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-related revenue with their athletes.
But even if college sports officials create a new, more professional model for college athletics, they will likely need help from Congress if athletes are not classified as employees.
Two people familiar with settlement discussions related to House v. NCAA told the AP on Friday that the association could pay $2.9 billion in damages over 10 years to settle a class-action lawsuit that goes to trial in January. Schools in the Big Ten, Big 12, Atlantic Coast Conference and Southeastern Conference can count on about $30 million a year, including about $20 million going annually to their athletes.
The people spoke on condition of anonymity because settlement talks have not been made public and stressed the deal is far from finalized. The terms of the agreement still must be approved by the NCAA Board of Governors and the President’s Councils of each of the four conferences.
Yahoo Sports and ESPN were the first to report details of the potential settlement.
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 to try to settle the case several months ago. A more elaborate plan emerged at 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 possible settlement or meeting in Dallas during a call with reporters following the conclusion of his conference in Arizona.
Many college athletic administrators quietly acknowledge that settling the dispute with House is the best course of action. The lawsuit, brought by former Arizona State swimmer Grant House, argues that college athletes should receive a portion of the billions of dollars in media rights fees that go to power conferences and the NCAA starting in 2016.
The NCAA faces several others. antitrust problems for compensation and transfer rules, but House became the catalyst for action.
In a previous filing, attorneys for the NCAA and conferences argued that damages to the House would be $1.4 billion, although in successful antitrust cases the damages triple.
NCAA and college sports leaders have been asking Congress for help in the form of federal legislation to regulate zero compensation for years, but little has been done on that front.
More recently, NCAA President Charlie Baker and others have drawn attention to shifted to efforts to prevent college athletes from being considered employees.
Even with a House settlement and revenue-sharing plan, the NCAA and major conferences may still need federal legislation or antitrust protections to prevent further problems.
A separate antitrust lawsuit in Pennsylvania involving employment status also active.
“In terms of their legal options, one is to go to Congress, two is to recognize athletes as employees and enter into collective bargaining agreements, and three is to try to proceed in a way that is more legally defensible,” says Tulane, who is involved in sports. Law professor Gabe Feldman said this. “The door is still open to reinventing ourselves to either fend off litigation or gain more support for congressional intervention.”
Feldman said a federal law that denies employment status to college athletes could be challenged in court unless the NCAA and conferences get an antitrust exemption from Congress.
“It’s hard to ask Congress to protect something that many people consider exploitative,” Feldman said.
A recent ruling by the regional director of the National Labor Relations Board cleared the way for members of the Dartmouth men’s basketball team to vote on whether to join the union. School fight this decision.
Some kind of revenue-sharing agreement or significant increase in compensation for college athletes beyond scholarships seems inevitable.
Baker himself proposed in December the creation of 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 hold NIL events for athletes internally instead of allowing them to work exclusively with outside organizations.
Baker’s DI proposal has largely been tabled, but allowing, although not requiring, schools to pay their athletes appears closer than ever to becoming a reality.