A new lawsuit could change how much colleges can pay athletes
· Yahoo Sports
A new antitrust lawsuit has been filed against the NCAA in federal court that seeks to lift restrictions on what colleges pay players in revenue-sharing in 17 states, including California, Ohio, Michigan, Pennsylvania and Tennessee.
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Schools currently face a $20.5 million cap on revenue-sharing under terms of the House vs. NCAA legal settlement that started last year. But this new case argues this restriction violates the law in 17 states that have adopted legislation about paying college players for their names, images and likenesses (NIL). The suit seeks damages on behalf of affected college football and basketball players.
“Defendants’ coordinated decision to implement these restrictions in violation of these states’ NIL laws (the “Agreement”) was not authorized by the Court,” the lawsuit states. “If not for the Agreement, there would be vigorous competition in the NIL Rights States to pay college athletes in those states for their NIL rights. The Agreement has thus unlawfully restrained competition, in violation of both federal antitrust law and California state law.”
The lawsuit also takes aim at rules restricting donor collectives
The proposed class-action lawsuit names the NCAA and the Power Four conferences as defendants, along with the College Sports Commission (CSC), which is charged with enforcing NIL and revenue-sharing rules.
It is just the latest antitrust lawsuit to hit the NCAA, which has been battered by them to the point college sports is almost unrecognizable from what it was just five years ago. The House settlement came from an antitrust lawsuit. So did the settlement that led to unrestricted annual transfers for players. All these cases generally argued NCAA rules unfairly restrained trade or earnings potential for players.
In this case, the new suit also takes aim at rules that restrict donor collectives or third parties that are associated with schools to pay players for their NIL.
The CSC has required such deals must serve a “valid business purpose related to the promotion or endorsement of goods or services provided to the general public for profit.” The reason for this is to make sure it’s a legitimate NIL deal and not just payments to a player to play for a certain school.
But this lawsuit says such restrictions “suppress or eliminate whole categories of NIL opportunities that the laws in the NIL Rights States protect.”
What states would this action affect?
The suit names 17 states that have adopted NIL rights legislation and said the defendants are violating those rights by restricting what athletes can earn.
California is one example.
“California NIL law does not prohibit NIL being conditioned on attending a specific school or prohibit NIL from being used as ‘pay-for-play,’ as that term has sometimes been used,” the complaint states. “Instead, the California NIL Law is titled the ‘Fair Pay to Play Act,’ which makes clear that pay-for-play, as permitted and protected in the Act, is lawful, legitimate NIL compensation.”
An appendix to the complaint lists the other NIL rights states as Arizona, Connecticut, Maryland, Michigan, Mississippi, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia and West Virginia.
This lawsuit theoretically still could result in a national lifting of revenue-sharing restrictions if it is resolved in a settlement with conferences that have schools outside those 17 states.
Who are the plaintiffs in this case?
Southern California linebacker Talanoa Ili and Stanford quarterback Charlie Mirer are the only named plaintiffs so far. They brought the suit on behalf of four proposed classes of similarly situated Division I college athletes involved in football and men’s basketball.
“Before the Settlement’s approval, Ili received a substantial multi-year offer from the House of Victory collective associated with USC,” the complaint stated. “That offer disappeared after the Court approved the Settlement, and it has not resurfaced since he signed a commitment on November 7, 2025, to attend and play for USC. Absent the NIL Restrictions on Direct Pay NIL Compensation, Ili would have received more for his NIL rights than he now receives. The Agreement has thus injured Ili.”
Mirer is the son of former Notre Dame and NFL quarterback Rick Mirer.
“Under the revised NCAA rules, no collective has compensated Mirer after 2024,” the complaint states. “In the absence of the NIL Restrictions, Mirer would have been paid by one or more Associated Third Parties for his NIL rights in 2025 and 2026. The Agreement has thus injured him.”
The lawsuit seeks an award of triple damages for the plaintiffs and class members.
Conflicts with state laws acknowledged by NCAA?
The NCAA continues to seek federal legislation to help stabilize college sports and bring uniformity to its governance, as opposed to having different laws in different states.
The lawsuit states this effort essentially validates its claims and cites comments from NCAA President Charlie Baker, who also is a named defendant. Baker said in 2024 “if Congress does not act, the progress reached through the settlement could be significantly mitigated by state laws and continued litigation.”
“This public acknowledgment confirms that, prior to implementation of the NIL restrictions, Baker knew that the revised NCAA rules conflicted with California’s NIL Law absent federal preemption that has never materialized,” the complaint states.
The lawsuit makes a fine point on House settlement
The complaint states it isn’t challenging the House settlement itself or its continuation through June 2035. Instead it is challenging the implementation of it in those 17 states by asking for injunctive relief.
This is a fine point the NCAA likely will challenge since revenue-sharing cap is part of the House settlement.
“Defendants knew that the implementation of the new NIL Restrictions and the revised NCAA rules, through the CSC’s enforcement, would conflict with the NIL laws in the NIL Rights States,” the complaint states. “Defendants nonetheless agreed to implement the NIL Restrictions in the NIL Rights States.”
The plaintiffs are represented by Eric L. Cramer and Robert Litan of the firm Berger Montague and Ted Normand of the firm Freedman, Normand, Friedland.
Follow reporter Brent Schrotenboer @Schrotenboer. Email: [email protected]
This article originally appeared on USA TODAY: NCAA hit with lawsuit targeting revenue-sharing cap for players