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Trump Court Challenges & NCAA $2.8 Billion Deal · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
0:08
Speaker 1: The headline is that Musk has your data. That Musk
0:12
Speaker 1: has control of the systems as a Treasury appointee. That
0:16
Speaker 1: is unfathomable. The extraordinary empowerment of billionaire Elon Musk by
0:21
Speaker 1: Donald Trump seems to be the repeating headline. Musk's allies
0:26
Speaker 1: in his Department of Government Efficiency or DOGE, in their
0:30
Speaker 1: attempt to dismantle the federal workforce, orchestrated a physical takeover
0:35
Speaker 1: of the US Agency for International Development, ousting security officials
0:40
Speaker 1: who tried to stop them, and gaining access to the
0:43
Speaker 1: Treasury Department's payment systems that pay out tax refunds, social
0:48
Speaker 1: Security checks, and healthcare reimbursements. What seems to have wrong
0:52
Speaker 1: alarm bells are warnings that DOGE workers now have access
0:56
Speaker 1: to the private financial data of millions of a Marria
1:00
Speaker 1: Perkins that includes names, phone numbers, social security information, and
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Speaker 1: bank information. A group of unions sued the Treasury Secretary
1:09
Speaker 1: and others, including the AFL CIO filed a separate suit
1:14
Speaker 1: against DOJE and the Labor Department to stop Elon Musk's
1:17
Speaker 1: people from accessing those systems. Many Democratic members of Congress,
1:22
Speaker 1: like Senator Mark Warner of Virginia and Representative Ayana Presley
1:26
Speaker 1: of Massachusetts, have joined protests this week in DC against
1:32
Speaker 1: Musk and his minions.
1:34
Speaker 2: You've got, folks, we don't know anything about, looking at
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Speaker 2: potentially all of our personal information, all of the money
1:45
Speaker 2: flows that go out of treasury. The Banking Committee needs
1:49
Speaker 2: to bring up the doose folks who are illegally in
1:53
Speaker 2: Treasury and have them testify. I am so tired of
1:59
Speaker 2: these big billionaire boys in their grabby little hands.
2:04
Speaker 1: So far, the courts have been the only restraint on
2:07
Speaker 1: Musk and the Trump administration. Just today, a DC federal
2:11
Speaker 1: judge placed temporary limits on doja's access, a federal judge
2:16
Speaker 1: in Massachusetts paused the federal worker buyouts, and a Maryland
2:21
Speaker 1: judge indefinitely blocked Trump's effort to do away with birthright citizenship.
2:27
Speaker 1: Joining me is constitutional law expert Harold Krant, a professor
2:30
Speaker 1: at the Chicago Kent College of Law, how it's so
2:33
Speaker 1: difficult to keep track of all the lawsuits against the
2:37
Speaker 1: Trump administration. Today alone, there were four hearings before judges
2:41
Speaker 1: in different states. Does it seem as if Trump is
2:46
Speaker 1: just acting and not worrying about the law or any
2:51
Speaker 1: legal restrictions.
2:53
Speaker 3: In my mind, he's acting with who respects the law,
2:56
Speaker 3: sort of the way he is with expect to foreign
2:58
Speaker 3: policy and the way he did business war, which was
3:01
Speaker 3: to start out dramatically asking for the moon, frightening everybody,
3:06
Speaker 3: and then slowly chipping away at demands. And it's proved
3:11
Speaker 3: effective in business to a large extent. I don't know
3:15
Speaker 3: how effective it'll be with tariffs and other kinds of
3:18
Speaker 3: international relations, and I think it'll be slightly effective with
3:21
Speaker 3: respect to legal challenges as well.
3:24
Speaker 1: Alone, today there were four different hearings in courts based
3:28
Speaker 1: on the lawsuits that have been filed already on some
3:31
Speaker 1: of his orders. Now, I want to start with the
3:34
Speaker 1: empowerment of Elon Musk. He orchestrated a physical takeover of
3:40
Speaker 1: the US Agency for International Development, and also he got
3:45
Speaker 1: access to the US Treasury Department's payment system. Trump did
3:49
Speaker 1: sign an executive order giving Musk's workers unfettered access to
3:54
Speaker 1: government agencies, But as a professor once told me, executive
3:59
Speaker 1: orders are just a piece of paper.
4:01
Speaker 3: Yeah, in so many areas, there's a level of violations
4:05
Speaker 3: of Congressional enactments. Some are more egregious than others, some
4:09
Speaker 3: are subtle. I mean the role of Musk as a
4:13
Speaker 3: special governmental employee at this time is one of those
4:16
Speaker 3: gray areas. Because there is a role for a special
4:18
Speaker 3: governmental employee, they can assume powers for a limited period
4:21
Speaker 3: of time, and so far, obviously Musk has not exceeded that.
