Sources: NCAA could pay $2.7B in antitrust suits
The NCAA's national office might be footing the bill for a settlement expected to be more than $2.7 billion in the landmark House v. NCAA antitrust lawsuit in hopes of reshaping and stabilizing the college sports industry, sources told ESPN.
- Pete Thamel
- Dan Murphy
The NCAA's national office might be footing the bill for a settlement expected to be more than $2.7 billion in the landmark House v. NCAA lawsuit and other related antitrust cases, in hopes of reshaping and stabilizing the college sports industry, sources told ESPN on Thursday.
Sources told ESPN this week that parties have proposed the NCAA's national office -- rather than its individual member schools or conferences -- would pay for the settlement of past damages over a period of 10 years. The NCAA payments would be paid to former college athletes who say they were illegally prevented from making money by selling the rights to their name, image and likeness.
The settlement would come with a corresponding commitment from conferences and schools to share revenue with athletes moving forward, sources said. The settlement would establish a framework for power conferences to share revenue with their athletes in the future. Sources have told ESPN that schools are anticipating a ceiling of nearly $20 million per year for athlete revenue share moving forward. (That figure is derived from a formula that's expected to be, per sources, 22% of a revenue metric that's still being discussed, which is set to be based on various revenue buckets. It would be up to the schools to share that much.)
The dollar value and timing, sources cautioned, is not set and could change due to the myriad variables involved in the case.
Steve Berman, co-lead counsel for the plaintiffs, told ESPN he believes the House case is "the difference-maker" after more than a decade of legal battles chipping away at NCAA rules. Berman declined to comment on the specifics of the ongoing settlement talks but said the plaintiffs' leverage is growing as the case moves closer to trial.
"Our leverage is a big cannonball rolling down a hill and picking up speed," Berman said. "The longer they wait, the more they're going to have to pay. It's that simple."
The NCAA declined to comment.
Since a cadre of college sports and NCAA officials met plaintiffs' attorneys at the Hyatt Regency at the Dallas-Fort Worth airport on April 25, the details for potentially settling the House case have begun to be distributed to campuses. After interviews with more than a dozen college officials, industry sources and lawyers this week, ESPN has learned that many crucial details for a settlement remain unsolved, but both sides are making progress toward a deal that could serve as a catalyst for the new business model of college sports.
"They've got stuff on paper," said an industry source. "This is not just lawyers and commissioners meeting and having a cocktail. This snowball is moving downhill. The horizon on this is about a month."
Plaintiffs in the House case argue that the NCAA is breaking the law by placing any restrictions on how athletes monetize their name, image and likeness. The case is scheduled to go to trial in January. If the NCAA loses the case at trial, it could owe athletes more than $4 billion in damages.
Along with saving money, the NCAA is also motivated to settle in hopes of laying the groundwork for a system that could help them avoid future litigation. A settlement alone might not provide that protection without additional help from Congress or a collective bargaining agreement with athletes.
The NCAA and its conferences are defendants in at least two other federal antitrust cases that are challenging what remains of the association's amateurism rules. Those cases would also likely be resolved as part of the House settlement.
Earlier this month, the plaintiffs filed a motion for summary judgment, which asks the judge in the case to rule on several key arguments prior to trial. The hearing for summary judgment is scheduled for September, and a ruling in the plaintiffs' favor could continue to increase their leverage in a negotiation.
One outstanding issue in the potential settlement of the House case is whether a settlement would eliminate future antitrust lawsuits against the NCAA and its schools.
"I'm very concerned about the fact that a settlement is really not a settlement," an industry source told ESPN concerning looming issues that need to be resolved before settling. "It doesn't have enough protections. If it were an all-encompassing settlement with congressional approval, I'd feel a lot better."
College sports leaders have been asking Congress to write a new federal law for several years that would, among other things, protect them from future litigation.
Sources told ESPN that some school officials are hoping that a House settlement could spur action on Capitol Hill. Several members of Congress who have worked on college sports-related legislation in recent years declined to comment on what impact a settlement might have on the creation of a new federal law.
As information has been brought back to campuses, the biggest concern is how protective the settlement would be from future antitrust lawsuits.
"You can't just settle the lawsuits," said another industry source. "You've got to be able to emerge with something in return, other than the settlement. If you don't have the requisite ability to structure the future, all we're going to do is shake hands and wait five minutes for the next filing. You don't want to be waiting for the next lawsuit here."
