What you need to know about House v. NCAA settlement and a historic day for college sports

The NCAA and its power conferences agreed on Thursday to allow college athletes to receive payments directly from the universities where they compete, a break from the organization’s more than century-old system of amateurism.

The two sides in the House v NCAA class-action lawsuit Official terms The multibillion-dollar settlement, which includes $2.75 billion in back pay damages, will be a model for the NCAA, which stands to shape college sports for former Division I athletes, as well as future revenue sharing between power conference schools and athletes.

“This landmark settlement brings college sports into the 21st century,” Steve Berman, one of the plaintiffs’ attorneys, said in a news release.

The announcement comes a week after the NCAA Board of Governors and leaders from the Power 5 conferences — the ACC, Big 12, Big Ten, Pac-12 and SEC — all voted to approve the proposed terms. NCAA President Charlie Baker described the organization, which has faced legal challenges and policy changes in recent years, as “an important step in the ongoing reform of college sports.”

Another lead plaintiff attorney, Jeffrey Kessler, said, “We’ve been on this long legal road in search of economic justice in college sports for more than a decade, but the time has come to bring about a fairer compensation system for college athletes.”

Here’s what to know and what to focus on from a historic day for college athletics.

Settlement revelations

Most of the details of the settlement — including headlines and the nitty-gritty of payment models — have been reported in recent weeks.

The announcement put the total back payment loss figure at “more than $2.75 billion” and confirmed that it was paid over a 10-year period.

As for revenue sharing, the release indicates that 22 percent of the average power conference program’s revenue is allocated to revenue sharing in the first year — and that number increases over time — and that 22 percent is projected to be “significantly greater than $20 million per school” per year. The $20 million number has been widely cited as a ballpark figure based on recent power conference revenue, and it’s certainly a good starting point. It is also optional; Schools can choose in the revenue distribution model and decide which athletes they want to pay. As power conferences’ total revenue increases, the cap on the amount of money spent on paying athletes grows slightly each year.

The statement also describes revenue sharing as “an increase from scholarships, third-party NIL payments, health care and other benefits received by college athletes,” and the total cost over the 10-year settlement period is “more than $20.” billion, making it one of the largest antitrust class-action settlements in history.

For the payout of “more than $2.75 billion” over 10 years, the NCAA will be responsible for approximately $1.2 billion, or 41 percent, of the reserve. The power conferences account for 24 percent of future earnings, Group 5 for 10 percent, FCS schools for 13 percent, and non-football DI schools for around 12 percent.

There is some criticism among smaller programs that the model places a disproportionate amount of financial responsibility on them, especially when the home outfit is primarily targeted at power conference programs.

The NCAA’s scholarship caps will be removed in the settlement and give way to roster restrictions. No specifics or details were given in the release and it’s not completely overturned, but schools are expected to have some flexibility in how scholarships are divided between sports. It could also create challenges for some numbers to adjust within the larger roster constraints of the current scholarship cap model, possibly eliminating walk-on athletes.

Other antitrust charges

The House settlement follows two other high-profile antitrust cases in the Northern District of California, Hubbard v. NCAA and Carter v. It solves the NCAA. Sources who gave an explanation on the negotiation process said. The athletics Addressing those additional issues was an important aspect of the NCAA’s terms of the agreement, which it hopes will provide some degree of dispute relief.

The quantum of relief has to be seen as confirmed by the decision in another antitrust case. Fontenot and the NCAA are in a separate lawsuit in Colorado, seeking class-action certification and finding that laws prohibiting “pay-for-play” compensation violate antitrust laws. In Carter v. They are similar to the claims made in the NCAA. The NCAA’s request to move Fontenot’s case to the Northern District Court of California and consolidate it with Carter’s was denied on Thursday. The Fontenot case will instead remain in court in Colorado, where the plaintiffs’ representatives say their claims are broader than the Carter case and could influence other college athletes to choose or oppose the House settlement and pursue a different decision.