4:26
Speaker 3: But in terms of what he's actually done, there appears
4:29
Speaker 3: to be violation costs of the Privacy Act of TURAS
4:32
Speaker 3: of getting access of all those Social Security numbers. That's
4:35
Speaker 3: a pretty good indication. And of course the USAID was
4:39
Speaker 3: set up by Congress, so a presidential order cannot dismantle
4:44
Speaker 3: an agency that's been chartered by Congress. So I think
4:47
Speaker 3: there's a spectrum of action. Some appear to be clearly unconstitutional,
4:53
Speaker 3: like the birthright Citizenship Order. Some are closer in question.
4:58
Speaker 3: There's another lawsuit that was stiled this morning, I believe
5:01
Speaker 3: against Chicago or is Sanctuary's city policies. I think it's
5:05
Speaker 3: a closer call in terms of where you draw the line.
5:09
Speaker 3: So there's just a lot that's being thrown up against
5:12
Speaker 3: the wall. But some have some merit, and it's going
5:15
Speaker 3: to take a while for the courts to unravel that
5:18
Speaker 3: we haven't mentioned yet, the whole challenge to the questions
5:22
Speaker 3: about the independent agencies, since he's fired a member of
5:25
Speaker 3: the National Labor Relations Board, which is an independent agency
5:29
Speaker 3: that I think has a chance of success, and it's
5:31
Speaker 3: ultimately Supreme Court, given what the Supreme Court has said previously.
5:35
Speaker 3: But whether Trump then can take the next step and
5:39
Speaker 3: try to get rid of civil service, I'm far more
5:41
Speaker 3: dubious about that.
5:42
Speaker 1: So for the first time a judge has placed limits
5:46
Speaker 1: on Doge. He temporarily limited access to the Treasury Department's
5:51
Speaker 1: payment system after a group of unions accused the agency
5:55
Speaker 1: of illegally sharing their members information with Elon Musk Government
6:00
Speaker 1: Efficiency Group. If there are people within the administration willing
6:05
Speaker 1: to work with him, it seems like it's hard to
6:07
Speaker 1: stop him.
6:09
Speaker 3: I agree. I mean, if he's working clearly with the
6:12
Speaker 3: blessing of the President, and so that the only time
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Speaker 3: a Treasury Department official or USAID official can say no
6:23
Speaker 3: is if there is a pretty clear congressional sort of
6:26
Speaker 3: framework and give it. Despite analogy and Trump fire Inspectors General, well,
6:32
Speaker 3: Congress has a structure in place that allows for dismissal
6:38
Speaker 3: of the spector generals, but Trump didn't follow it. So
6:43
Speaker 3: in that sense, obviously the resort is to court, and
6:46
Speaker 3: I think it's clear that the court turned back those dismissals,
6:50
Speaker 3: at least temporarily, in order to force worstmenions to comply
6:55
Speaker 3: with the congressional structure. And so, you know, again we'll
6:59
Speaker 3: have to wait see things play out. But I think
7:02
Speaker 3: what's really frightening is not just that the Doge got
7:06
Speaker 3: the private information. The question is what do they really
7:09
Speaker 3: want to do with it. Do they really want to
7:12
Speaker 3: just make the government more efficient and make sure there
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Speaker 3: are payments aren't going to the wrong people. That's one thing.
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Speaker 3: It's another thing they have kind of a deep state
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Speaker 3: and have Big Brother watching everything we do because we
7:25
Speaker 3: all have personal identifiers, and that must people may be
7:29
Speaker 3: sort of tacking on to these personal identifiers other kinds
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Speaker 3: of individual indications for statistics, which gives us rise to
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Speaker 3: kind of Chinese type of big government all of us.
7:41
Speaker 3: We're not there yet, but that is at least one
7:43
Speaker 3: step of the way.
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Speaker 1: So you mentioned usaid. They asked Trump, they said, don't
7:48
Speaker 1: you need congressional approval? He said, I don't think so.
7:51
Speaker 1: There are plans apparently to dismantle the Education Department, congressional
7:56
Speaker 1: approval is required. If Congress doesn't object, or if they say, oh,
8:00
Speaker 1: well we're folding it into this Department of State, will
8:05
Speaker 1: it just go forward, then there can.
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Speaker 3: Be challenges, just like there can be challenges to the empowerment.
8:10
Speaker 3: We saw that in the President Nixon's era, and we're
8:13
Speaker 3: going to see that again. I'm sure with President Trump.
8:15
Speaker 3: If somebody who said they would have gotten money would
8:18
Speaker 3: have gotten the benefit, but for the actions of the
8:21
Speaker 3: administration to fold in the Education Department, there's something else,
8:26
Speaker 3: or hold in Usaid into the State Department or somewhere else.
8:30
Speaker 3: They would say, look, we were on a track to
8:33
Speaker 3: receive money and get these benefits, and but for the
8:37
Speaker 3: president's actions not receiving the money. And sometimes there's a
8:41
Speaker 3: standing problem there to show how close that link is.
