With the final approval hearing for the House settlement before Judge Wilken in the Northern District of California set for April 7, the state of South Dakota has continued its battle to prevent that settlement from getting approved. After initially filing a lawsuit in South Dakota state court seeking to prevent the settlement from taking effect, the National Collegiate Athletic Association (NCAA) removed the case to federal court. However, on March 28, the federal court in South Dakota remanded the case back to South Dakota state court. Now, South Dakota has filed a motion for a preliminary injunction, seeking to block the settlement.
South Dakota takes issue with the structure of the settlement, which it argues unfairly places the financial burdens of the $2.8 billion settlement on the non-Power 4 conferences. Specifically, South Dakota highlights that only $1.15 billion is being paid out of the NCAA’s reserves, while the non-Power 4 institutions will be responsible for funding 60% of the remaining $1.65 billion. This, South Dakota argues, is unfair because these institutions are not defendants in the litigation and will not benefit as significantly as will the Power 4 institutions and other large programs from the creation of the NIL “pool” fund, which sits at the heart of the House settlement. The “pool” will permit institutions to directly compensate student-athletes for their name, image, and likeness (NIL). South Dakota claims that the NCAA violated its own constitution, bylaws, and agreements with member institutions when it formulated and approved the revenue reduction model that underlies the House settlement.
In its motion for a preliminary injunction, South Dakota went even further, arguing that the Power 4 conferences are actually “responsible for 90% (if not 100%) of the damages covered by the settlement yet the NCAA is sticking non-Power 4 schools with 50% or more of the cost.”
