By Mike Scarcella
(Reuters) – The U.S. Justice Department on Friday questioned the fairness of a private $2.8 billion settlement with the National Collegiate Athletic Association, suggesting it might not go far enough to compensate student athletes.
The Biden administration expressed its views in a filing in the federal court in Oakland, California, where the NCAA has been mired in class action litigation with students for years.
The settlement, which requires court approval, would be among the largest-ever recoveries 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 out some $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 a provision of the 10-year settlement that caps money available for schools to pay athletes.
The filing said, “while the proposed settlement allows for some relief, it still functions as an artificial price cap on what free market competition may otherwise yield.”
It urged the court to reject the settlement or require language that makes clear that the cap does not bar or apply to potential future lawsuits.
The NCAA and Justice Department did not immediately respond to requests for comment. The Justice Department is not a party in the lawsuit. The NCAA denied wrongdoing in agreeing to settle.
In a statement, a lead attorney for the plaintiffs, Steve Berman, defended the settlement and said its terms and conditions were clear.
Berman said failure to approve the deal “would scuttle billions of dollars going to student athletes.”
U.S. District Judge Claudia Wilken will weigh final approval of the settlement at a hearing in April.
The case is In re College Athlete NIL Litigation, U.S. District Court, Northern District of California, No. 4:20-cv-03919-CW.
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