A potential multibillion-dollar settlement of an antitrust lawsuit has cleared the first of a three-step NCAA approval process without any changes to the payment structure that would leave the 27 college conferences not named in the process covering the majority of a share of U.S. $1.6 billion. of the damage.
The Division I Board of Trustees’ finance committee on Monday night approved the House vs. House $2.77 billion settlement proposal. NCAA to the entire board with a recommendation to maintain the original financial plan.
The NCAA, Big Ten, Big 12, Atlantic Coast Conference, Pac-12 and Southeastern Conference are defendants in the House case, a class-action lawsuit seeking retroactive pay for college athletes who were denied name, image and likeness compensation dating back to 2016. NCAA lifted ban on athletes earning money for sponsorship and endorsement deals in 2021.
The Big 12 became the first conference to approve the deal on Tuesday, with its board of chancellors and university presidents voting unanimously in favor, a person with direct knowledge of the decision told The Associated Press. The person spoke on condition of anonymity because the conferences were not making any public statements about the deal for now.
In the future, it will be the Big Ten, Big 12, ACC and SEC that will bear the financial burden in a proposed revenue-sharing system that requires each of their schools to commit more than $20 million a year to be paid directly to athletes. The overall commitment is expected to be around $300 million per school over 10 years.
The NCAA office is prepared to cover the portion of the case’s damages over 10 years through reduced operating expenses, insurance and reserve funds. Distributions withheld from its 352 Division I member schools would cover the rest. The NCAA distributes more than $700 million a year to its 1,100 member schools across three divisions.
The financial plan approved for the settlement calls for the NCAA to cover 41% of the $2.77 billion in damages, with the Power Five conferences accounting for 24% and the other five major college football conferences – the so-called Group of Five – covering 10%.
Conferences competing in Division I football’s second tier, the Championship Subdivision, would cover 14% of the total amount and non-football DI conferences would account for 12%.
Conference commissioners from leagues that don’t compete in Division I football’s highest level, the Bowl Subdivision, questioned the $1.6 billion in distribution portion withheld from the deal. The 27 conferences not named in the lawsuit are expected to cover 60% of the retained distributions, with the other 40% coming from power conferences that are currently comprised of 69 schools.
The commissioners of the 22 non-FBS conferences sent a memo to NCAA leadership proposing that the financial structure be reversed so that the power conference’s retained distributions would cover 60% of the $1.6 billion.
Big Sky commissioner Tom Wistrcill said Tuesday that non-FBS conferences remain hopeful of reconsideration.
“We are fighting uphill,” he said.
The Big Sky is one of the most successful conferences in the Championship Subdivision, with schools such as Montana, Montana State, Eastern Washington, Idaho State and Weber State.
The proposed agreement still needs approval from the Division I Board of Governors, which was scheduled to meet later Tuesday, and the NCAA Board of Governors.
The presidential councils of the other four power conferences, also known as autonomy conferences, are also scheduled to meet separately this week to vote on the deal.
“We believe that more than 95% of the damages will go to A5 football and basketball players. For non-A5 conferences to pay for this is disproportionate. We are asking for a more proportionate structure because our student-athletes will not see the money,” said Wistrcill,
Plaintiffs’ lawyers have given the NCAA and the conferences until Thursday to respond to the proposed settlement, with parties on both sides appearing hopeful that it will be approved.
Conferences not named in the lawsuit only learned details of the deal two weeks ago through media reports, Wistrcill said. He said they hope the deal can be approved with an opportunity for the NCAA’s funding plan to be reevaluated.
Wistrcill said the formula for retained distributions the NCAA is using, which is based on the percentage a conference received from overall NCAA distributions between 2016-2024, is expected to cost the Big Sky about $3 million a year for 10 years.
He said that while power conferences have a larger total distribution retained per school, that revenue is a much smaller part of athletic departments’ budgets, which typically exceed $100 million annually. Big Sky school athletic budgets hover around $20 million annually.
“Money is flowing to your student-athletes even though (the settlement) is disproportionately penalizing our institutions,” Wistrcill said.
