The first legal objection to the $2.8B NCAA antitrust settlement plan comes from Houston Christian

FILE - In this April 25, 2018, file photo, the NCAA headquarters is shown in Indianapolis. Houston Christian University's U.S. district court case might be just the beginning of the challenges the NCAA and the major conferences will face as they sort out how their schools will be able to potentially pay athletes. (AP Photo/Darron Cummings, File)

A small Texas university has gone to court to object to the $2.77 billion settlement proposal that would erase a set of antitrust claims against the NCAA and the nation's largest conferences and clear the way for schools to begin steering millions of dollars directly to athletes as soon as fall 2025.

Houston Christian filed its motion in federal court in California, arguing the settlement would divert funds from academics and marginalized and underserved populations as well as putting big-money college sports the over the needs of non-athlete students. The school contends its interests were not represented during settlement talks despite being an NCAA member.

Officials at smaller schools across the NCAA noted they were not consulted or informed about settlement details before they were announced last month and have said the financial impacts for them could be dire. The court filing by Houston Christian is first known official objection to the proposal, which will need approval from U.S. District Court Judge Claudia Wilken to take effect.

Tyler Boyd, Houston Christian’s general counsel, said there could be more objections on the way.

“I think for other people that look into this case, it’s going to raise an issue of fiduciary responsibility,” Boyd said this week. “And whenever there’s a fiduciary responsibility issue raised, that goes to the core mission of the university, and are we living out the core mission of the university.”

The plan is intended to settle a host of federal antitrust claims and also clears the way for schools to share revenue with athletes, a dramatic step that all but ends the NCAA's longstanding amateurism model.

The defendants in the case included the Atlantic Coast, Big Ten, Bit 12, Pac-12 and Southeastern conferences but also the NCAA, whose vast membership includes 1,100 schools that have athletic departments of varying sizes and budgets to match.

The NCAA will cover 41% of the $2.77 billion total — largely by lowering its annual payments to its member schools over 10 years — while the ACC, Big Ten, Big 12, Pac-12 and SEC will cover 24%. The next five largest college football conferences (American Athletic, Mid-American, Conference USA, Mountain West ands Sun Belt) will cover 10%.

The remaining quarter of the total will be covered by non-football conferences in Division I and by conferences that compete in the second tier of D-I football, the Championship Subdivision. Houston Christian is a member of the latter group, competing in the Southland Conference that has 10 schools and some 4,200 athletes.

“Even now, without the proposed settlement, NCAA member institutions annually lose untold millions of dollars by participating in Division I sports. Only a select few ever generate enough revenue from athletics to cover their expenses,” the school said in its motion to intervene — formally take part — in the case. “The proposed settlement institutionalizes the diversion of money that would otherwise inure to the member institutions for the core mission of education and research, by requiring them to pay damages for athletes’ name, image, and likeness and establishing a continuing formula for doing so on a go-forward basis.”

HCU said 95% of its approximately 2,500 students receive financial aid. Boyd said Houston Christian believes someone has to look out for smaller schools with limited resources.

“I think it’s certainly unprecedented, and this is uncharted territory,” he said. “And the reason for the intervention is really just to have our voice be heard during these unprecedented times.”

Boyd said he wouldn’t be surprised to see other challenges from smaller schools or others looking to join Houston Christian's fight. He said the case is not anti-athlete, but rather is in favor of supporting regular students.

“Those institutions are going to have to look at this case," he said. “And it’s certainly up to them if they would want to get involved with our intervention.”


AP college sports: