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Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.

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Speaker 1: The headline is that Musk has your data. That Musk

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Speaker 1: has control of the systems as a Treasury appointee. That

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Speaker 1: is unfathomable. The extraordinary empowerment of billionaire Elon Musk by

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Speaker 1: Donald Trump seems to be the repeating headline. Musk's allies

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Speaker 1: in his Department of Government Efficiency or DOGE, in their

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Speaker 1: attempt to dismantle the federal workforce, orchestrated a physical takeover

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Speaker 1: of the US Agency for International Development, ousting security officials

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Speaker 1: who tried to stop them, and gaining access to the

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Speaker 1: Treasury Department's payment systems that pay out tax refunds, social

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Speaker 1: Security checks, and healthcare reimbursements. What seems to have wrong

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Speaker 1: alarm bells are warnings that DOGE workers now have access

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Speaker 1: to the private financial data of millions of a Marria

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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

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Speaker 1: and others, including the AFL CIO filed a separate suit

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Speaker 1: against DOJE and the Labor Department to stop Elon Musk's

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Speaker 1: people from accessing those systems. Many Democratic members of Congress,

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Speaker 1: like Senator Mark Warner of Virginia and Representative Ayana Presley

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Speaker 1: of Massachusetts, have joined protests this week in DC against

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Speaker 1: Musk and his minions.

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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

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Speaker 2: flows that go out of treasury. The Banking Committee needs

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Speaker 2: to bring up the doose folks who are illegally in

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Speaker 2: Treasury and have them testify. I am so tired of

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Speaker 2: these big billionaire boys in their grabby little hands.

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Speaker 1: So far, the courts have been the only restraint on

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Speaker 1: Musk and the Trump administration. Just today, a DC federal

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Speaker 1: judge placed temporary limits on doja's access, a federal judge

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Speaker 1: in Massachusetts paused the federal worker buyouts, and a Maryland

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Speaker 1: judge indefinitely blocked Trump's effort to do away with birthright citizenship.

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Speaker 1: Joining me is constitutional law expert Harold Krant, a professor

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Speaker 1: at the Chicago Kent College of Law, how it's so

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Speaker 1: difficult to keep track of all the lawsuits against the

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Speaker 1: Trump administration. Today alone, there were four hearings before judges

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Speaker 1: in different states. Does it seem as if Trump is

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Speaker 1: just acting and not worrying about the law or any

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Speaker 1: legal restrictions.

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Speaker 3: In my mind, he's acting with who respects the law,

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Speaker 3: sort of the way he is with expect to foreign

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Speaker 3: policy and the way he did business war, which was

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Speaker 3: to start out dramatically asking for the moon, frightening everybody,

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Speaker 3: and then slowly chipping away at demands. And it's proved

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Speaker 3: effective in business to a large extent. I don't know

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Speaker 3: how effective it'll be with tariffs and other kinds of

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Speaker 3: international relations, and I think it'll be slightly effective with

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Speaker 3: respect to legal challenges as well.

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Speaker 1: Alone, today there were four different hearings in courts based

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Speaker 1: on the lawsuits that have been filed already on some

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Speaker 1: of his orders. Now, I want to start with the

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Speaker 1: empowerment of Elon Musk. He orchestrated a physical takeover of

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Speaker 1: the US Agency for International Development, and also he got

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Speaker 1: access to the US Treasury Department's payment system. Trump did

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Speaker 1: sign an executive order giving Musk's workers unfettered access to

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Speaker 1: government agencies, But as a professor once told me, executive

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Speaker 1: orders are just a piece of paper.

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Speaker 3: Yeah, in so many areas, there's a level of violations

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Speaker 3: of Congressional enactments. Some are more egregious than others, some

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Speaker 3: are subtle. I mean the role of Musk as a

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Speaker 3: special governmental employee at this time is one of those

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Speaker 3: gray areas. Because there is a role for a special

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Speaker 3: governmental employee, they can assume powers for a limited period

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Speaker 3: of time, and so far, obviously Musk has not exceeded that.

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Speaker 3: But in terms of what he's actually done, there appears

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Speaker 3: to be violation costs of the Privacy Act of TURAS

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Speaker 3: of getting access of all those Social Security numbers. That's

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Speaker 3: a pretty good indication. And of course the USAID was

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Speaker 3: set up by Congress, so a presidential order cannot dismantle

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Speaker 3: an agency that's been chartered by Congress. So I think

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Speaker 3: there's a spectrum of action. Some appear to be clearly unconstitutional,

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Speaker 3: like the birthright Citizenship Order. Some are closer in question.

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Speaker 3: There's another lawsuit that was stiled this morning, I believe

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Speaker 3: against Chicago or is Sanctuary's city policies. I think it's

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Speaker 3: a closer call in terms of where you draw the line.

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Speaker 3: So there's just a lot that's being thrown up against

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Speaker 3: the wall. But some have some merit, and it's going

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Speaker 3: to take a while for the courts to unravel that

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Speaker 3: we haven't mentioned yet, the whole challenge to the questions

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Speaker 3: about the independent agencies, since he's fired a member of

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Speaker 3: the National Labor Relations Board, which is an independent agency

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Speaker 3: that I think has a chance of success, and it's

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Speaker 3: ultimately Supreme Court, given what the Supreme Court has said previously.

