Last week, the NCAA Board of Governors and the Power 5 Conferences (ACC, SEC, Big 10, Pac 12, and Big 12) voted in favor of settling the House v NCAA case. House is the case that college sports experts predicted would completely upend the current college athletics landscape if it went to trial. At trial, the NCAA and Power 5 Conferences would have faced up to $4.3 billion dollars in damages. Accordingly, the NCAA and Power 5 Conferences realized that it would be better to settle the case and ultimately voted in favor of the settlement. Since then, the House settlement has been the talk of the college sports towns. Here are some details on the settlement and what it may mean for the future of college sports.
The Settlement Details
While the case is known as House v NCAA, the settlement encompasses two other cases. Those cases are Hubbard v NCAA, and Carter v NCAA. The NCAA and the Power 5 Conferences are required to pay $2.8 billion dollars in damages. The damages will be paid over a 10-year period. The settlement applies to past, current, and former college athletes. The settlement applies to 14,500 Division 1 athletes who played from June 15, 2016 until November 3, 2023.
Former college athletes who opt into the settlement are eligible to receive damages for not being allowed to receive NIL compensation, not being allowed to receive compensation for the use of their NIL in video games, and not being allowed to receive a portion of NIL broadcasting revenue. Some of the money will be split equally between all the athletes, while some money will be allocated based on each athlete's market value.
Current and future college athletes will benefit from the settlement as the schools will be permitted but not required to pay their athletes up to $22 million annually in a revenue sharing model. This number is set to increase over the 10-year period based on 22% of the Power 5 school’s revenues. The revenue categories being included are TV contracts, ticket sales, and sponsorships.
How will the $2.8 Billion in Damages be Paid?
The NCAA will be paying $1.1 billion, the Power 5 will be paying approximately $1.65 billion, and the remaining Division 1 conferences will be paying $990 million to make up the $2.8 billion in damages. While all Division I conferences are expected to pony up to cover the settlement amount, not everyone is happy about it. Some conferences voiced concerns over being forced to pay a settlement for a case that did not name their conference in the lawsuit. Before the settlement was voted on by the Power 5 Conferences and the NCAA, Val Ackerman, the commissioner of the Big East conference expressed opposition to the settlement.
Similarly, in an interview by Montana Sports, the athletic director at University of Montana, Kent Haslam, discussed how the settlement may affect his school that is a member of the Big Sky Conference. The AD stated that based on the early numbers, the University of Montana could lose roughly $200,000 in their distribution from the NCAA and that the money would need to be made up through ticket sales, donations, and cost-cutting. Even though the Power 5 schools were the only ones named in the lawsuit, the settlement will affect all of college sports. No conference outside of the Power 5 had a vote on the settlement.
Other Terms of the Settlement
In addition to the financial points of the settlement, there are other points of note as well. The first is that scholarship caps will be eliminated and new roster limits will be implemented, according to a report by Ross Dellenger of Yahoo Sports. This means that schools will be permitted to give a scholarship to every member of a roster as long as they stay within a newly set roster limit. Perhaps a more interesting point of the settlement is that the plaintiffs will agree to cooperate with the NCAA's effort to be granted an antitrust exemption from Congress. According to the plaintiffs' attorney Steve Berman, the plaintiffs will cooperate with the NCAA's lobbying efforts to get a limited antitrust exemption from Congress.
The Judge Has Approved Stay of Action in the House Case
The settlement has to be approved by United States District Court Judge, Claudia, who presided over the O'Bannon and Alston cases. On May 30, 2024, Judge Wilken approved a stay of action in the House case.
This means that the settlement terms will likely be approved in the next 30-45 days.
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