Olivia Dunne's Objection: Examining the NCAA NIL Settlement

The proposed House v. NCAA settlement, designed to resolve antitrust issues and pave the way for revenue sharing with student-athletes, has faced scrutiny from various corners. Among the voices raising concerns is LSU gymnast Olivia Dunne, a prominent figure in the Name, Image, and Likeness (NIL) landscape. Dunne has formally objected to the settlement, citing "major deficiencies with the structure" and highlighting the lack of input from student-athletes on crucial aspects of the agreement. This article delves into Dunne's objections, the broader context of the House v. NCAA settlement, and the potential ramifications for college athletics.

Dunne's Concerns: Transparency and Valuation

Dunne's objection, filed ahead of the deadline, zeroes in on several key areas. A central point of contention is the lack of transparency in how lost NIL opportunities are calculated and whether a consistent formula is applied across all sports and athletes. Dunne's filing states, "There is a lack of transparency to how the calculations being made for the estimate of lost NIL opportunities and if the same formula is being applied to all athletes across every sport." She argues that athletes are making decisions without accurate information, as schools lack comprehensive records of NIL valuations for all student-athletes.

Dunne, whose brand is valued at over $4 million, emphasizes the need for individual representation and a clear understanding of how damages are calculated specifically for each athlete. "If I were to hire a law firm to represent me individually in this matter, I would want to know how the valuation of damages was calculated specifically to me. This seems not to be the case," she asserts.

Another concern revolves around confidentiality issues related to back payments to student-athletes. Dunne's filing emphasizes that the submission of itemized NIL deals should be sealed, as forcing athletes to disclose deal information would violate non-disclosure, confidentiality, and trade secret covenants with third-party companies that partner with them. "Submissions of itemized NIL deals need to be sealed," the filing says. "Third-party companies that partner with athletes are not parties to this suit. Forcing athletes to disclose deal information would violate non-disclosure, confidentiality, and trade secret covenants."

During a hearing, Dunne testified against the settlement, arguing that the formula used to determine an athlete's NIL value was outdated and underestimated her worth. Describing herself as "a Division I athlete, a businesswoman, and I've been the highest-earning female athlete since the NIL rules changed," Dunne stated, "This settlement uses old logic to calculate modern value." She believes the settlement takes "a narrow snapshot of a still maturing market and freezes it, ignoring the trajectory we were on and the deals we lost and the future we could have had."

The House v. NCAA Settlement: A Landmark Agreement

The House v. NCAA case, which also includes three similar lawsuits bundled into one, aims to address the financial landscape of college athletics and the rights of student-athletes to benefit from their NIL. The settlement proposes offering $2.8 billion in damages to athletes who were unable to earn NIL money before the NCAA changed its rules in 2021.

A key component of the settlement is the potential for revenue sharing, allowing schools to pay athletes directly. The plan is expected to allow every school to share up to $20.5 million each with its athletes annually. This would involve schools paying 22% of their revenue from media rights, ticket sales, and sponsorships directly to college athletes for the use of NIL. NIL payments to athletes from outside sources would still be allowed.

In addition to revenue sharing, the settlement addresses roster and scholarship limits. The agreement calls for replacing scholarship limits with roster limits. For example, football teams would be capped at 105 players.

Concerns and Objections Beyond Dunne

Dunne is not alone in raising concerns about the settlement. At least 18 objections have been filed, highlighting various issues and potential ramifications.

One major concern revolves around the fairness of roster cuts and how they will be implemented. With the shift to roster limits, some athletes fear losing their roster spots and scholarships. Steven Molo, an attorney for a group of athletes objecting to the plan, argued that roster limits would unnecessarily restrict opportunities.

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Benjamin Burr-Kirven, a former football player, questioned the accuracy of NIL valuations, highlighting inconsistencies in how athletes are compensated.

Another point of contention is the management of athletes who will participate in the settlement in the coming years. Objectors have raised questions about how the settlement will apply to future athletes and whether their rights are adequately protected.