8:45
Speaker 3: But again, it's been made with empownment in the past,
8:47
Speaker 3: and I think if you will likely be made with
8:50
Speaker 3: respect to education and Usaid as well. And so those
8:54
Speaker 3: cases will get to court.
8:55
Speaker 1: Ultimately, Trump has launched a full scale assault on the
8:59
Speaker 1: federal world. So this offer was made. It was called
9:02
Speaker 1: a buyout offer, but it's not really a buyout offer
9:05
Speaker 1: for federal workers to resign and then they would get
9:09
Speaker 1: paid through September. Now there's a problem with this because
9:15
Speaker 1: there is a law about how long it can be
9:17
Speaker 1: on administrative leave. But also the government hasn't been funded
9:21
Speaker 1: past March fourteenth, so there are all kinds of problems
9:26
Speaker 1: with this. Yet federal workers, you know, something like forty
9:29
Speaker 1: or fifty thousand have said they'll take the offer, even
9:32
Speaker 1: though unions have advised against it.
9:35
Speaker 3: On this level, I think that the action adminisation that's
9:38
Speaker 3: probably legal, just like any other kind of buyout. And
9:43
Speaker 3: guess there are issues about what happens if funding drives
9:46
Speaker 3: out in terms of paying these settlements, and maybe they'll
9:49
Speaker 3: be able to use some of the money from somewhere
9:52
Speaker 3: else to pay the settlements going forward. That part is
9:57
Speaker 3: obviously unclear. That the idea in sake of saying to
10:01
Speaker 3: a federal employee, you have a right under civil service
10:04
Speaker 3: to continue your job, but we will give you an
10:06
Speaker 3: insensive to leave early, and some of them were planning
10:09
Speaker 3: to leave anyway, I think that probably is closer to
10:13
Speaker 3: the legal line in comparison to some of the other
10:16
Speaker 3: moves the administration has been making.
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Speaker 1: Now, this was one of the hearings in Massachusetts today,
10:21
Speaker 1: a federal judge paused the deadline for that so called
10:25
Speaker 1: buyout program because unions representing more than eight hundred thousand
10:30
Speaker 1: federal workers asked the judge to halt the program. So
10:34
Speaker 1: there's going to be another hearing at two pm on Monday.
10:39
Speaker 3: Yeah, I mean, I think there are questions of again,
10:42
Speaker 3: is this can you bind the federal government to pay
10:46
Speaker 3: make these payments when there is not continuing funding for
10:51
Speaker 3: the government. That raises an issue, you know, I think
10:54
Speaker 3: that lots of issues are contingent upon continual funding by
10:58
Speaker 3: the government and that hitting the debt, fealing, et cetera.
11:01
Speaker 3: So I mean, maybe there are some procedural issues that
11:04
Speaker 3: I'm not aware of that the court will look to
11:07
Speaker 3: to try to stop the buyout. But again, in comparison
11:10
Speaker 3: to the other moves that we've been seeing in terms
11:13
Speaker 3: of discharge of general, of the discharge of the head
11:17
Speaker 3: of an OLRB, that's dismantling of AID, I think this
11:20
Speaker 3: is far less concerning than some of the other in
11:23
Speaker 3: my mind, than some of the other moves that Trump
11:25
Speaker 3: administration is making.
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Speaker 1: Coming up next on the Bloomberg Law Show, we'll take
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Speaker 1: a look at some of those other moves that are
11:31
Speaker 1: being questioned in the courts. Remember, you can always get
11:34
Speaker 1: the latest legal news by listening to our Bloomberg Law
11:36
Speaker 1: podcast wherever you get your favorite podcasts. I'm Jim Grosso
11:40
Speaker 1: and you're listening to Bloomberg. Donald Trump is attempting to
11:46
Speaker 1: expand presidential power by asserting authority over US citizenship, federal spending,
11:52
Speaker 1: and the government workforce, to name a few. Is Trump
11:56
Speaker 1: daring judges to stop him from asserting vast author Some
12:01
Speaker 1: of his early moves have already led to lawsuits, and
12:04
Speaker 1: in most cases so far, federal judges have put the
12:07
Speaker 1: brakes on Trump's executive orders. I've been talking to Harold Krant,
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Speaker 1: a professor at the Chicago Kent College of Law. How
12:15
Speaker 1: let's turn to that order freezing federal grants, loans, and
12:19
Speaker 1: financial assistance, which caused chaos across the country, and the
12:23
Speaker 1: Trump administration said they rescinded the memo putting it into effect,
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Speaker 1: But they haven't rescinded the order, and so I guess
12:30
Speaker 1: this shows that judges, some of them, are looking behind
12:33
Speaker 1: what's happening, because judges are going forward with hearings despite
12:38
Speaker 1: the fact that the Trump administration said the memo was
12:41
Speaker 1: rescinded Democratic Attorney's General file suit, and today they said
12:46
Speaker 1: in court that state agencies were still having difficulty accessing
12:51
Speaker 1: federal funds they were entitled to. Rhode Island Judge John McConnell,
12:55
Speaker 1: who had issued a temporary restraining order, said that he
12:59
Speaker 1: believed his order was clear and he stood ready to
13:03
Speaker 1: enforce the plain language of his order. He scheduled of
13:07
Speaker 1: February twenty first hearing on whether he should issue a
13:10
Speaker 1: longer preliminary injunction. It seems to be pretty clear that
13:14
Speaker 1: Trump can't freeze funding unilaterally.
