Settlement considered in NCAA antitrust case could withstand future challenges
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One of the lead attorneys in a class-action antitrust lawsuit against the NCAA said Monday that settlement talks are progressing as a deadline looms next week for the Indianapolis-based organization and major conferences to agree to a deal that would cost billions in damages and set up a groundbreaking revenue-sharing system with college athletes.
“I’m hearing that things are going well in terms of both sides getting ready to approve this,” Steve Berman, a Seattle-based attorney for the plaintiffs, told The Associated Press.
Berman would not confirm details of the possible agreement, but said a settlement would create a new framework for paying college athletes that he believes could withstand future antitrust challenges.
“The rules prohibiting outright restrictions on (name, image and likeness) and other compensation payments will be greatly modified such that they probably can satisfy a pro-competitive justification,” said Berman, who has won several other cases against the NCAA, including the Alston case that went before the Supreme Court.
College sports leaders have been pleading for help from Congress to regulate NIL compensation since even before the NCAA lifted its ban on athletes being permitted to earn money for sponsorship and endorsement deals in 2021.
NCAA President Charlie Baker, who was at the ACC spring meetings in Amelia Island, Florida, on Monday, said a settlement could change the conversation with federal lawmakers about athlete compensation.
“The other thing it does is create predictability and stability for schools,” Baker told reporters. “But it also creates a tremendous opportunity for student-athletes, especially with the schools that are most heavily resourced.”
The settlement being considered would have the NCAA paying about $2.9 billion in damages. Schools in the Atlantic Coast Conference, Big Ten, Big 12 and Southeastern Conference would agree to commit about $300 million each over 10 years, most of which would be redirected to current athletes.
The settlement would create a revenue-sharing system that would allow — but not require — each school to share about 22% of athletics revenue per year with all athletes, with a possible cap of about $25 million — though that number would rise as revenue increased. The plan is similar to revenue sharing in professional sports leagues, though those athletes collectively bargain through a union.
“There is a set amount that goes to the players from the broadcast revenues, it’s capped,” Berman said. “This is really going to be no different.”
The plaintiffs gave the NCAA and conferences until May 23 to agree to a deal, according to a person familiar with the negotiations who spoke to the AP on condition of anonymity because details of the talks were not being made public.
The NCAA needs approval from its board of governors and each conference needs its presidential board to sign off on a deal. Baker would not commit to a deadline.
Berman is leading House vs. the NCAA, but the settlement could cover three other antitrust claims against the association and major college conferences as well. Hubbard vs. the NCAA, Carter vs. the NCAA and Fontenot vs. the NCAA all challenge rules regarding compensation of college athletes.
House is set to go to trial in the Northern District of California in January in front of Judge Claudia Wilken, who ruled on Alston and the O’Bannon name, image and likeness case.
If the parties agree to settle, it would still need preliminary approval from Wilken. Then athletes who are part of the class would be notified of the terms of the deal and given the right to challenge it.
House, brought by former Arizona State swimmer Graham House, is asking for athletes who were denied the ability to earn money off NIL deals to be awarded damages, dating to 2016. The suit also makes the case that revenue earned by conferences and the NCAA through television contracts should be deemed NIL compensation and shared with athletes.
Berman said the settlement would allow future college athlete to challenge it.
“The way we’re going to set this up is that every new NCAA athlete will get a copy of the class notice, in terms of the settlement, and there will be a yearly hearing set where anybody who wants to object can come forward and object,” Berman said.
The settlement will not resolve whether college athletes should be deemed employees and allowed to unionize. There is a separate antitrust lawsuit in Pennsylvania dealing with that. Plus, a recent ruling by a regional National Labor Relations Board director paved the way for members of the Dartmouth men’s basketball team to vote to join a union while a similar effort is being heard involving athletes at Southern California.
“This settlement doesn’t touch that,” Berman said. “But in terms of changing the rules to make it fair for student-athletes to share in the compensation, I think if this goes forward it settles that.”