“We brought the Fontenot case to fight for better rights for future college athletes, and while we’re still waiting to fully review this settlement, we have some concerns about what’s being reported,” said plaintiff Garrett Brochus, an attorney in the Fontenot case. The athletics. “We will continue to fight for these college athletes who deserve continued representation.”

Fontenot’s full impact remains to be determined in Colorado. Both the plaintiffs’ attorneys and the NCAA believe that settling Carter’s case as part of the council’s settlement will cover Fontenot’s claims and prevent them from moving forward. That decision will ultimately depend on the fine print of the House decision and whether Judge Claudia Wilken, who is presiding over the House case, approves those terms.

“Judge (Wilken) made it clear that if there is a settlement that covers Fontenot’s claims, she will not allow those claims to proceed as a class action in Colorado,” Berman said. The athletics. “So at best, Fontenot’s proposed class action is short-lived and doesn’t affect the (House) settlement.”

“If the settlement in the House case is approved, it resolves all claims in the Fontenot case, and it doesn’t matter where Fontenot is heard,” Kessler said. The athletics.

Next steps in the settlement process

While an agreement has been reached between the two sides, none of the settlement details have been finalized. For the class-action settlement, the contract must be submitted to Judge Wilken for preliminary approval, which is expected to happen within the next 30-45 days. If prior approval is granted, there will be a period of several months during which those in the retroactive damage and future revenue sharing sections will be informed and have the opportunity to opt out or object to the terms of the agreement. The judge’s decision. After that, the final approval hearing, at which time, if the judge approves, the settlement will officially take effect.

So even if there are no revisions, the settlement will not be finalized until the beginning of this year.

“If there is an agreement, it will for the first time bring about a truly fair compensation system where athletes can get historic recognition for their contributions to their sport,” Kesler said in an interview. The athletics Ahead of the formal announcement earlier this week. “It’s going to make a difference for these athletes and it’s going to do it in real time. If we don’t settle down, I think we’ll still get there, but it’s going to take years of litigation.

Unsolved problems

Regardless of Fontenot’s lawsuit, the dispute over the case is one example of the unanswered questions surrounding the settlement process. For example, the 22 percent average annual revenue share for power conferences was negotiated without any input from athletes, far less than most American professional leagues distribute to athletes, making the issue even more incendiary. A discussion of union efforts and working conditions for college athletes.

The NCAA, however, continues to monitor the antitrust exemptions of Congress, even describing the settlement as a “road map for college sports leaders and Congress” in a statement. The organization believes that the home settlement provides significant protections and benefits, and that a collective bargaining process is unnecessary.

“It creates a framework to have a different conversation with Congress,” Baker said at the ACC’s spring meetings earlier this month. “So I hope so in many ways.”

In the meantime, many questions remain. Does the settlement’s revenue-sharing model for Power Conference athletes reflect Title IX policy on equal pay for men’s and women’s athletes? If litigated, the issue could spark further litigation. It’s also unclear what impact the council’s agreement might have on the role of third-party NFL unions, which currently operate outside of athletic departments and have developed a pay-to-play culture. In recent months there has been talk of the NCAA allowing athletic departments to field those NFL teams at home.

There are concerns about the detrimental impact these new funding requirements could have on athletic departments, including the possibility of schools cutting sports, athletic resources or administrative positions at both power conference and power conference schools. At the same time, the home settlement will further deepen the divide between the two teams and could inflame the debate over the separation of the top-grossing football programs into some Super Conference or Super League in years to come.

Much attention is still needed in the coming months and years. But now the NCAA is moving toward a settlement and a future where unpaid amateur athletes are a mainstay of college sports.

“The legacy of the home affair is the most fundamental and revolutionary change in the history of college sports,” Berman said The athletics. It is paving the way for unlimited revenue sharing that will change the lives of college athletes.

(Photo: Mitchell Leighton/Getty Images)