13:18
Speaker 3: I totally agree Trump can't do that, you know, Laron,
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Speaker 3: That's what the court said as well. I think there
13:22
Speaker 3: are issues, though, that the court is well situated to
13:26
Speaker 3: continue the case because for two reasons. One you mentioned
13:30
Speaker 3: is that it's not clear that Trumps really has lifted
13:35
Speaker 3: the order on freeze of the funds, and the reports
13:39
Speaker 3: are coming out that some funds are getting out and
13:41
Speaker 3: some funds are not. But secondly, it can be repeated,
13:44
Speaker 3: and so this is the kind of question of there's
13:48
Speaker 3: no moonness here because it's so readily apparent that Trump
13:53
Speaker 3: may freeze and this lead and to freeze other kinds
13:55
Speaker 3: of appropriated funds from Congress, so that the issue we
14:00
Speaker 3: owns alive and well. And so I think the courts
14:03
Speaker 3: will continue the cases they should, and they will ultimately
14:07
Speaker 3: conclude that this is absolutely unconstitutional.
14:10
Speaker 1: Except for the courts, it seems to be clear sailing
14:14
Speaker 1: for Trump because he doesn't have any opposition in Congress
14:18
Speaker 1: at all, except from Democrats who clearly don't have the votes.
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Speaker 3: Yeah, and the big picture is are the guard RULs
14:26
Speaker 3: going to come from nowhere or are they going to
14:28
Speaker 3: come from the Court or from Congress ultimately? And members
14:32
Speaker 3: of the Republican of Congress kindly going to say, you know,
14:35
Speaker 3: we were elected to do an independent job, and the
14:39
Speaker 3: President has taken away our legislative authority. We don't know
14:43
Speaker 3: where the guard rules are going to come. And we
14:44
Speaker 3: just have to hope that one of those two branches
14:48
Speaker 3: will be able to step up and limit some of
14:51
Speaker 3: the cruder moves that the administration is already taken.
14:56
Speaker 1: As far as courts, the Supreme Court, in a controversial decision,
15:03
Speaker 1: gave Trump sweeping immunity from criminal prosecution at the end
15:07
Speaker 1: of last term. Also, the Conservatives believe in this unitary executive.
15:13
Speaker 1: They're also trying to cut back on agency power repeatedly.
15:18
Speaker 1: So what do you think will the Supreme Court be
15:20
Speaker 1: supportive of Trump? They were not in his last term,
15:24
Speaker 1: but they were this last year.
15:26
Speaker 3: Well, absolutely, I mean I think that I think the
15:28
Speaker 3: Community decision is a one off. It's a terrible decision,
15:31
Speaker 3: but I don't think it has for what the Court
15:35
Speaker 3: will do in the future. But the Court has adopted,
15:38
Speaker 3: as you mentioned, the form of the unitary executive authility,
15:41
Speaker 3: which means the president should be able to fire any
15:45
Speaker 3: policy maker at will in order to make sure that
15:48
Speaker 3: all actions that are final of the government can be
15:51
Speaker 3: traced to the president. So I would not be surprised
15:54
Speaker 3: if the Court is sympathetic with respect to giving the
15:59
Speaker 3: power to the president to fire agency head officials, including
16:04
Speaker 3: most frighteningly the head of the FED, because that's just
16:08
Speaker 3: another type of policy that's being administered by a right now,
16:14
Speaker 3: an independent agency head. But I don't think that even
16:18
Speaker 3: if the Supreme Court takes that step, they will expand
16:22
Speaker 3: enough to the unitary to say that the civil service
16:26
Speaker 3: is an unconstitutional Many unions right now public employee beings
16:31
Speaker 3: are very concerned that the next objective of the Trump
16:36
Speaker 3: administration will put the civil service in the cross ears.
16:40
Speaker 3: And I think the court will be sympathetic to the
16:44
Speaker 3: principles under civil service. But that's that's true.
16:48
Speaker 1: You also have this moved by the Justice Department to
16:52
Speaker 1: ferret out any employees of the FBI, whether they're whether
16:56
Speaker 1: they're file clerks or special agents, to find out whether
17:00
Speaker 1: they worked on any January sixth cases or any of
17:04
Speaker 1: the criminal investigations into Trump. I mean, it seems like
17:07
Speaker 1: a campaign of retribution that Trump has promised in an
17:11
Speaker 1: opening salvo. The agents are suing the Justice Department to
17:15
Speaker 1: try to stop their name and information from being disseminated
17:21
Speaker 1: to the public, exposing them to retribution from in particular
17:26
Speaker 1: the January sixth defendants whom Trump pardoned. And now the
17:30
Speaker 1: new Attorney General, Pam Bondi, despite what she testified to
17:34
Speaker 1: in her confirmation hearings about not seeking retribution, has announced
17:38
Speaker 1: a new working group to examine past weaponization of the
17:42
Speaker 1: Justice Department to review activities over the past four years
17:46
Speaker 1: for instances where conduct appears to have been designed to
17:50
Speaker 1: achieve political objectives, including of course, criminal probes into Donald Trump.