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Speaker 3: But whether Trump then can take the next step and

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Speaker 3: try to get rid of civil service, I'm far more

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Speaker 3: dubious about that.

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Speaker 1: So for the first time a judge has placed limits

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Speaker 1: on Doge. He temporarily limited access to the Treasury Department's

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Speaker 1: payment system after a group of unions accused the agency

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Speaker 1: of illegally sharing their members information with Elon Musk Government

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Speaker 1: Efficiency Group. If there are people within the administration willing

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Speaker 1: to work with him, it seems like it's hard to

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Speaker 1: stop him.

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Speaker 3: I agree. I mean, if he's working clearly with the

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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

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Speaker 3: is if there is a pretty clear congressional sort of

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Speaker 3: framework and give it. Despite analogy and Trump fire Inspectors General, well,

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Speaker 3: Congress has a structure in place that allows for dismissal

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Speaker 3: of the spector generals, but Trump didn't follow it. So

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Speaker 3: in that sense, obviously the resort is to court, and

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Speaker 3: I think it's clear that the court turned back those dismissals,

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Speaker 3: at least temporarily, in order to force worstmenions to comply

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Speaker 3: with the congressional structure. And so, you know, again we'll

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Speaker 3: have to wait see things play out. But I think

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Speaker 3: what's really frightening is not just that the Doge got

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Speaker 3: the private information. The question is what do they really

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Speaker 3: want to do with it. Do they really want to

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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

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Speaker 3: all have personal identifiers, and that must people may be

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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.

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Speaker 3: We're not there yet, but that is at least one

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Speaker 3: step of the way.

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Speaker 1: So you mentioned usaid. They asked Trump, they said, don't

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Speaker 1: you need congressional approval? He said, I don't think so.

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Speaker 1: There are plans apparently to dismantle the Education Department, congressional

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Speaker 1: approval is required. If Congress doesn't object, or if they say, oh,

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Speaker 1: well we're folding it into this Department of State, will

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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.

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Speaker 3: We saw that in the President Nixon's era, and we're

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Speaker 3: going to see that again. I'm sure with President Trump.

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Speaker 3: If somebody who said they would have gotten money would

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Speaker 3: have gotten the benefit, but for the actions of the

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Speaker 3: administration to fold in the Education Department, there's something else,

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Speaker 3: or hold in Usaid into the State Department or somewhere else.

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Speaker 3: They would say, look, we were on a track to

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Speaker 3: receive money and get these benefits, and but for the

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Speaker 3: president's actions not receiving the money. And sometimes there's a

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Speaker 3: standing problem there to show how close that link is.

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Speaker 3: But again, it's been made with empownment in the past,

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Speaker 3: and I think if you will likely be made with

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Speaker 3: respect to education and Usaid as well. And so those

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Speaker 3: cases will get to court.

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Speaker 1: Ultimately, Trump has launched a full scale assault on the

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Speaker 1: federal world. So this offer was made. It was called

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Speaker 1: a buyout offer, but it's not really a buyout offer

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Speaker 1: for federal workers to resign and then they would get

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Speaker 1: paid through September. Now there's a problem with this because

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Speaker 1: there is a law about how long it can be

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Speaker 1: on administrative leave. But also the government hasn't been funded

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Speaker 1: past March fourteenth, so there are all kinds of problems

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Speaker 1: with this. Yet federal workers, you know, something like forty

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Speaker 1: or fifty thousand have said they'll take the offer, even

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Speaker 1: though unions have advised against it.

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Speaker 3: On this level, I think that the action adminisation that's

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Speaker 3: probably legal, just like any other kind of buyout. And

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Speaker 3: guess there are issues about what happens if funding drives

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Speaker 3: out in terms of paying these settlements, and maybe they'll

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Speaker 3: be able to use some of the money from somewhere

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Speaker 3: else to pay the settlements going forward. That part is

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Speaker 3: obviously unclear. That the idea in sake of saying to

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Speaker 3: a federal employee, you have a right under civil service

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Speaker 3: to continue your job, but we will give you an

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Speaker 3: insensive to leave early, and some of them were planning

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Speaker 3: to leave anyway, I think that probably is closer to

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Speaker 3: the legal line in comparison to some of the other

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Speaker 3: moves the administration has been making.

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Speaker 1: Now, this was one of the hearings in Massachusetts today,

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Speaker 1: a federal judge paused the deadline for that so called

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Speaker 1: buyout program because unions representing more than eight hundred thousand

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Speaker 1: federal workers asked the judge to halt the program. So

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Speaker 1: there's going to be another hearing at two pm on Monday.

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Speaker 3: Yeah, I mean, I think there are questions of again,

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Speaker 3: is this can you bind the federal government to pay

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Speaker 3: make these payments when there is not continuing funding for

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Speaker 3: the government. That raises an issue, you know, I think

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Speaker 3: that lots of issues are contingent upon continual funding by

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Speaker 3: the government and that hitting the debt, fealing, et cetera.

