All Division I conferences will foot damages bill in House v. NCAA settlement
When NCAA President Charlie Baker said during a Congressional hearing that potential damages in the House case would be absorbed by all of college sports, he wasn’t bluffing.
Schools from all 32 Division I conferences will indeed foot the bill for as much as $2.77 billion in damages in a potential House settlement, according to a recent memo shared with stakeholders and described to On3 by sources.
Several industry leaders described no shortage of consternation at the non-power conference level, as they will be left paying a portion of the damages bill in the proposed settlement even though the NCAA and power leagues are the named defendants.
Characterizing sentiments outside of the power conferences, Ryan Ivey, Louisiana Tech’s athletic director and former co-chair of the FCS/Division I-AAA working group, told On3:
“It’s trying to determine how much the student-athlete compensation piece is going to fall to [non-P5 schools], what damages piece will fall to our respective institutions, and how that is going to affect us [all] financially. All of those things create anxiety and create more questions.”
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He’s not the only one concerned.
In an email Saturday to members, Big East commissioner Val Ackerman expressed “strong objection” to the NCAA’s proposal on how it is determining back damages related to the consolidated settlement in a letter obtained by Yahoo Sports.
“Based on the numbers we have reviewed, the liability of the 22 non-FBS conferences under the proposed formula appears disproportionately high, particularly because the primary beneficiaries of the NIL ‘back pay’ amounts are expected to be FBS football players,” Ackerman wrote. “I have voiced the Big East’s strong objections to the proposed damages framework through recent emails to Charlie Baker and his counsel and through comments during commissioner calls over the past two weeks.”
House settlement raises eyebrows within non-power leagues
Several sources within the non-power league ranks raised eyebrows over the memo, which was distributed last week and detailed the cost of damages for each conference. The majority ($1.6 billion) of the nearly $3 billion potential damages bill is expected to come from a reduction in NCAA distribution revenue, sources said.
Of that amount, almost 60% is expected to come from leagues outside power conferences, with power leagues responsible for 40%, ESPN and Yahoo Sports first reported.
“My understanding is each Division I institution will be responsible for having some withholdings over that 10-year period,” Ivey said.
Prominent college sports attorney Tom Mars said on social media: “After screwing college athletes for decades, the NCAA plans to screw the schools that are least able to push back on [the] antitrust lawsuit settlement.”
Plenty of questions about impact of settlement
If both sides in the House case do not reach a resolution this week – plaintiffs’ attorneys set a Thursday deadline – the legal battle could be headed to a January trial. A loss there could cost the NCAA and power leagues $4.2 billion.
For some leaders at the non-P5 level, having to foot the bill in the House case has shades of the memo they received three years ago: The NCAA initially told 21 conferences that were not co-defendants in the Alston case that they were still required to pay a combined 25.8% of the plaintiffs’ legal fees ($9.9 of $37.9 million).
Administrators at the Group of Five level are also grappling with questions surrounding how much revenue, if any, they will be willing and able to share with athletes in order to remain competitive with peers: How should they allocate the limited resources they have? What do they prioritize?
For years, campus leaders have faced similar internal decisions revolving around facility upgrades and related arms races.
“We’ve just added this compensation model that has never been a part of our enterprise before,” Ivey said. “And so, we’ve added this piece to it and the litigation piece and everything that’s come along the last five to 10 years. And now we’re having to react and deal with those things, in part because we weren’t proactive enough to do things to help us not get to this point.”