17:56
Speaker 1: It would also target unethical prosecutions related to January sixth,
18:02
Speaker 1: so much for her testimony.
18:04
Speaker 3: It's out rageous. I mean, obviously this is just vindictive,
18:07
Speaker 3: it's vengeance. There is no basis in law for this
18:11
Speaker 3: kind of witch hunt, including by the way Line prosecutors
18:16
Speaker 3: who ordered to investigate and FBI agents who are ordered
18:20
Speaker 3: to investigate the writers on January sixth, and now they're
18:25
Speaker 3: being drummed out of the government. I mean, this is
18:27
Speaker 3: just petty, vindictive moves by the administration that's kind of hateful.
18:32
Speaker 3: On the other hand, most of these probably all of them,
18:35
Speaker 3: do not have any kind of protection from at well
18:38
Speaker 3: employment and these employees, and therefore that's one of the
18:41
Speaker 3: great illustration of why protection from at plenary muval authority
18:47
Speaker 3: are so important, because you can become then victimized in
18:51
Speaker 3: this vindictive, petty way.
18:54
Speaker 1: I mean, let's face it. On day one, he issued
18:57
Speaker 1: all these executive orders which were clearly unlawful, and one
19:02
Speaker 1: executive order directed the Attorney General not to enforce the
19:06
Speaker 1: law that Congress had passed requiring TikTok to be sold
19:10
Speaker 1: by its Chinese parent company or face a US ban.
19:14
Speaker 1: So Attorney General don't enforce the law. Has Congress, has
19:18
Speaker 1: the legislative branch just given up too much of its
19:22
Speaker 1: authority over the years.
19:24
Speaker 3: Yeah, I mean, I think that that is a great illustration,
19:26
Speaker 3: and it's not the most important policy issue in terms
19:28
Speaker 3: of TikTok, whether it be divested or not. But Congress,
19:32
Speaker 3: for good or evil, passed a statute that said TikTok
19:36
Speaker 3: atopy doves is by mid January. That deadline went and passed,
19:43
Speaker 3: and the President said, I don't care what Congress said,
19:46
Speaker 3: I'm not ready to enforce the ban. I mean, obviously
19:50
Speaker 3: the president can always not enforce things in terms of
19:54
Speaker 3: saying I don't have the resources to investigate and right
19:58
Speaker 3: now and to prosecute tact for not a body and
20:01
Speaker 3: by Congress disorder. But instead of doing that quietly, President
20:05
Speaker 3: Trump just made announcements like I don't fee what Congress says,
20:08
Speaker 3: and that's just really destructive of our separation of powers,
20:11
Speaker 3: our checks and balances. And again, at some point one
20:16
Speaker 3: can hope the members of Congress President's own party will say,
20:19
Speaker 3: don't know, we have to respect the checks and balances
20:22
Speaker 3: in our constitution. But that's not going to come anytime soon,
20:25
Speaker 3: I fear.
20:27
Speaker 1: But it just seem like, it seems like at this level,
20:29
Speaker 1: at the district court level, that so far his orders
20:35
Speaker 1: or you know, his moves are being stopped temporarily stops,
20:40
Speaker 1: you know, temporary injunctions tros by the judges.
20:45
Speaker 3: Yeah, I mean, courts are taking the responsibility seriously and
20:48
Speaker 3: most do. And I think we'll see a lot of
20:51
Speaker 3: pushback from the Trump administration in the courts, and ultimately
20:55
Speaker 3: we'll have to see what the Supreme Court does and
20:57
Speaker 3: whether the Trump administration decides to a body buy what
21:00
Speaker 3: lower courts than the Supreme Court orders were not there yet,
21:04
Speaker 3: but I'm sure that day is coming, and I'm.
21:06
Speaker 1: Sure you're right. Thanks so much, Hal. That's Professor Harold
21:10
Speaker 1: Krent of the Chicago Kent College of Law coming up
21:14
Speaker 1: the ncaaa's proposed settlement encounters problems. I'm June Grosso. When
21:19
Speaker 1: you're listening to Bloomberg, some current and former college athletes
21:25
Speaker 1: are raising objections as a judge weighs a deal that
21:28
Speaker 1: would require the NCAAA to pay two point eight billion
21:32
Speaker 1: dollars in damages for past restrictions on athlete compensation. More
21:37
Speaker 1: than a dozen objections were filed in court, with some
21:40
Speaker 1: of them taking issue with a deal provision that will
21:42
Speaker 1: send most of the settlement proceeds to male athletes, claiming
21:46
Speaker 1: the deal discounted Title nine regulations. Joining me is Alfred
21:52
Speaker 1: jen a professor of law at Boston College Law School,
21:55
Speaker 1: tell us about this two point eight billion dollar deal NCAAA,
22:00
Speaker 1: So start by just telling us about this for those
22:03
Speaker 1: who don't know what this two point eight billion dollar
22:06
Speaker 1: settlement is about.
