Judge Rejects Key Part of N.C.A.A. Antitrust Settlement With Athletes

A federal judge on Thursday rejected a key element of a proposed $2.8 billion settlement of an antitrust lawsuit against the N.C.A.A. and the major athletic conferences, throwing into uncertainty an agreement that had been largely seen as ushering in a new era in college sports.

The judge, Claudia A. Wilken of the Northern District of California, said in a preliminary hearing that she was troubled by a provision that would restrict payments to athletes from booster-run collectives, groups of donors that funnel millions of dollars to athletes at colleges they support.

Although the proposed agreement would allow colleges to pay their athletes up to about $20 million per year, she thought the restriction on collectives would reduce the money some athletes would make under the new deal.

She instructed the parties to go back to the drawing board.

“Some people getting large amounts will no longer be able to get them,” she told lawyers for the N.C.A.A. and the plaintiffs, essentially a group of thousands of athletes, who had come to a compromise in the lawsuit, House v. N.C.A.A. “That’s my concern.”

But Rakesh Kilaru, the N.C.A.A. lawyer, said there would be no deal without a provision that allowed the N.C.A.A. to prohibit third-party payments that they saw as pay-for-play compensation under the guise of fair-market endorsement deals.

“For us, it’s an essential part of the deal,” he said.

Judge Wilken also told Mr. Kilaru and the plaintiffs’ lawyers, Jeffrey Kessler and Steve Berman, to report back to her in three weeks with a revised agreement. If they could not, she said, she would be prepared to set a trial date in the case, which charges that the N.C.A.A. and five major conferences illegally withheld television broadcast revenue that came from using athletes’ names and images.