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Speaker 3: So I mean, maybe there are some procedural issues that

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Speaker 3: I'm not aware of that the court will look to

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Speaker 3: to try to stop the buyout. But again, in comparison

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Speaker 3: to the other moves that we've been seeing in terms

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Speaker 3: of discharge of general, of the discharge of the head

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Speaker 3: of an OLRB, that's dismantling of AID, I think this

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Speaker 3: is far less concerning than some of the other in

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Speaker 3: my mind, than some of the other moves that Trump

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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

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Speaker 1: being questioned in the courts. Remember, you can always get

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Speaker 1: the latest legal news by listening to our Bloomberg Law

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Speaker 1: podcast wherever you get your favorite podcasts. I'm Jim Grosso

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Speaker 1: and you're listening to Bloomberg. Donald Trump is attempting to

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Speaker 1: expand presidential power by asserting authority over US citizenship, federal spending,

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Speaker 1: and the government workforce, to name a few. Is Trump

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Speaker 1: daring judges to stop him from asserting vast author Some

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Speaker 1: of his early moves have already led to lawsuits, and

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Speaker 1: in most cases so far, federal judges have put the

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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

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Speaker 1: let's turn to that order freezing federal grants, loans, and

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Speaker 1: financial assistance, which caused chaos across the country, and the

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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

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Speaker 1: this shows that judges, some of them, are looking behind

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Speaker 1: what's happening, because judges are going forward with hearings despite

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Speaker 1: the fact that the Trump administration said the memo was

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Speaker 1: rescinded Democratic Attorney's General file suit, and today they said

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Speaker 1: in court that state agencies were still having difficulty accessing

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Speaker 1: federal funds they were entitled to. Rhode Island Judge John McConnell,

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Speaker 1: who had issued a temporary restraining order, said that he

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Speaker 1: believed his order was clear and he stood ready to

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Speaker 1: enforce the plain language of his order. He scheduled of

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Speaker 1: February twenty first hearing on whether he should issue a

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Speaker 1: longer preliminary injunction. It seems to be pretty clear that

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Speaker 1: Trump can't freeze funding unilaterally.

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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

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Speaker 3: are issues, though, that the court is well situated to

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Speaker 3: continue the case because for two reasons. One you mentioned

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Speaker 3: is that it's not clear that Trumps really has lifted

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Speaker 3: the order on freeze of the funds, and the reports

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Speaker 3: are coming out that some funds are getting out and

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Speaker 3: some funds are not. But secondly, it can be repeated,

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Speaker 3: and so this is the kind of question of there's

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Speaker 3: no moonness here because it's so readily apparent that Trump

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Speaker 3: may freeze and this lead and to freeze other kinds

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Speaker 3: of appropriated funds from Congress, so that the issue we

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Speaker 3: owns alive and well. And so I think the courts

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Speaker 3: will continue the cases they should, and they will ultimately

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Speaker 3: conclude that this is absolutely unconstitutional.

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Speaker 1: Except for the courts, it seems to be clear sailing

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Speaker 1: for Trump because he doesn't have any opposition in Congress

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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

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Speaker 3: going to come from nowhere or are they going to

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Speaker 3: come from the Court or from Congress ultimately? And members

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Speaker 3: of the Republican of Congress kindly going to say, you know,

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Speaker 3: we were elected to do an independent job, and the

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Speaker 3: President has taken away our legislative authority. We don't know

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Speaker 3: where the guard rules are going to come. And we

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Speaker 3: just have to hope that one of those two branches

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Speaker 3: will be able to step up and limit some of

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Speaker 3: the cruder moves that the administration is already taken.

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Speaker 1: As far as courts, the Supreme Court, in a controversial decision,

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Speaker 1: gave Trump sweeping immunity from criminal prosecution at the end

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Speaker 1: of last term. Also, the Conservatives believe in this unitary executive.

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Speaker 1: They're also trying to cut back on agency power repeatedly.

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Speaker 1: So what do you think will the Supreme Court be

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Speaker 1: supportive of Trump? They were not in his last term,

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Speaker 1: but they were this last year.

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Speaker 3: Well, absolutely, I mean I think that I think the

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Speaker 3: Community decision is a one off. It's a terrible decision,

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Speaker 3: but I don't think it has for what the Court

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Speaker 3: will do in the future. But the Court has adopted,

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Speaker 3: as you mentioned, the form of the unitary executive authility,

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Speaker 3: which means the president should be able to fire any

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Speaker 3: policy maker at will in order to make sure that

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Speaker 3: all actions that are final of the government can be

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Speaker 3: traced to the president. So I would not be surprised

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Speaker 3: if the Court is sympathetic with respect to giving the

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Speaker 3: power to the president to fire agency head officials, including

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Speaker 3: most frighteningly the head of the FED, because that's just

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Speaker 3: another type of policy that's being administered by a right now,

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Speaker 3: an independent agency head. But I don't think that even

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Speaker 3: if the Supreme Court takes that step, they will expand

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Speaker 3: enough to the unitary to say that the civil service

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Speaker 3: is an unconstitutional Many unions right now public employee beings

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Speaker 3: are very concerned that the next objective of the Trump

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Speaker 3: administration will put the civil service in the cross ears.