22:07
Speaker 4: As you know, for many years, the NCAAA has taken
22:11
Speaker 4: the position that an athlete would lose his or her
22:15
Speaker 4: eligibility if she earned compensation of any sort because of
22:20
Speaker 4: her status as an athlete. So that would include direct
22:23
Speaker 4: payments from the university like salary, and it would include
22:26
Speaker 4: endorsement deals as well, so if you've got a clothing
22:29
Speaker 4: deal with Nike or something like that. And so for years,
22:33
Speaker 4: athletes forewent all of those things and did not earn
22:37
Speaker 4: any money. The NCAAA then got sued in a case
22:41
Speaker 4: called a House versus NCAAA, that's why it's called the
22:44
Speaker 4: House Settlement, contending that the NCAAA rules prohibiting athletes from
22:50
Speaker 4: earning money through so called name, image, and likeness deals
22:53
Speaker 4: so effectively endorsement deals was a violation of the anti
22:57
Speaker 4: trust law, and the NCAAA is agreeing to settle although
23:01
Speaker 4: the settlement has not yet been approved, these anti trust
23:05
Speaker 4: claims with a fairly large number of current and former
23:09
Speaker 4: athletes for a sum of money that comes to the
23:12
Speaker 4: sum that you mentioned.
23:14
Speaker 1: There are numerous challenges to this settlement, and a big
23:19
Speaker 1: issue seems to be that the provision will send most
23:23
Speaker 1: of the settlement proceeds to mail athletes.
23:27
Speaker 4: Yes, that is one of three most prominent objections that
23:32
Speaker 4: have been made. There are two kinds of payments that
23:35
Speaker 4: will be made as a result of the settlement. One
23:39
Speaker 4: is straight damages, so, in other words, because you were
23:43
Speaker 4: an athlete or you are an athlete and your earning
23:46
Speaker 4: potential has been restrained by the NCAA, we will give
23:49
Speaker 4: you a sum of money to settle your anti trust
23:51
Speaker 4: claim against us. The second kind of payment that will
23:55
Speaker 4: be made is that the NCAA and it has agreed
23:59
Speaker 4: to permit its member institutions to make payments directly to athletes,
24:05
Speaker 4: so called revenue sharing payments. And these are payments that
24:10
Speaker 4: could total as much as a little over twenty million
24:13
Speaker 4: dollars per institution, So that money would go to people
24:19
Speaker 4: who are athletes starting in the twenty five to twenty
24:22
Speaker 4: six academic year and continue on, at least in theory, indefinitely.
24:27
Speaker 4: Once you have a big bag of money like that,
24:29
Speaker 4: whether it's Type A or Type B, the question becomes, well,
24:32
Speaker 4: how do we know how much each athlete will get?
24:35
Speaker 4: And the idea behind the settlement is that men's football,
24:41
Speaker 4: and then men's and women's basketball will get much larger
24:45
Speaker 4: disproportionate shares than athletes in any other sport. And so,
24:51
Speaker 4: of course, because football is played almost one hundred percent
24:54
Speaker 4: by men in college, a huge amount of the money
24:57
Speaker 4: goes to men.
24:58
Speaker 1: Does that pose a problem with titlelind gender equity laws?
25:02
Speaker 4: Well, it could be. So this is an area where
25:07
Speaker 4: I don't think we actually know for sure what the
25:10
Speaker 4: answer is. So let me work with the payments being
25:15
Speaker 4: made by the universities, the so called revenue sharing payments.
25:19
Speaker 4: Just to give you our listeners a bit of a
25:22
Speaker 4: conceptual idea of why this is so difficult. So the
25:26
Speaker 4: university is going to give money to athletes, what do
25:29
Speaker 4: we think that money represents. One possibility is we could
25:34
Speaker 4: think of it, if you will, as a scholarship enhancement.
