litigation and corruption magnet

This is where the lawsuits are almost certainly going to pop up.

Ohio State, Texas, Georgia, Tennessee, and Oregon football all spent in excess of $20 million this past season. All five made the playoffs. And the school that shelled out the most to WTWFT did so (great lesson!) Surely, these programs are not going to take a 40% salary hit as they field future teams, right?

LOL. Not a chance.

Remember, House only provides a limited remedy against schools. Players still have other options for compensation. They are free, as has been the case since 2021, to seek actual NIL deals from collectives etc.

This, unfortunately, has been where the vast majority of cheating has occurred, and where litigation has arisen against efforts to prevent it. And there have been few programs quite as litigious as Tennessee, manipulating one particular judge in the Eastern District of Knoxville into dismantling the whole process every time the NCAA tries to curb the filthy sham. (It is to our eternal shame that he is a University of Alabama alum).

House seeks to curb that lawlessness by imposing the creation of a clearinghouse to which all NIL deals must be submitted. These clearinghouses will determine fair market value of players and deals, evaluate the fairness of proposed payouts, and approve (or reject) them. The obvious reason is to avoid things like Tennessee billionaire boosters paying $8 million to a high school senior who has not played a snap under center, or Lamborghini of Austin handing out the keys to $300,000 supercars to an alleged walk-on 5-star WR.

You can also see the problems immediately — how to determine that value, and is any of this even legal to begin with? Well, crack your knuckles and settle in, I can almost guarantee you complaints are being drafted across the country and will hit courthouses on Monday morning at 8 o’clock.

(Bet you $5 we get the first ones coming out of Knoxville, Austin, Miami, and/or Columbus. Any takers?)

And you know what? For once, they would be on the right end of this. This entire scheme is likely illegal as hell. You don’t need a fancy law degree from Twitter University to see that; if something smells wrong, it’s probably already against the law…for a good reason.

You can also easily foresee another problem too: that it will just drive spending underground, into a market that is wholly off the books. More Cam Newton, less Nico Iamaleava.

The pay-for-play genie is out of the bottle. The schools may be on the hook for a set portion of revenue, but don’t think for one second that the market is going to be shrink.

The whole thing will just get dirtier, as schools compete openly to tout their revenue sharing; on the books, with their collectives and NIL; and then one vast, giant market of payments off the books and outside of either system.

Hey, what’s the NCAA going to do to stop it, even if the clearinghouse concept is approved? You know for a fact that the first school that gets busted is going to be beating down the doors of the local courthouse… And again, that will almost certainly be Tennessee.

And in a willing gray market, prospective players are not going to accept a salary cut, not when they can get their payday underground with absolutely no fear of enforceable repercussions.

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Summa

So, does House actually change anything? It does to the extent that past players are out of the way now (though I would bet they almost certainly start trying to sue networks for damages from broadcasts.)

It also makes universities directly liable for revenue sharing, and players the recipients of direct payments from them. That is a first.

But does it do anything to curb the lawlessness? The hellscape that we have been trapped in for five years? It tries, but it will not succeed. I’m not even certain the clearinghouse is legal myself.

There is a way to remedy that, but it will only come with congressional action: in the absence of an antitrust exemption, players must now be made full employees, subject to collective bargaining under the NLRA, contractual rights and remedies with teeth for both parties, and genuine enforcement powers (including subpoenas) handed out to the NCAA.

So, I wouldn’t necessarily trust the breathless pundits when they proclaim “this is a new era!” Players are not going to want to take vast pay cuts — nor will they. Dirty boosters are not going to let Rival U outbid them. And even dirtier universities are going to keep employing the legal system to enable cheating. Prepare for a three-prong influx of one hell of a lot of dirty money.

At best, this settlement is getting out the kitchen ladder and mounting the bottom step. You’re not even close to reaching that blender buried in the weird cabinet above the refrigerator…you’re just jamming your fingers into a dark crevice and hoping for the best.

That may work on prom night, but it doesn’t fly with billion dollar ventures.