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Speaker 3: And I think the court will be sympathetic to the

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Speaker 3: principles under civil service. But that's that's true.

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Speaker 1: You also have this moved by the Justice Department to

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Speaker 1: ferret out any employees of the FBI, whether they're whether

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Speaker 1: they're file clerks or special agents, to find out whether

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Speaker 1: they worked on any January sixth cases or any of

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Speaker 1: the criminal investigations into Trump. I mean, it seems like

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Speaker 1: a campaign of retribution that Trump has promised in an

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Speaker 1: opening salvo. The agents are suing the Justice Department to

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Speaker 1: try to stop their name and information from being disseminated

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Speaker 1: to the public, exposing them to retribution from in particular

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Speaker 1: the January sixth defendants whom Trump pardoned. And now the

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Speaker 1: new Attorney General, Pam Bondi, despite what she testified to

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Speaker 1: in her confirmation hearings about not seeking retribution, has announced

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Speaker 1: a new working group to examine past weaponization of the

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Speaker 1: Justice Department to review activities over the past four years

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Speaker 1: for instances where conduct appears to have been designed to

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Speaker 1: achieve political objectives, including of course, criminal probes into Donald Trump.

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Speaker 1: It would also target unethical prosecutions related to January sixth,

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Speaker 1: so much for her testimony.

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Speaker 3: It's out rageous. I mean, obviously this is just vindictive,

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Speaker 3: it's vengeance. There is no basis in law for this

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Speaker 3: kind of witch hunt, including by the way Line prosecutors

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Speaker 3: who ordered to investigate and FBI agents who are ordered

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Speaker 3: to investigate the writers on January sixth, and now they're

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Speaker 3: being drummed out of the government. I mean, this is

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Speaker 3: just petty, vindictive moves by the administration that's kind of hateful.

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Speaker 3: On the other hand, most of these probably all of them,

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Speaker 3: do not have any kind of protection from at well

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Speaker 3: employment and these employees, and therefore that's one of the

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Speaker 3: great illustration of why protection from at plenary muval authority

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Speaker 3: are so important, because you can become then victimized in

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Speaker 3: this vindictive, petty way.

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Speaker 1: I mean, let's face it. On day one, he issued

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Speaker 1: all these executive orders which were clearly unlawful, and one

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Speaker 1: executive order directed the Attorney General not to enforce the

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Speaker 1: law that Congress had passed requiring TikTok to be sold

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Speaker 1: by its Chinese parent company or face a US ban.

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Speaker 1: So Attorney General don't enforce the law. Has Congress, has

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Speaker 1: the legislative branch just given up too much of its

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Speaker 1: authority over the years.

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Speaker 3: Yeah, I mean, I think that that is a great illustration,

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Speaker 3: and it's not the most important policy issue in terms

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Speaker 3: of TikTok, whether it be divested or not. But Congress,

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Speaker 3: for good or evil, passed a statute that said TikTok

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Speaker 3: atopy doves is by mid January. That deadline went and passed,

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Speaker 3: and the President said, I don't care what Congress said,

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Speaker 3: I'm not ready to enforce the ban. I mean, obviously

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Speaker 3: the president can always not enforce things in terms of

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Speaker 3: saying I don't have the resources to investigate and right

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Speaker 3: now and to prosecute tact for not a body and

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Speaker 3: by Congress disorder. But instead of doing that quietly, President

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Speaker 3: Trump just made announcements like I don't fee what Congress says,

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Speaker 3: and that's just really destructive of our separation of powers,

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Speaker 3: our checks and balances. And again, at some point one

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Speaker 3: can hope the members of Congress President's own party will say,

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Speaker 3: don't know, we have to respect the checks and balances

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Speaker 3: in our constitution. But that's not going to come anytime soon,

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Speaker 3: I fear.

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Speaker 1: But it just seem like, it seems like at this level,

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Speaker 1: at the district court level, that so far his orders

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Speaker 1: or you know, his moves are being stopped temporarily stops,

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Speaker 1: you know, temporary injunctions tros by the judges.

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Speaker 3: Yeah, I mean, courts are taking the responsibility seriously and

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Speaker 3: most do. And I think we'll see a lot of

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Speaker 3: pushback from the Trump administration in the courts, and ultimately

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Speaker 3: we'll have to see what the Supreme Court does and

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Speaker 3: whether the Trump administration decides to a body buy what

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Speaker 3: lower courts than the Supreme Court orders were not there yet,

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Speaker 3: but I'm sure that day is coming, and I'm.