25:38
Speaker 4: You're already a scholarship athlete at Notre Dame University, right,
25:42
Speaker 4: and we're just going to enhance the amount of money
25:45
Speaker 4: we give to you as a scholarship. One way we
25:48
Speaker 4: could think about it. Another way we could think about
25:51
Speaker 4: it is these are wages. It's as if you got
25:54
Speaker 4: a job as a research assistant or working in the
25:58
Speaker 4: dining hall or something like this. Scholarship money. It's money
26:01
Speaker 4: you earn for your labor. Okay. The reason that this
26:03
Speaker 4: could make such a big difference from the standpoint of
26:06
Speaker 4: Title nine is that the fairly consistent interpretation of Title
26:11
Speaker 4: nine by the federal government is that men and women
26:15
Speaker 4: have to receive identical scholarship assistance. You can't say we
26:19
Speaker 4: have bigger scholarships for men and smaller scholarships for women,
26:24
Speaker 4: roughly speaking, And so if we thought of these payments
26:28
Speaker 4: as a form of scholarship enhancement, then the answer would
26:31
Speaker 4: be that's right. If male players are getting one hundred
26:34
Speaker 4: and fifty thousand dollars a year scholarship enhancement, so would
26:37
Speaker 4: female players have to get one hundred fifty thousand dollars
26:40
Speaker 4: a year in enhancement scholarship. Conversely, if we thought about
26:44
Speaker 4: these as jobs. It is not the case that all
26:48
Speaker 4: the jobs at a university pay men and women exactly
26:51
Speaker 4: the same wage. Depending on the job you have, you
26:55
Speaker 4: might be paid more or less, and in some cases
26:58
Speaker 4: women might make less than men, and in some cases
27:00
Speaker 4: possibly the reverse. But if that were the case, then
27:04
Speaker 4: one might say, well, we pay football players more than
27:07
Speaker 4: we pay swimmers, and so we could see how that
27:10
Speaker 4: might be less of an issue under Title nine. We
27:14
Speaker 4: do not know how the courts think about this. In
27:17
Speaker 4: the waning days of the Biden administration, the Biden administration
27:21
Speaker 4: issued in opinion which effectively took the position that these
27:26
Speaker 4: enhanced revenues would be a form akin to enhanced scholarship payment.
27:30
Speaker 4: But of course we don't know if the new administration
27:32
Speaker 4: is going to persist with this interpretation.
27:35
Speaker 1: What are some of the other possible problems you see
27:37
Speaker 1: with the settlement?
27:39
Speaker 4: I think the other big problem with the settlement is, well,
27:44
Speaker 4: let me divide it again into two parts. Okay, So
27:47
Speaker 4: first there is the problem of exactly whose rights are
27:51
Speaker 4: bound by the settlement. So you have an identified class
27:56
Speaker 4: of people, let's say, a group of current and former
27:58
Speaker 4: athletes who can say they were damaged by the ncaaa's
28:02
Speaker 4: allegedly illegal practices, and they're going to get a check. Now. Normally,
28:07
Speaker 4: when a case settles, the people who are class members
28:11
Speaker 4: release all of their claims to sue against the defendant,
28:15
Speaker 4: and that's what happened between these class members. However, the
28:20
Speaker 4: revenue payments going forward, the ones that we talked about
28:23
Speaker 4: just a few moments ago, are not necessarily going to
28:27
Speaker 4: be paid to current class members. For example, let's suppose
28:31
Speaker 4: that you are an athlete now and you're fifteen years old,
28:34
Speaker 4: and you're not going to play for a Division one
28:36
Speaker 4: university until what three or four years from now? Right,
28:41
Speaker 4: you would get those revenue sharing payments. They would be
28:44
Speaker 4: capped at the limit prescribed by the settlement. But how
28:48
Speaker 4: do we know that as to that person that salary cap,
28:52
Speaker 4: that cap on payments is in fact legal. You can't say, well,
28:57
Speaker 4: you waived your claims to sue for anti trust law
28:59
Speaker 4: under the lawsuit, because that person wasn't a member of
29:02
Speaker 4: the class in this litigation. So that's one problem, right,
29:05
Speaker 4: is can you bind future athletes to the terms of
29:10
Speaker 4: the settlement. That's just a mechanical problem, which I don't
29:13
Speaker 4: think anyone really knows. The answer to yet, But my
29:16
Speaker 4: intuition is you cannot. They never signed away their right. Now,
29:20
Speaker 4: if those people have never signed away their right, then
29:22
Speaker 4: comes again the question. Is the NCAAA entitled to have
29:27
Speaker 4: a rule that limits the compensation its athletes received. That
29:32
Speaker 4: would appear to be an add trust violation, a form
29:36
Speaker 4: of price fixing, if you will. So, I think that
29:39
Speaker 4: that's a fairly furious complication to this settlement, and I
29:44
Speaker 4: am frankly somewhat skeptical that the parties have it worked
29:47
Speaker 4: out well enough. This could come apart later on well.
29:51
Speaker 1: The Justice Department also weighed in under the previous administration,
29:56
Speaker 1: questioning whether that proposed cap on revenue sharing aimans to
30:00
Speaker 1: athletes violates antitrust law. The NCAA said in a statement,
30:05
Speaker 1: we believe the objections raise issues that will already considered
30:09
Speaker 1: as part of the preliminary approval process. And a judge
30:13
Speaker 1: did give preliminary approval to the deal. So there's another
30:17
Speaker 1: hearing schedule for April seventh. But most people seem to
30:21
Speaker 1: think that she's going to approve the deal.
