Settlement could cost NCAA nearly $3 billion; plan to pay athletes would need federal protection
SCOTTSDALE, Ariz. — The NCAA and major college conferences are considering a possible settlement of an antitrust lawsuit that could cost them billions in damages and force schools to share athletics revenue with their athletes.
But even if elite athletic leaders were to create a new, more professional model for collegiate athletics, they would likely need help from Congress if athletes are not classified as employees.
Two people familiar with settlement discussions related to House vs. the NCAA told the AP on Friday that the association could pay out $2.9 billion in damages over 10 years to resolve the class action lawsuit — which is set to go to trial in January. Schools in the Big Ten, Big 12, Atlantic Coast Conference and Southeastern Conference could be on the hook for about $30 million a year, with about $20 million a year going to their athletes.
The people, speaking on condition of anonymity because settlement negotiations were not made public, emphasized that a deal is far from being finalized. Terms of any agreement must still be approved by the NCAA board of governors and the presidential councils of each of the four conferences.
Yahoo Sports and ESPN first reported details of the potential settlement agreement.
U.S. District Judge Claudia Wilken, who has already ruled on several high-profile antitrust cases against the NCAA in the Northern District of California, ordered the parties months ago to try to settle the case. A more developed plan emerged last week at a meeting of NCAA and conference officials in Dallas.
Earlier this week, Big 12 Commissioner Brett Yormark declined to discuss anything related to a potential settlement or the Dallas meeting while speaking to reporters after his conference meetings in Arizona concluded.
There is a tacit recognition among many college athletic administrators that a settlement with House is the best course of action. The case, brought by former Arizona State swimmer Grant House, argues that college athletes should receive a cut of the billions of dollars in media rights fees that go to the power conferences and the NCAA, dating back to 2016.
The NCAA faces several other antitrust challenges over compensation and transfer rules, but House has become a catalyst for action.
In an earlier filing, attorneys for the NCAA and the conferences argue that damages in House will be $1.4 billion, although in successful antitrust cases the damages will be tripled.
The NCAA and college athletic leaders have been seeking help from Congress in the form of a federal law to regulate NIL compensation for years, but there has been little movement on that front.
More recently, the emphasis of NCAA President Charlie Baker and others has shifted to trying to prevent college athletes from being considered employees.
Even with a settlement in the House of Representatives and a revenue-sharing plan, the NCAA and the major conferences could still need federal law or antitrust protection to prevent more challenges.
There is also a separate antitrust lawsuit in Pennsylvania over employment status.
“In terms of their legal options, one is to go to Congress, two is to recognize the athletes as employees and enter into collective bargaining agreements, the other is to try to operate in a way that is more defensible under the law,” says Tulane. said law professor Gabe Feldman. “The door is still open to reinvent itself to either withstand lawsuits or gain more support for congressional intervention.”
Feldman said a federal law that denies employment status to college athletes could face a lawsuit without the NCAA and conferences being granted an antitrust waiver by Congress.
“It’s difficult to ask Congress to protect something that so many consider exploitative,” Feldman said.
A recent ruling by a regional director of the National Labor Relations Board cleared the way for members of the Dartmouth men’s basketball team to vote to unionize. The school is contesting this decision.
Some sort of revenue-sharing agreement or significantly higher payments to college athletes on top of scholarships seems inevitable.
Baker himself proposed in December creating a new Division I level in which schools would be required to pay at least half of their athletes $30,000 a year in trust funds. Baker also encouraged schools to bring NIL activities in-house for athletes rather than just having them work with outside entities.
Baker’s DI project proposal has largely been submitted, but allowing — though not requiring — schools to pay their athletes appears closer than ever to becoming a reality.
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Follow Ralph D. Russo at https://twitter.com/ralphDrussoAP and listen at http://www.appodcasts.com
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AP college football: https://apnews.com/hub/college-football