A potential multibillion-dollar settlement of an antitrust lawsuit on Tuesday cleared the second of a three-step NCAA approval process, and the presidential councils of two of the five conferences named in the complaint voted to approve the settlement.
The NCAA Division I Board of Directors voted to move forward with a proposed $2.77 billion settlement between the Chamber and NCAA, according to two people who were briefed on the vote. They said the vote was not unanimous, but it was unclear exactly how the 24 board members voted.
The people spoke to The Associated Press on condition of anonymity because the NCAA has not revealed its internal discussions related to the deal. The NCAA Board of Governors must still sign off on the agreement for final approval. The meeting is scheduled for the end of this week.
The DI board’s finance committee on Monday recommended keeping the original financial plan for the deal in place, drawing the ire of non-powerful conference leaders who believe their leagues will bear a disproportionate financial burden.
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 on Tuesday became the first conference to approve the deal, with its board of chancellors and university presidents voting unanimously in favor, another person with direct knowledge of the decision told the AP. The person spoke on condition of anonymity because the conferences were not making any public statements about the deal for now.
Later Tuesday, ACC presidents also voted to approve the deal, according to a person with knowledge of their vote who spoke on condition of anonymity.
The presidents of the Big Ten, SEC and Pac-12 were scheduled to vote on approving the deal later this week.
Going forward, it will be the Big Ten, Big 12, ACC and SEC that will make the biggest investment, as the deal includes a proposed revenue-sharing system that asks 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 expected to cover nearly $2.8 billion in damages over 10 years. A reduction in operating expenses, insurance and reserve funds is expected to cover approximately $1.2 billion. The rest would come from withheld distributions to 352 Division I member schools. The NCAA distributes more than $700 million a year to its 1,100 member schools across three divisions, the vast majority to Division I.
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 distributions 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 currently cover 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 were 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.
“We believe that more than 95% of the damages will go to (Power Five) football and basketball players. For non-A5 conferences to pay for this is disproportionate. We ask for a more proportionate structure because our student-athletes will not see the money,” Wistrcill said.
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 did not learn details of the proposed deal until 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, but the prospects for that dimmed even further with the board’s full approval Tuesday night.
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. It also fails to take into account the huge influx of revenue these schools are about to receive from expanded the college football playoff.
Big Sky school athletic budgets hover around $20 million annually.
“Money is flowing to your student-athletes while (the settlement) disproportionately penalizes our institutions,” Wistrcill said.