30:24
Speaker 4: Again, we get into the whole crystal ball question. In
30:27
Speaker 4: a conventional case, I might say that that makes sense yeah,
30:30
Speaker 4: the preliminary approval is a strong indication of what might
30:33
Speaker 4: happen with the federal government weighing in with some of
30:37
Speaker 4: the problems that I've mentioned. I would not be shocked
30:40
Speaker 4: if she said either I don't approve the deal or
30:43
Speaker 4: I want another round of modifications before I will approve
30:47
Speaker 4: the deal. I think that those are within the realm
30:49
Speaker 4: of possibility.
30:50
Speaker 1: Even if this is signed, it doesn't end things because
30:54
Speaker 1: there are other lawsuits that have been filed. There's one
30:58
Speaker 1: file by about seventy athletes let who opted out of
31:01
Speaker 1: the settlement. Those have to go forward. What will this
31:04
Speaker 1: really settle then, Well, I.
31:06
Speaker 4: Think that this is the question that many observers have,
31:09
Speaker 4: which is, as a technical matter, this can only be
31:12
Speaker 4: a settlement between the NCAAA and the people who choose
31:15
Speaker 4: to opt into this settlement. Everybody who chooses to opt out,
31:19
Speaker 4: everybody who was never a member of the class in
31:21
Speaker 4: the first place, Their legal rights have not been adjudicated
31:25
Speaker 4: or settled away. I don't understand how this is a
31:29
Speaker 4: permanent solution as a legal matter to the state of
31:33
Speaker 4: college athletics. I think the NCAAA wants it to be right.
31:38
Speaker 4: The NCAAA wants to get out from under all the
31:41
Speaker 4: steady barrage of antitrust litigation. The NCAAA wants to retain
31:45
Speaker 4: as much authority as it can to regulate college sports
31:49
Speaker 4: and the compensation earned by college athletes. But the NCAAA
31:53
Speaker 4: also desperately wants to avoid the way other major sports
31:57
Speaker 4: enterprises do this, which is by decline daring its athletes employees,
32:02
Speaker 4: and then engaging in some form of collective bargaining.
32:05
Speaker 1: And what do you think about this new system where
32:07
Speaker 1: universities are going to be able to give athletes direct payments?
32:11
Speaker 4: So I think to start, one has to recognize that
32:16
Speaker 4: in its present form, the pursuit of major college sports
32:20
Speaker 4: writ large right, So not just football, right, but football
32:23
Speaker 4: and every other sport a university offers is not necessarily
32:27
Speaker 4: a profit making venture. Only a small percentage of all
32:31
Speaker 4: the Division IE universities actually turn profits through sports. So
32:35
Speaker 4: I think we have to start from that now. I
32:38
Speaker 4: think the reason they do that is in part because
32:41
Speaker 4: sports are among the most effective advertisement vehicles a university
32:45
Speaker 4: can possibly have, Because if your team is on national television,
32:49
Speaker 4: that's three hours of free advertising you get of your
32:52
Speaker 4: institution broadcast in a positive light. So I think that
32:56
Speaker 4: universities are willing to deficit spend to have prominence sports
33:00
Speaker 4: programs because it increases their advertising and public profile. So
33:05
Speaker 4: let me start from that assumption. Now, in a previous
33:10
Speaker 4: world where the NCAA said we cannot pay the athlete,
33:15
Speaker 4: I think an economist would say that doesn't mean that
33:18
Speaker 4: each of these institutions wouldn't keep investing in athletics if
33:23
Speaker 4: they thought it would increase their prominence, and they would
33:28
Speaker 4: put that money where they could get the most bang
33:30
Speaker 4: for their buck. That might be more coaches, or athletic
33:33
Speaker 4: department administrators, all the kinds of positions. Those were the
33:37
Speaker 4: best places to make investments because they couldn't pay the players.
33:40
Speaker 4: Now they can pay the players. It's important to understand
33:44
Speaker 4: the settlement does not say that the universities must pay
33:48
Speaker 4: the players. It's that they may pay the players, and
33:52
Speaker 4: not surprisingly, paying the players may be a more efficient
33:56
Speaker 4: and effective way of increasing the prominence of the sports
34:00
Speaker 4: program then paying another athletic administrator. Right to me, this
34:04
Speaker 4: looks like under the new economic circumstances in which athletic
34:09
Speaker 4: departments are operating, they're simply making rational business decisions about
34:15
Speaker 4: where they can get the most bang for their investment.
34:17
Speaker 1: Buck. It's been a long road to this settlement, and
34:21
Speaker 1: it looks like it's going to be a long road ahead.
34:23
Speaker 1: Thanks so much for being on the show. Fred. That's
34:26
Speaker 1: Professor Alfred jen of Boston College Law School, and that's
34:30
Speaker 1: it for this edition of The Bloomberg Law Show. Remember
34:33
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