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Speaker 1: Sure you're right. Thanks so much, Hal. That's Professor Harold

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Speaker 1: Krent of the Chicago Kent College of Law coming up

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Speaker 1: the ncaaa's proposed settlement encounters problems. I'm June Grosso. When

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Speaker 1: you're listening to Bloomberg, some current and former college athletes

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Speaker 1: are raising objections as a judge weighs a deal that

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Speaker 1: would require the NCAAA to pay two point eight billion

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Speaker 1: dollars in damages for past restrictions on athlete compensation. More

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Speaker 1: than a dozen objections were filed in court, with some

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Speaker 1: of them taking issue with a deal provision that will

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Speaker 1: send most of the settlement proceeds to male athletes, claiming

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Speaker 1: the deal discounted Title nine regulations. Joining me is Alfred

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Speaker 1: jen a professor of law at Boston College Law School,

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Speaker 1: tell us about this two point eight billion dollar deal NCAAA,

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Speaker 1: So start by just telling us about this for those

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Speaker 1: who don't know what this two point eight billion dollar

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Speaker 1: settlement is about.

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Speaker 4: As you know, for many years, the NCAAA has taken

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Speaker 4: the position that an athlete would lose his or her

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Speaker 4: eligibility if she earned compensation of any sort because of

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Speaker 4: her status as an athlete. So that would include direct

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Speaker 4: payments from the university like salary, and it would include

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Speaker 4: endorsement deals as well, so if you've got a clothing

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Speaker 4: deal with Nike or something like that. And so for years,

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Speaker 4: athletes forewent all of those things and did not earn

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Speaker 4: any money. The NCAAA then got sued in a case

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Speaker 4: called a House versus NCAAA, that's why it's called the

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Speaker 4: House Settlement, contending that the NCAAA rules prohibiting athletes from

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Speaker 4: earning money through so called name, image, and likeness deals

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Speaker 4: so effectively endorsement deals was a violation of the anti

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Speaker 4: trust law, and the NCAAA is agreeing to settle although

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Speaker 4: the settlement has not yet been approved, these anti trust

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Speaker 4: claims with a fairly large number of current and former

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Speaker 4: athletes for a sum of money that comes to the

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Speaker 4: sum that you mentioned.

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Speaker 1: There are numerous challenges to this settlement, and a big

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Speaker 1: issue seems to be that the provision will send most

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Speaker 1: of the settlement proceeds to mail athletes.

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Speaker 4: Yes, that is one of three most prominent objections that

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Speaker 4: have been made. There are two kinds of payments that

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Speaker 4: will be made as a result of the settlement. One

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Speaker 4: is straight damages, so, in other words, because you were

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Speaker 4: an athlete or you are an athlete and your earning

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Speaker 4: potential has been restrained by the NCAA, we will give

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Speaker 4: you a sum of money to settle your anti trust

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Speaker 4: claim against us. The second kind of payment that will

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Speaker 4: be made is that the NCAA and it has agreed

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Speaker 4: to permit its member institutions to make payments directly to athletes,

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Speaker 4: so called revenue sharing payments. And these are payments that

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Speaker 4: could total as much as a little over twenty million

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Speaker 4: dollars per institution, So that money would go to people

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Speaker 4: who are athletes starting in the twenty five to twenty

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Speaker 4: six academic year and continue on, at least in theory, indefinitely.

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Speaker 4: Once you have a big bag of money like that,

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Speaker 4: whether it's Type A or Type B, the question becomes, well,

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Speaker 4: how do we know how much each athlete will get?

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Speaker 4: And the idea behind the settlement is that men's football,

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Speaker 4: and then men's and women's basketball will get much larger

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Speaker 4: disproportionate shares than athletes in any other sport. And so,

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Speaker 4: of course, because football is played almost one hundred percent

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Speaker 4: by men in college, a huge amount of the money

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Speaker 4: goes to men.

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Speaker 1: Does that pose a problem with titlelind gender equity laws?

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Speaker 4: Well, it could be. So this is an area where

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Speaker 4: I don't think we actually know for sure what the

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Speaker 4: answer is. So let me work with the payments being

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Speaker 4: made by the universities, the so called revenue sharing payments.

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Speaker 4: Just to give you our listeners a bit of a

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Speaker 4: conceptual idea of why this is so difficult. So the

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Speaker 4: university is going to give money to athletes, what do

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Speaker 4: we think that money represents. One possibility is we could

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Speaker 4: think of it, if you will, as a scholarship enhancement.

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Speaker 4: You're already a scholarship athlete at Notre Dame University, right,

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Speaker 4: and we're just going to enhance the amount of money

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Speaker 4: we give to you as a scholarship. One way we

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Speaker 4: could think about it. Another way we could think about

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Speaker 4: it is these are wages. It's as if you got

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Speaker 4: a job as a research assistant or working in the

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Speaker 4: dining hall or something like this. Scholarship money. It's money

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Speaker 4: you earn for your labor. Okay. The reason that this

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Speaker 4: could make such a big difference from the standpoint of

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Speaker 4: Title nine is that the fairly consistent interpretation of Title

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Speaker 4: nine by the federal government is that men and women

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Speaker 4: have to receive identical scholarship assistance. You can't say we

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Speaker 4: have bigger scholarships for men and smaller scholarships for women,