Judge Wilken's Perspective

District Judge Claudia Wilken, who is presiding over the case, has acknowledged the concerns raised by objectors. While she has already granted preliminary approval of the settlement, she has indicated a willingness to consider modifications.

Wilken has expressed particular concern about the potential impact of roster limits on athletes, suggesting the possibility of a grandfather clause to protect those who might lose their roster spots. She stated, "My idea there is to grandfather in a group of rostered people. There’s not that many. It’s not that expensive. It would save a lot of goodwill and angst and unhappiness from a lot of students and their parents, so why not just do it?"

Despite the concerns, Wilken has expressed optimism about the settlement, stating, "Basically I think it is a good settlement, don’t quote me, and I think it’s worth pursuing. I think some of these things could be fixed if people tried to fix them and that it would be worth their while to try to fix them." She has asked both sides to provide feedback on how some of the concerns might be addressed.

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The Future of College Athletics: A Landscape in Turmoil

The House v. NCAA settlement represents a significant step towards modernizing college sports and addressing the long-standing debate over NIL rights. However, the settlement also raises complex questions and potential challenges.

The implementation of revenue sharing and roster limits is likely to have a profound impact on the financial landscape of college athletics. Some worry about a growing financial divide between larger schools and smaller programs. Sam Ehrlich, a professor at Boise State University, suggests that some programs may decide that trying to compete isn't worth the expense.

The settlement also aims to create a clearinghouse to ensure that NIL deals are pegged at fair market value. This is intended to prevent "pay for play" deals, but critics argue that the entire new structure is simply NIL masquerading as that.

The NCAA continues to seek limited antitrust protections from Congress to stave off even more legal challenges. The organization's legislative push has primarily been focused on creating a more uniform system for athlete compensation and seeking an anti-trust exemptions.

Broader Implications and Lingering Questions

The House settlement has far-reaching implications for the future of college athletics, touching upon issues of gender equity, state laws, and the very definition of amateurism. Several key areas warrant closer examination:

Title IX Concerns

The settlement's potential impact on Title IX compliance is a significant concern. With men likely to receive substantially more money than women in both back damages and ongoing revenue sharing payments, questions arise about whether the settlement perpetuates sex-based discrimination.

For instance, the University of Georgia's proposed revenue sharing plan allocates a disproportionate amount of funds to football and men's basketball, raising concerns about equitable distribution across all sports. As of the date of this article, eight athletes have already signed onto a motion to appeal the settlement, halting payments but not revenue sharing. Four more female athletes are currently appealing the lawsuit, with the lead attorney arguing that the settlement “allocates $2.4 billion to men and only $102 million to women” and thus violates Title IX.

State Law Conflicts

Some objectors argue that the settlement's terms contradict state laws governing student-athlete compensation and that the settlement lacks the power to override these state laws. While Judge Wilken overruled these objections, the potential for conflict between state and federal regulations remains a point of contention.

The Role of NIL Collectives

The settlement is likely to diminish the prominence of NIL collectives, which have played a significant role in facilitating NIL deals for student-athletes. With the introduction of a neutral third-party review of NIL deals, collectives may no longer be able to simply pool funds from donors to distribute to athletes. Instead, NIL deals will need to demonstrate a valid business purpose and meet the standards set by the new NIL clearinghouse.

The Prospect of College Athlete Employment

The House settlement does not address the issue of college athlete employment and collective bargaining. However, the new system of direct payments may fuel the momentum for these concepts. Many critics believe that some form of collective bargaining would provide a more permanent solution than leaving schools and conferences to interpret the settlement.

The Complexities of NIL Valuation

One of the most challenging aspects of the House settlement is determining the fair market value of an athlete's NIL. The settlement creates a third-party clearinghouse, operated by Deloitte, to assess NIL deals worth $600 or more. However, the criteria for determining fair market value remain unclear, and the clearinghouse's decisions are likely to be a source of conflict.

Deloitte reportedly shared at a gathering at the ACC spring meetings that it would have denied 70% of past deals from NIL collectives while 90% of past deals from public companies would have been approved. This suggests that the clearinghouse will scrutinize deals from NIL collectives more closely than those from established businesses.

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