NCAA in "Deep Discussion" to Implement Revenue Sharing with Athletes

[Mavric]

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The leaders of college sports are involved in "deep discussions" to reach a legal settlement that would likely lay out the framework for sharing revenue with athletes in a future NCAA business model, sources told ESPN.

 

The NCAA and its power conferences are defendants in an antitrust class action lawsuit, House v. NCAA, which argues that the association is breaking federal law by placing any restrictions on how athletes make money from selling the rights to their name, image or likeness. The case is scheduled to go to court in January 2025. If the plaintiffs win at trial, the NCAA and its schools could be liable to pay more than $4 billion in damages, which has motivated many leaders across the industry to seek a settlement.

 

Sources indicated that a turning point in the discussions, which have been ongoing, came last week in the Dallas area, where the power conference commissioners, their general counsels, NCAA president Charlie Baker, NCAA lawyers and the plaintiffs' attorneys met. (They chose the Dallas area because they were already there for the College Football Playoff meetings, which were held in that area last week.)

 

 

While sources stressed that no deal is imminent, details about what a multibillion-dollar settlement could look like are expected to be shared with campuses in the near future. There are myriad variables to get to the finish line and still some obstacles and objections at the campus level, but sources indicate that progress has ramped up in recent weeks.

 

ESPN

[brophog]

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How would Title IX be impacted?

 

This should not be buried in that article like it's a minor obstacle. That's a federal statute that has huge ramifications.

[Mavric]

 

[Mavric]

 

[BigRedBuster]

On 4/30/2024 at 8:02 AM, Mavric said:

 

RIP college sports.

[Mavric]

 

[Mavric]

 

[Mavric]

 

[Mavric]

 

[Mavric]

From a thread of Tweets here but I just copy/pasted the text for readability:

 

If/when the House case settles, it will result in a wave of legal issues. Here are some of the bigger ones:

 

1. NCAA/conferences vs #NIL collectives

The NCAA/P4 are hoping the House settlement eliminates collectives and they’re going to try and crack down on “pay for play.”  The thought is by allowing donors to give directly to schools (who can then pay athletes) it eliminates the need to give to collectives.  But with a cap & some schools worried about Title IX (more on that below), there may still be a need for collectives to compensate athletes.  If one school is only offering an athlete X directly from the school, but another is offering X plus Y from a collective that would obviously play a role in recruiting.  The NCAA/P4 are going to try and eliminate these collective payments through harsher enforcement/penalties.  Which is where I think we’ll see lawsuits arise.  It’s already happened with the Tennessee case.  The House settlement isn’t going to magically make it easier for the NCAA to enforce its rules.

 

2. Title IX

Some schools will assume Title IX applies to direct NIL compensation and  divide payments between male and female athletes equally.  Others either aren’t going to make that assumption or will assume that making payments in that manner will lead to other legal issues.  So lawsuits may arise under either scenario. I personally don’t think Title IX requires schools to make payments that are ostensibly for a license to use an athlete’s NIL rights equally between male and female athletes.  But the issue will no doubt be litigated.

 

3. Schools vs Athletes

When allowed to directly pay NIL compensation to athletes, schools and athletes will be entering into binding contracts. And there will be a lot of those contracts. It’s inevitable there will be issues with some of them that lead to legal disputes. I assume most will contain alternative dispute language, such as mandatory arbitration provisions. So this could be a really active space in the future.

 

4. Objections to the House settlement

Under the structure being discussed for the House settlement, all future DI athletes will be opted into the settlement’s revenue sharing terms. And if they don’t think they’re fair, they’ll be able to make annual objections with the court. There will likely be a number of these objections made. A big wildcard is if someone is able to organize a large number of athletes to object en masse. It could throw a big wrench in the plan for the House settlement to bring some peace to college athletics. 

 

5. Employment

The House settlement will do nothing to slow down the push for at least some college athletes to be employees. If the USC NLRB proceeding turns out the way most expect (with football and men’s and women’s basketball players being declared employees), we might see more of that.
 