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Speaker 4: roughly speaking, And so if we thought of these payments

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Speaker 4: as a form of scholarship enhancement, then the answer would

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Speaker 4: be that's right. If male players are getting one hundred

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Speaker 4: and fifty thousand dollars a year scholarship enhancement, so would

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Speaker 4: female players have to get one hundred fifty thousand dollars

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Speaker 4: a year in enhancement scholarship. Conversely, if we thought about

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Speaker 4: these as jobs. It is not the case that all

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Speaker 4: the jobs at a university pay men and women exactly

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Speaker 4: the same wage. Depending on the job you have, you

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Speaker 4: might be paid more or less, and in some cases

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Speaker 4: women might make less than men, and in some cases

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Speaker 4: possibly the reverse. But if that were the case, then

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Speaker 4: one might say, well, we pay football players more than

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Speaker 4: we pay swimmers, and so we could see how that

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00:27:10,840 --> 00:27:14,159
Speaker 4: might be less of an issue under Title nine. We

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Speaker 4: do not know how the courts think about this. In

437
00:27:17,359 --> 00:27:21,280
Speaker 4: the waning days of the Biden administration, the Biden administration

438
00:27:21,840 --> 00:27:25,720
Speaker 4: issued in opinion which effectively took the position that these

439
00:27:26,040 --> 00:27:30,399
Speaker 4: enhanced revenues would be a form akin to enhanced scholarship payment.

440
00:27:30,680 --> 00:27:32,880
Speaker 4: But of course we don't know if the new administration

441
00:27:32,960 --> 00:27:34,840
Speaker 4: is going to persist with this interpretation.

442
00:27:35,359 --> 00:27:37,840
Speaker 1: What are some of the other possible problems you see

443
00:27:37,920 --> 00:27:38,680
Speaker 1: with the settlement?

444
00:27:39,160 --> 00:27:44,160
Speaker 4: I think the other big problem with the settlement is, well,

445
00:27:44,240 --> 00:27:47,239
Speaker 4: let me divide it again into two parts. Okay, So

446
00:27:47,400 --> 00:27:51,480
Speaker 4: first there is the problem of exactly whose rights are

447
00:27:51,560 --> 00:27:56,040
Speaker 4: bound by the settlement. So you have an identified class

448
00:27:56,040 --> 00:27:58,600
Speaker 4: of people, let's say, a group of current and former

449
00:27:58,680 --> 00:28:02,320
Speaker 4: athletes who can say they were damaged by the ncaaa's

450
00:28:02,320 --> 00:28:07,400
Speaker 4: allegedly illegal practices, and they're going to get a check. Now. Normally,

451
00:28:07,480 --> 00:28:11,120
Speaker 4: when a case settles, the people who are class members

452
00:28:11,400 --> 00:28:15,200
Speaker 4: release all of their claims to sue against the defendant,

453
00:28:15,560 --> 00:28:19,560
Speaker 4: and that's what happened between these class members. However, the

454
00:28:20,000 --> 00:28:23,359
Speaker 4: revenue payments going forward, the ones that we talked about

455
00:28:23,400 --> 00:28:26,960
Speaker 4: just a few moments ago, are not necessarily going to

456
00:28:27,000 --> 00:28:31,400
Speaker 4: be paid to current class members. For example, let's suppose

457
00:28:31,400 --> 00:28:34,080
Speaker 4: that you are an athlete now and you're fifteen years old,

458
00:28:34,119 --> 00:28:36,720
Speaker 4: and you're not going to play for a Division one

459
00:28:36,880 --> 00:28:40,040
Speaker 4: university until what three or four years from now? Right,

460
00:28:41,040 --> 00:28:44,000
Speaker 4: you would get those revenue sharing payments. They would be

461
00:28:44,160 --> 00:28:48,120
Speaker 4: capped at the limit prescribed by the settlement. But how

462
00:28:48,160 --> 00:28:52,240
Speaker 4: do we know that as to that person that salary cap,

463
00:28:52,600 --> 00:28:56,960
Speaker 4: that cap on payments is in fact legal. You can't say, well,

464
00:28:57,000 --> 00:28:59,160
Speaker 4: you waived your claims to sue for anti trust law

465
00:28:59,240 --> 00:29:02,080
Speaker 4: under the lawsuit, because that person wasn't a member of

466
00:29:02,120 --> 00:29:05,800
Speaker 4: the class in this litigation. So that's one problem, right,

467
00:29:05,920 --> 00:29:10,080
Speaker 4: is can you bind future athletes to the terms of

468
00:29:10,080 --> 00:29:13,240
Speaker 4: the settlement. That's just a mechanical problem, which I don't

469
00:29:13,480 --> 00:29:16,200
Speaker 4: think anyone really knows. The answer to yet, But my

470
00:29:16,320 --> 00:29:20,040
Speaker 4: intuition is you cannot. They never signed away their right. Now,

471
00:29:20,120 --> 00:29:22,920
Speaker 4: if those people have never signed away their right, then

472
00:29:22,960 --> 00:29:27,000
Speaker 4: comes again the question. Is the NCAAA entitled to have

473
00:29:27,080 --> 00:29:32,080
Speaker 4: a rule that limits the compensation its athletes received. That

474
00:29:32,160 --> 00:29:36,000
Speaker 4: would appear to be an add trust violation, a form

475
00:29:36,040 --> 00:29:39,320
Speaker 4: of price fixing, if you will. So, I think that

476
00:29:39,320 --> 00:29:44,120
Speaker 4: that's a fairly furious complication to this settlement, and I

477
00:29:44,200 --> 00:29:47,720
Speaker 4: am frankly somewhat skeptical that the parties have it worked

478
00:29:47,760 --> 00:29:51,440
Speaker 4: out well enough. This could come apart later on well.

