South Dakota Attorney General's Settlement with NCAA: A Win for Smaller Schools and Women's Sports
South Dakota Attorney General Marty Jackley reached a settlement in the state’s lawsuit against the NCAA, a move celebrated as a victory for smaller Division I schools and women's sports programs. The settlement addresses concerns about the financial burden placed on these institutions due to the NCAA's proposed $2.8 billion settlement of federal class-action lawsuits, stemming from a Supreme Court ruling that deemed the NCAA’s prohibition on athlete compensation a violation of antitrust laws.
Background: The House Settlement and its Impact
The legal landscape shifted significantly following a Supreme Court ruling that the NCAA's restrictions on athlete compensation violated antitrust laws. This ruling paved the way for the proposed $2.8 billion agreement, known as the House settlement, intended to resolve several class-action lawsuits against the NCAA. These lawsuits sought back payment for athletes' participation in college athletics. A federal judge in California is currently reviewing the settlement for final approval.
The House settlement, while aiming to compensate athletes, posed a financial challenge for Division I schools, particularly those outside the Power Four conferences. South Dakota's complaint highlighted that non-Power 4 D-I schools were projected to bear approximately $1 billion of the settlement costs over the next decade through reduced NCAA revenue distributions. The state argued that this would unfairly burden schools like the University of South Dakota (USD) and South Dakota State University (SDSU), potentially costing them a combined $8 million-an amount deemed disproportionate to any NIL-related revenue or damages tied to their athletes.
Key Terms of the Settlement
Under the settlement, the NCAA will utilize a $55 million budget surplus to alleviate the financial strain on athletic conferences, reducing the amount they must contribute to the athlete compensation agreement. This surplus will reduce back damages for conferences like the Summit League by 33%, a savings that will be passed on to universities.
Jackley emphasized the importance of the settlement's assurances that the Women's Basketball Performance Fund would remain intact. This fund is designed to support women's sports programs, ensuring their continued growth and success. The settlement also secures South Dakota's position as a host for high-profile NCAA events, which generate significant economic benefits for the state. According to Jackley, the last tournament held in Sioux Falls for men and women’s basketball generated approximately $10 million for South Dakota.
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The NCAA will credit the South Dakota Attorney General for his efforts in giving small schools and conferences relief when it announces the DI Board of Directors’ decision to reduce the amount of revenue withheld from all Division I conferences needed to make the first of the ten annual payments to settle the House litigation. The NCAA President and select staff will meet in-person with the presidents of SDSU and USD, the Summit League, and other Sioux Falls leaders within the next twelve (12) months to discuss NCAA issues currently impacting State schools and opportunities to host future NCAA championships in the State.
Reactions and Implications
The settlement has garnered positive reactions from university leaders and athletic directors in South Dakota. USD Athletic Director Jon Schemmel expressed his appreciation for Attorney General Jackley's efforts, stating that it is incredibly reassuring to have someone stand up and fight on our behalf. SDSU President Barry Dunn echoed this sentiment, acknowledging the support from the Attorney General’s Office in seeking fair outcomes for the state and universities.
Jackley emphasized the importance of in-state partnerships in achieving this settlement. He highlighted the ability to collaborate with university presidents, the Board of Regents, and city leaders to address local concerns on a national platform.
With this settlement, the state is dropping its lawsuit. A hearing had been scheduled for Thursday in Brookings County Circuit Court.
The Broader Legal Landscape: Other Antitrust Challenges to the NCAA
The South Dakota settlement is occurring within a complex legal environment surrounding NCAA regulations and athlete compensation. Several other antitrust cases are challenging various NCAA rules, including restrictions on name, image, and likeness (NIL) compensation, "pay-for-play" prohibitions, and eligibility rules for transfer students.
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House v. NCAA
This case, which the proposed settlement addresses, is an antitrust challenge against the NCAA and "Power Five" Conferences (ACC, Big Ten, Big 12, SEC, and Pac-12). It includes claims that the NCAA's restrictions on athlete use of their NIL constitutes an unreasonable restraint of trade and that the NCAA, conferences, and member institutions have engaged in a group boycott by refusing to negotiate with athletes for compensation for the use of their NIL in game broadcasts.
The case involves multiple classes of athletes, including those who have competed on a Division I athletic team since June 15, 2020, and specific classes for football, men's basketball, and women's basketball players in Power Five conferences.
Following preliminary approval of the settlement, numerous objections were raised, particularly regarding the distribution of damages and the binding of future athletes. While the settlement received final approval in June 2025, appeals have been filed, including those alleging that the distribution of damages disproportionately favors football and men's basketball, potentially violating Title IX.
Other Related Cases
Several other cases are challenging various aspects of NCAA regulations:
- University of Cincinnati v. NCAA, Brantmeier v. NCAA, Coly v. NCAA, Ridley v. NCAA, Braham & Martinson v. NCAA: These cases involve challenges to the NCAA's "Five Year Rule," which limits an athlete's eligibility to five years, including time spent at junior colleges or NAIA institutions. The plaintiffs argue that the rule unfairly discriminates against athletes who began their careers at these institutions.
- Hubbard v. NCAA: This case challenges the NCAA's restrictions on "Alston Awards," academic achievement awards of up to $5,980 per academic year.
- Carter v. NCAA: This case broadly attacks NCAA prohibitions on "pay-for-play," arguing that athletes should have the right to negotiate direct compensation tied to their athletic performance.
- Jenkins v. NCAA: This case, filed by former Villanova basketball player Kris Jenkins, seeks damages for broadcast NIL use by the NCAA and Power Five conferences and a declaratory judgment against NCAA bylaws that restrict compensation for student-athletes.
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