Long story short, the many (and often novel) legal issues in college athletics are going to continue. It’s a fun time to be an attorney working in this space.
 

One other item I forgot to add.

 

6. State legislation

We’ve seen states aren’t shy about passing NIL laws that give their schools a leg up in recruiting. A state could do this after the House settlement by passing a law that allows schools to give unlimited NIL compensation.

[Red Five]

18 minutes ago, Mavric said:

1. NCAA/conferences vs #NIL collectives

The NCAA/P4 are hoping the House settlement eliminates collectives and they’re going to try and crack down on “pay for play.”  The thought is by allowing donors to give directly to schools (who can then pay athletes) it eliminates the need to give to collectives.  But with a cap & some schools worried about Title IX (more on that below), there may still be a need for collectives to compensate athletes.  If one school is only offering an athlete X directly from the school, but another is offering X plus Y from a collective that would obviously play a role in recruiting.  The NCAA/P4 are going to try and eliminate these collective payments through harsher enforcement/penalties.  Which is where I think we’ll see lawsuits arise.  It’s already happened with the Tennessee case.  The House settlement isn’t going to magically make it easier for the NCAA to enforce its rules.

 

I'm not a lawyer, but I agree that this is ripe for more lawsuits.

 

You can't have a salary cap w/o it being collectively bargained, and you can't collectively bargain unless the players are employees.  And as previous lawsuits have show us, you can't limit the outside money (aka NIL) that someone is making.  If the schools are paying the players a salary, you still are going to have NIL (and maybe then you will have it the way it was intended, players doing sponsorship/marketing deals for companies).

[BigRedBuster]

6 minutes ago, Red Five said:

 

I'm not a lawyer, but I agree that this is ripe for more lawsuits.

 

You can't have a salary cap w/o it being collectively bargained, and you can't collectively bargain unless the players are employees.  And as previous lawsuits have show us, you can't limit the outside money (aka NIL) that someone is making.  If the schools are paying the players a salary, you still are going to have NIL (and maybe then you will have it the way it was intended, players doing sponsorship/marketing deals for companies).

I agree with all of that.  But, I think if the schools are paying players, the NIL would be drastically reduced.  Right now, it's all being propped up by people donating to collectives and the collectives are basically doing what the schools will do.  NIL would then transition to what it was supposed to be.  That is, players actually doing something like promoting a product or company for pay.

[Mavric]

6 minutes ago, Red Five said:

I'm not a lawyer, but I agree that this is ripe for more lawsuits.

 

You can't have a salary cap w/o it being collectively bargained, and you can't collectively bargain unless the players are employees.  And as previous lawsuits have show us, you can't limit the outside money (aka NIL) that someone is making.  If the schools are paying the players a salary, you still are going to have NIL (and maybe then you will have it the way it was intended, players doing sponsorship/marketing deals for companies).

 

Yeah, there is no possibility that there aren't more lawsuits.

 

I don't see the collectives going away.  I do think there will be some form of compensation directly from schools.  But I think the collectives are just going to shift from trying to take care of everyone to really throwing money at the top dogs to try to get the best players.

[Mavric]

 

[Mavric]

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Each power conference is expected to vote on the settlement over the next few days, in anticipation of the NCAA’s Board of Governors potentially approving the agreement later this week. Attorneys for plaintiffs have set a hard deadline of Thursday for defendants – the NCAA and power conferences – to agree to settlement terms. 

 

The proposed settlement would entail the NCAA and all 32 Division I conferences paying $2.77 billion in damages. It also would enable schools, at their discretion, to share as much as $22 million in revenue with athletes, according to a copy of the proposed settlement summary obtained by On3.

 

What’s next? In the coming months, U.S. District Judge Claudia Wilken will need to certify the settlement agreement, and represented athletes in the case will have the opportunity to opt-out.