ACC and Big 12 leaders voted to approve proposals for a settlement in the House v. NCAA class-action lawsuit, multiple sources reported Tuesday.
The Big 12 President and chancellors were the first to vote on the terms on Tuesday before ACC leadership followed later in the day, marking a big step toward finalizing a settlement expected to reshape the college sports business model. The remaining Power conferences and the NCAA Board of Governors are expected to vote later this week (the Pac-12 will vote as a full 12-team league, as constructed when the lawsuit was filed).
The Athletic reports that settlement details are expected to include upwards of $2.7 billion in back-pay damages the NCAA will owe former Division I athletes, along with a revenue-sharing model between power-conference schools and student-athletes in the future.
The back-pay damages will be made available to D1 athletes dating back to 2016 for lost name, image and likeness (NIL) earning opportunities, paid out over the course of 10 years.
HOW THE $2.7 BILLION WILL BE DISTRIBUTED
Reports indicate the NCAA will split up $1.6 billion among the member schools and then $1.1 billion will come from NCAA reserves, catastrophic insurance, new revenue and budget cuts.
Nearly 60% of the $1.6 billion is expected to come from leagues outside the Power Five conferences named in the House lawsuit, while the other 40% will come from the power conferences.
Within the $1.6 billion, the NCAA will withhold distribution from six funds across its 32 Division I leagues, including the basketball performance fund (via the NCAA tournament), grants-in-aid, the academic enhancement fund, sports sponsorships, conference grants and the academic performance fund.
The equal conference fund, the student-athlete opportunity fund, and the special assistance fund are not expected to be impacted. The NCAA does not plan to take any money from the D2 or D3 distributions.
The situation remains fluid as several smaller-revenue leagues, particularly the non-FBS Division I conferences, are proposing funding plans that don’t put a disproportionate financial responsibility on them.
The revenue-sharing model would be optional for power-conference schools, possibly as soon as next year, in which 22% of those schools’ average annual revenue (roughly $20 million per year) would be distributed directly to athletes.
“The most important part about the settlement — and let’s face it, there’s still a lot of work to be done there — is it creates some clarity and some visibility on a whole bunch of issues that have sort of been roiling everybody for a while,” NCAA president Charlie Baker said last week at the ACC Spring meetings.
“The other thing it does is create predictability and stability for schools. It creates a tremendous opportunity for student-athletes.”
WHERE IT GOES FROM HERE
Once the NCAA and power conferences finalize terms and come to an agreement, the case will be submitted to Judge Claudia Wilken of the U.S. District Court for the Northern District of California for preliminary approval. If granted, there would be a set period of roughly 90 days in which those in the retroactive damages class have an opportunity to opt out, and those in the future revenue-sharing class can object to the terms of the agreement.
That would be followed by a final approval hearing where, if approved, the settlement would officially go into effect.
This past November, Judge Wilken granted class-action status to the House side, expanding it to any D1 athlete dating back to 2016. This drastically increased the potential cost of the damages in the case, and thus, seemed to expedite talks of a settlement, which really ramped up in late April.
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So like… how do we get this money???
Navin Johnson will send you a check for $1.09 after the lawyers get paid.
College athletes chasing NIL money in college are missing the objective of attending university. Going to college prepares a person to enter the workforce and become a well rounded individual. Being a college athlete elevates the typical university experience by producing an individual that has demonstrated that they are capable of balancing school requirements with a difficult practice schedule and putting the needs of the team ahead of their own. No doubt that this results in placing physical, mental and emotional strain on the athlete. In the end the individual comes out strong in body and mind and ready for the workforce always carryingthe brand of their university. NIL is leading Athletes away from this pursuit. The transfer portal is… Read more »
If we are turning college sports into professional sports, at least at the Power Five conference level, it is time to treat those schools and conferences (or perhaps those for specific sports) like professional leagues and franchises. Separate the athletic departments completely from the schools and take away their non-profit status. I have no problem with athletes making money separate from their institutions, but once we have pay for play officially, they are professional and should pay taxes like professional leagues and donors shouldn’t receive tax benefits. Only if they are profitable should they survive.
As much as I like college sport, it has gotten out of hand, and too many people have gotten too greedy. Sports (even football) was originally meant to be a past-time after school studies, etc and to better round-out the athlete. I think that was done for decades, but now at all too many schools, it is athlete first and then student second. Our country has its priorities all screwed up.
It kills me to say this, but do away completely with college sports as they are now. Let it all be club, or follow more the D3 model. At this point, I’m no longer supporting our University with donations or going to buy season tickets.
What University were you supporting?
Florida
Keep in mind this part of the article: “The revenue-sharing model would be optional for power-conference schools, possibly as soon as next year, in which 22% of those schools’ average annual revenue (roughly $20 million per year) would be distributed directly to athletes.”
This directly correlates with the number NCAA President Charlie Baker stated last December to “invest at least $30,000 per year into an enhanced educational trust fund for at least half of the institution’s eligible student-athletes.” There are typically ~600 athletes at each large program. 600x$30,000=$18m or about the $20m they are claiming it will cost these schools per year. Nothing is set in stone, but this could dramatically change things for college swimmers.
It’s unlikely Swimmers will see an appreciable increase in money. Swimming will need to adapt into a more economically sustainable model before swimmers see anything here.
