AMELIA ISLAND, Fla. — If they reject a proposed settlement offer, officials from the NCAA and power conferences stand to face a catastrophic $20 billion in back damages as well as risking a bankruptcy filing, according to documents obtained by Yahoo Sports.
The two-page document was circulated among power conference presidents and administrators on Tuesday as ACC leaders met at their annual spring meetings in Florida. It details terms of a potential settlement in the House, Hubbard and Carter antitrust cases, a trio of legal challenges brought against the NCAA and its five power conferences seeking back pay for various athlete compensation elements.
The settlement, believed to be in the final stages of adoption, consists of three main concepts: billions in back damages; a new compensation model permitting schools to share as much as $22 million annually with athletes in a capped system; and an overhaul of the NCAA scholarship and roster structure.
The document outlines settlement concepts in detail as well as particulars around the new compensation model. It also provides university leaders with new information on hot-button topics such as how a settlement protects the NCAA from future legal challenges, Title IX’s application and the enforcement of booster-led collectives in a “new infrastructure.”
Documents specify, perhaps for the first time in writing, the total amount in back damages owed to athletes for the use of their name, image and likeness (NIL) before the NCAA lifted NIL prohibitions in 2021.
The amount is $2.776 billion.
The NCAA is responsible for paying the amount over a 10-year period, roughly $277 million annually. About 60% of that will come from a reduction in distribution to its schools. The NCAA is responsible for closing the 40% gap through other means, such as reserves, other net incomes and a significant reduction in operating expenses of as much as $18 million annually...
...The document reveals unpublished details around an annual revenue-sharing cap that schools are permitted — not required — to distribute with athletes. The cap is 22% of an average of power conference school media rights, ticket sales and sponsorships.
The cap remains a fluid and unsettled figure, and one that will fluctuate over time as athletic department revenues increase. But a projected revenue cap in Year 1 (presumably, fall 2025) is being shared with multiple college leaders of about $21 million...
...The settlement isn’t perfect, as the document notes.
It does not protect the NCAA and conference from future lawsuits brought by state attorneys general, does not preempt state NIL or revenue-sharing laws and offers no real ruling on Title IX’s application in such a compensation model.
Title IX “remains at the campus level to be applied,” the document notes. Jeffrey Kessler, another plaintiff attorney in the case, believes the Title IX issue will eventually be resolved in the courtroom.
“The courts will decide,” he told Yahoo Sports. “It doesn’t impact us. If we have a settlement, we’ll negotiate a system in which athletes will be compensated. The degree in which Title IX applies will be determined [by the courts].”
At the end of it all is a steep price tag —
as much as $300 million per school over the 10-year settlement agreement. That figure assumes a school (1) meets a revenue distribution cap of $21 million; (2) $2 million in withheld NCAA distribution for back damages; and (3) as much as $10 million in additional scholarship costs related to an expansion of sport-specific roster sizes.
...For many school administrators, sticker shock exists. The $30 million price tag, a startling figure for an industry that has only provided athletes with mostly non-cash resources, is about 20% of the average athletic department budget of public schools in the ACC, Big Ten, SEC and Big 12.