479
00:29:51,480 --> 00:29:55,760
Speaker 1: The Justice Department also weighed in under the previous administration,

480
00:29:56,120 --> 00:30:00,520
Speaker 1: questioning whether that proposed cap on revenue sharing aimans to

481
00:30:00,640 --> 00:30:05,800
Speaker 1: athletes violates antitrust law. The NCAA said in a statement,

482
00:30:05,920 --> 00:30:09,760
Speaker 1: we believe the objections raise issues that will already considered

483
00:30:09,760 --> 00:30:13,000
Speaker 1: as part of the preliminary approval process. And a judge

484
00:30:13,080 --> 00:30:17,720
Speaker 1: did give preliminary approval to the deal. So there's another

485
00:30:17,800 --> 00:30:21,680
Speaker 1: hearing schedule for April seventh. But most people seem to

486
00:30:21,680 --> 00:30:23,880
Speaker 1: think that she's going to approve the deal.

487
00:30:24,400 --> 00:30:27,560
Speaker 4: Again, we get into the whole crystal ball question. In

488
00:30:27,640 --> 00:30:30,520
Speaker 4: a conventional case, I might say that that makes sense yeah,

489
00:30:30,600 --> 00:30:33,240
Speaker 4: the preliminary approval is a strong indication of what might

490
00:30:33,280 --> 00:30:37,320
Speaker 4: happen with the federal government weighing in with some of

491
00:30:37,360 --> 00:30:40,600
Speaker 4: the problems that I've mentioned. I would not be shocked

492
00:30:40,640 --> 00:30:43,080
Speaker 4: if she said either I don't approve the deal or

493
00:30:43,680 --> 00:30:47,600
Speaker 4: I want another round of modifications before I will approve

494
00:30:47,640 --> 00:30:49,640
Speaker 4: the deal. I think that those are within the realm

495
00:30:49,680 --> 00:30:50,480
Speaker 4: of possibility.

496
00:30:50,560 --> 00:30:53,560
Speaker 1: Even if this is signed, it doesn't end things because

497
00:30:54,320 --> 00:30:58,000
Speaker 1: there are other lawsuits that have been filed. There's one

498
00:30:58,080 --> 00:31:01,760
Speaker 1: file by about seventy athletes let who opted out of

499
00:31:01,760 --> 00:31:04,840
Speaker 1: the settlement. Those have to go forward. What will this

500
00:31:04,920 --> 00:31:06,640
Speaker 1: really settle then, Well, I.

501
00:31:06,560 --> 00:31:08,960
Speaker 4: Think that this is the question that many observers have,

502
00:31:09,080 --> 00:31:12,000
Speaker 4: which is, as a technical matter, this can only be

503
00:31:12,080 --> 00:31:15,080
Speaker 4: a settlement between the NCAAA and the people who choose

504
00:31:15,120 --> 00:31:18,720
Speaker 4: to opt into this settlement. Everybody who chooses to opt out,

505
00:31:19,320 --> 00:31:21,600
Speaker 4: everybody who was never a member of the class in

506
00:31:21,640 --> 00:31:25,800
Speaker 4: the first place, Their legal rights have not been adjudicated

507
00:31:25,880 --> 00:31:29,120
Speaker 4: or settled away. I don't understand how this is a

508
00:31:29,200 --> 00:31:33,760
Speaker 4: permanent solution as a legal matter to the state of

509
00:31:33,880 --> 00:31:38,280
Speaker 4: college athletics. I think the NCAAA wants it to be right.

510
00:31:38,320 --> 00:31:40,959
Speaker 4: The NCAAA wants to get out from under all the

511
00:31:41,000 --> 00:31:45,360
Speaker 4: steady barrage of antitrust litigation. The NCAAA wants to retain

512
00:31:45,400 --> 00:31:49,320
Speaker 4: as much authority as it can to regulate college sports

513
00:31:49,400 --> 00:31:53,440
Speaker 4: and the compensation earned by college athletes. But the NCAAA

514
00:31:53,480 --> 00:31:57,440
Speaker 4: also desperately wants to avoid the way other major sports

515
00:31:57,600 --> 00:32:02,280
Speaker 4: enterprises do this, which is by decline daring its athletes employees,

516
00:32:02,320 --> 00:32:04,880
Speaker 4: and then engaging in some form of collective bargaining.