Can someone explain this case to me like i’m 5 years old
Compliments of chatgpt:
Okay, imagine you love playing with your toys, and your friends love watching you play because you’re really good at it. Now, let’s say there’s a big company that makes money from people watching you play, but they don’t give you any of that money, even though you’re the one everyone is coming to see.
This is kind of like what happened with some college athletes and the NCAA (which is like the company). The athletes are the ones playing the games that everyone loves to watch, and the NCAA makes a lot of money from these games. One athlete, named House, said, “Hey, it’s not fair that the NCAA makes so much money from us playing,… Read more »
However, in return for playing with your toys, and even if your playing does not live up to the hype created, you still received free toys that were the nicest and newest toys available, free travel to play with your toys, sometimes or even often playing with your toys on TV so other family and friends and fans can watch you, free swag to wear while playing with your toys, occasional trips with your friends to Europe (or elsewhere) as a cultural experience, free living and food for 4-8 years (COVID, toy playing or practicing related injuries, redshirt, etc.), and tuition to study for many potential jobs once you are done playing games so that you can be a self-sufficient… Read more »
I want to know how Grant House was as a kid playing with toys?
It is funny to see Grant House name on this case. He missed out on his sponsorship from the local smoothie king that was going to pay him in free smoothies.
I have been a grant house fan for many years. I thought it was huge when he went to ASU over Texas and other blue blood programs back in HS and I think he helped transform the ASU program. However, I do believe this is selfish of him to be the one doing all of this and slapping his name on the case. Look at Joe Burrow, Zion Williamson, Sabrina Ionescu, etc, there are so many high profile athletes from 2016-2021 who missed out on millions more from NIL than House, however, from what I can tell will be getting the same small check that House will. While I do think all these athletes should be compensated beyond their scholarship,… Read more »
I think it’s worth acknowledging that if it weren’t him, it was going to be someone. This case wasn’t going to *not happen* if Grant House didn’t push the issue.
Also, the lead plaintiff usually gets a bigger check.
Also, someone has to be the plaintiff. The *ether* can’t just sue the NCAA.
It’s also worth acknowledging that Grant House also just likely decimated non-revenue sports, of which he was a participant, and for what? The name recognition of being the guy that destroyed D1 sports for 85% of the athletes out there?
It’s almost like you didn’t read my comment at all.
I did read your comment, and for sure you are right that *someone* was going to do it eventually. How about someone who had a legitimate gripe about lost NIL opportunity? The fact that Grant House pushed this as lead plaintiff without fully thinking through the ramifications of his doing so is galling to fans of non-revenue/Olympic sports at the college level.
The real “ramifications” are that the NCAA and universities aren’t going to continue to make boatloads of money of kids/young adults. I’m stunned that so many in this chat are disappointed by this.
Will there be negatives? Yep. Change always may have that impact. But, the likely settlement includes a distribution of 22% of the likely Power 4 conference school’s athletic revenue to GO TO ATHLETES. So, the budget cuts (IF they occur) will be coming from other areas. Sure, some can cut programs. But you’re only talking about the richest 60 or so schools. And, keep in mind, they are still going to have to pay out the 22% to athletes and deal with following Title IX. So…… Read more »
Terrible take. Just terrible. Where do you think the 22% is coming from? Hint, the 22% is going to pay the revenue earners. The AD has to balance the sheet somehow. Axes all around.
And w.r.t. making boatloads off young athletes, you do realize without the NCAA and the requisite TV money, these athletes would get no exposure right? As if a 4-500k education package over 4-6 years wasn’t enough, it was the NCAA that gave them their platform to perform.
I do believe they need stipends, for sure, especially with the work restrictions, but let’s not act like the best educations, tutors, nutrition, conditioning, wellness, health care are a pittance. Not to mention the exposure and connections of having… Read more »
Yeah… that’s a terrible take, Patrick. The 22% is specifically coming from an agreement the NCAA, it’s conferences and member schools have agreed to. The point of it is to avoid losing the lawsuit and then paying out another 3x in damages… and that only address present and past athletes. Yes, an AD has a balance sheet. The AD also reports to someone not in the athletic department. And that person likely reports to a group of people. Agreeing to a settlement, that includes a specific cut from your revenue keeps their model going. Cutting out student athletes because they can’t manage a P&L isn’t going to fly very far now, is it? Especially when most all of these universities… Read more »
I agree with you here, “Frankly, there is plenty of money there for all of this to work out without cutting anything.” Absolutely. But we’ve seen the movie. Back when it was simply a requirement to balance scholarship money for Title IX, what did football schools do? Cut wrestling, cut swimming, some went so far as to cut baseball. It is greed, because heaven forbid the universities do something to benefit all the athletes when they can spend millions on football practice facilities, 88 scholarships, and pay an outsized coaching staff an exorbitant amount.
That’s why it’s a bad take to like any of this. We know how it will end and it won’t be with non-revenue sports sharing the… Read more »
This is ridiculous. You are conflating the athletic budgets of P4 schools with the rest of the conferences. Sure, SEC and Big Ten schools are awash in money – they can handle the settlement and continue to fund non-revenue sports without a problem. The other 27 conferences aren’t going to be as lucky – this settlement is going to blow gaping holes in their athletic budgets. Olympic sports are going to get crushed.
I assume that since he filed it, it can only go back as far as he was in the NCAA and affected by its amateurism rules at the time.