The NCAA and major college conferences are weighing a possible settlement in an antitrust dispute that could cost them billions of dollars in damages and force schools to share athletics revenue with their athletes.
But even if college athletic directors were to create a new, more professional model for college sports, they would likely need help from Congress if athletes were not classified as employees.
Two people who are familiar with settlement discussions in the context of House v. NCAA The AP said Friday that the association could pay $2.9 billion in damages over 10 years to resolve the class-action lawsuit – which is scheduled to go to trial in January. Schools in the Big Ten, Big 12, Atlantic Coast Conference and Southeastern Conference could have to pay about $30 million a year, of which about $20 million annually would go to their athletes.
The people spoke on condition of anonymity because settlement negotiations would not be made public, and stressed that the agreement is far from complete. Terms of any agreement must still be approved by the NCAA Board of Governors and the presidential committees of each of the four conferences.
Yahoo Sports and ESPN first reported details of the possible settlement agreement.
U.S. District Judge Claudia Wilken, who has ruled against the NCAA in several high-profile antitrust cases in the Northern District of California, ordered the parties months ago to try to settle the case. An evolved plan emerged from a meeting of NCAA and conference officials in Dallas last week.
Earlier this week, Big 12 commissioner Brett Yormark declined to discuss anything related to a potential deal or the Dallas gathering when speaking to reporters following the conclusion of his conference meetings in Arizona.
There is a tacit agreement among many college athletic administrators that reaching an agreement with the House of Representatives is the best course of action. The case, filed by former Arizona State swimmer Grant House, alleges that college athletes should get a cut of the billions of dollars in media rights fees that have gone to power conferences and the NCAA since 2016.
The NCAA faces several others Antitrust challenges for compensation and transfer rules, But House has become a catalyst for action.
In an earlier lawsuit, lawyers for the NCAA and the conferences argue that damages in the House will be $1.4 billion, even though damages are tripled in successful antitrust cases.
NCAA and college sports leaders have been asking Congress for help in the form of federal legislation to regulate NIL compensation for several years, but there has been little movement on that front.
More recently, emphasis has been placed by NCAA President Charlie Baker and others delay to prevent college athletes from being considered employees.
Even with a deal in the House and a revenue-sharing plan, the NCAA and major conferences could still need federal law or antitrust protections to prevent further challenges.
A separate antitrust lawsuit in Pennsylvania addresses this employment relationship is also active.
“As far as their legal options are concerned, one is to go to Congress, the second is to recognize the athletes as employees and conclude collective agreements, the other is to try to act in a way that is more legally defensible,” emphasizes Tulane law professor Gabe Feldman said. “The door is still open to reinventing yourself to either withstand litigation or garner more support for congressional intervention.”
Feldman said a federal law denying employment status to college athletes could be challenged in court without the NCAA and conferences being granted an antitrust exemption by Congress.
“It’s hard to ask Congress to protect something that so many see as exploitative,” Feldman said.
A recent decision by a regional director of the National Labor Relations Board paved the way for members of Dartmouth’s men’s basketball team to vote to join a union. The school is fight against this decision.
A revenue-sharing agreement or significantly higher payments to college athletes in addition to scholarships seem inevitable.
Baker himself proposed in December creating a new Division I tier that would require schools to pay at least half of their athletes $30,000 a year in trust funds. Baker also encouraged schools to offer NIL activities for athletes in-house rather than allowing them to work exclusively with third-party companies.
Baker’s DI Project proposal has mostly been tabled, but allowing schools to pay their athletes — although not requiring them to do so — seems closer than ever to reality.