517
00:32:05,520 --> 00:32:07,400
Speaker 1: And what do you think about this new system where

518
00:32:07,560 --> 00:32:11,000
Speaker 1: universities are going to be able to give athletes direct payments?

519
00:32:11,920 --> 00:32:15,320
Speaker 4: So I think to start, one has to recognize that

520
00:32:16,160 --> 00:32:20,280
Speaker 4: in its present form, the pursuit of major college sports

521
00:32:20,680 --> 00:32:23,840
Speaker 4: writ large right, So not just football, right, but football

522
00:32:23,880 --> 00:32:27,520
Speaker 4: and every other sport a university offers is not necessarily

523
00:32:27,560 --> 00:32:31,360
Speaker 4: a profit making venture. Only a small percentage of all

524
00:32:31,360 --> 00:32:35,760
Speaker 4: the Division IE universities actually turn profits through sports. So

525
00:32:35,800 --> 00:32:38,280
Speaker 4: I think we have to start from that now. I

526
00:32:38,320 --> 00:32:41,440
Speaker 4: think the reason they do that is in part because

527
00:32:41,480 --> 00:32:45,719
Speaker 4: sports are among the most effective advertisement vehicles a university

528
00:32:45,760 --> 00:32:49,240
Speaker 4: can possibly have, Because if your team is on national television,

529
00:32:49,280 --> 00:32:52,320
Speaker 4: that's three hours of free advertising you get of your

530
00:32:52,360 --> 00:32:56,080
Speaker 4: institution broadcast in a positive light. So I think that

531
00:32:56,240 --> 00:33:00,280
Speaker 4: universities are willing to deficit spend to have prominence sports

532
00:33:00,320 --> 00:33:05,560
Speaker 4: programs because it increases their advertising and public profile. So

533
00:33:05,960 --> 00:33:10,200
Speaker 4: let me start from that assumption. Now, in a previous

534
00:33:10,240 --> 00:33:14,880
Speaker 4: world where the NCAA said we cannot pay the athlete,

535
00:33:15,120 --> 00:33:18,160
Speaker 4: I think an economist would say that doesn't mean that

536
00:33:18,280 --> 00:33:23,520
Speaker 4: each of these institutions wouldn't keep investing in athletics if

537
00:33:23,560 --> 00:33:28,040
Speaker 4: they thought it would increase their prominence, and they would

538
00:33:28,120 --> 00:33:30,560
Speaker 4: put that money where they could get the most bang

539
00:33:30,640 --> 00:33:33,600
Speaker 4: for their buck. That might be more coaches, or athletic

540
00:33:33,680 --> 00:33:36,960
Speaker 4: department administrators, all the kinds of positions. Those were the

541
00:33:37,000 --> 00:33:40,280
Speaker 4: best places to make investments because they couldn't pay the players.

542
00:33:40,800 --> 00:33:44,640
Speaker 4: Now they can pay the players. It's important to understand

543
00:33:44,720 --> 00:33:48,200
Speaker 4: the settlement does not say that the universities must pay

544
00:33:48,240 --> 00:33:52,800
Speaker 4: the players. It's that they may pay the players, and

545
00:33:52,920 --> 00:33:56,360
Speaker 4: not surprisingly, paying the players may be a more efficient

546
00:33:56,800 --> 00:34:00,479
Speaker 4: and effective way of increasing the prominence of the sports

547
00:34:00,520 --> 00:34:04,720
Speaker 4: program then paying another athletic administrator. Right to me, this

548
00:34:04,800 --> 00:34:09,280
Speaker 4: looks like under the new economic circumstances in which athletic

549
00:34:09,360 --> 00:34:15,240
Speaker 4: departments are operating, they're simply making rational business decisions about

550
00:34:15,520 --> 00:34:17,880
Speaker 4: where they can get the most bang for their investment.

551
00:34:17,920 --> 00:34:21,400
Speaker 1: Buck. It's been a long road to this settlement, and

552
00:34:21,440 --> 00:34:23,560
Speaker 1: it looks like it's going to be a long road ahead.

553
00:34:23,640 --> 00:34:26,239
Speaker 1: Thanks so much for being on the show. Fred. That's

554
00:34:26,239 --> 00:34:30,680
Speaker 1: Professor Alfred jen of Boston College Law School, and that's

555
00:34:30,719 --> 00:34:33,360
Speaker 1: it for this edition of The Bloomberg Law Show. Remember

556
00:34:33,400 --> 00:34:35,480
Speaker 1: you can always get the latest legal news on our

557
00:34:35,480 --> 00:34:39,640
Speaker 1: Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,

558
00:34:39,840 --> 00:34:44,880
Speaker 1: and at www dot Bloomberg dot com, slash podcast Slash Law,

559
00:34:45,280 --> 00:34:47,880
Speaker 1: And remember to tune into The Bloomberg Law Show every

560
00:34:47,920 --> 00:34:51,800
Speaker 1: weeknight at ten pm Wall Street Time. I'm June Grosso

561
00:34:51,960 --> 00:34:53,560
Speaker 1: and you're listening to Bloomberg