The U.S. Justice Department raised concerns on Friday about the fairness of a $2.8 billion settlement between the National Collegiate Athletic Association (NCAA) and student-athletes. The department suggested that the settlement may not fully compensate athletes.
In a filing with the federal court in Oakland, California, the Biden administration questioned whether the deal went far enough to benefit student-athletes. The NCAA has been involved in long-running class-action litigation with students over compensation issues.
The settlement, which still requires court approval, could become one of the largest recoveries in a class action case. It would allow NCAA member schools to make direct payments to athletes for the first time. Along with the $2.8 billion settlement fund, academic institutions are expected to pay an additional $20 billion over the next decade under the agreement.
However, Justice Department officials expressed concerns about a provision in the settlement that caps the amount of money schools can pay athletes. They argued that the cap may limit free market competition. The department urged the court to either reject the settlement or clarify that the cap does not affect future lawsuits.
In response, the NCAA defended the settlement, stating that it is consistent with antitrust law and will bring positive changes to college sports. The Justice Department is not a party in the lawsuit and did not provide immediate comments.
Steve Berman, a lead attorney for the plaintiffs, supported the settlement, emphasizing that rejecting it would prevent billions of dollars from reaching student-athletes.
The final approval of the settlement is set to be decided by U.S. District Judge Claudia Wilken in a hearing scheduled for April. The case is titled In re College Athlete NIL Litigation, U.S. District Court, Northern District of California, No. 4:20-cv-03919-CW.
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