Confidential NCAA memo details breakdown of Alston case legal fees

The NCAA has told its 32 Division I conferences that they are on the hook for 90 percent of the $37.9 million in Alston plaintiff’s legal fees accrued during the landmark U.S. Supreme Court case, according to a confidential August 4 memo obtained by On3 Sports that the NCAA sent to all Division I conference commissioners.

The three-page memo details that the 11 co-defendant conferences are required to pay 64.2 percent of the fees ($24,355,875). The 21 conferences that were not co-defendants in the case still are required to pay a combined total of 25.8 percent of the fees ($9,773,233). The NCAA Board of Governors accepted a recommendation that the association will pay 10 percent ($3,792,123).

On June 21, the Supreme Court ruled unanimously that the NCAA can’t limit education-related benefits that colleges can offer their athletes. The August 4 memo is addressed to league commissioners from Kathleen McNeely, the NCAA’s senior vice president of administration and chief financial officer, and Kevin Lennon, the NCAA’s vice president of Division I governance.

“That was very surprising,” a conference official told On3. “It caught us off-guard because we thought the NCAA was paying it. Now, all of the sudden, the conferences have to foot the bill for those legal fees even if they weren’t a named defendant in there.

“We’ll have to raise the issue with our membership — how are we going to move this forward, how are we going to pay this bill? It brings up some serious legal issues.”

More than a year ago, according to the letter, NCAA staff and Division I commissioners engaged in detailed conversations regarding how to pay for the plaintiff’s legal fees in the Alston case.

The NCAA staff shared several models, then surveyed all the conferences to receive feedback on what models the conferences liked and requested feedback on other models that that staff might run. The feedback from the survey was shared with the Division I Board of Directors Finance Committee last October.

The recommendation from the Finance Committee to the Division I Board of Directors was that the Board request that the NCAA Board of Governors consider having the NCAA national office absorb the total cost of the legal fees, which totals $37,921,231.47, using reserves as necessary.

The additional request was that if the Board of Governors did not approve that approach, or otherwise increase the cost of share of the NCAA above 10 percent, the committee would recommend using another of the eight scenarios shared with the conferences. Scenario No. 2 entailed the NCAA paying the first 10 percent of the fees with the remainder allocated to the conferences based on the maximum grant-in-aid equivalency limits for men’s basketball (13), women’s basketball (15) and football bowl subdivision (85), by institution.

The NCAA Board of Governors Finance and Audit Committee met and discussed that request. Their recommendation to the Board of Governors was that scenario No. 2 be used without any change to the NCAA percentage of 10 percent. The Board of Governors accepted that recommendation.

The memo concluded: “As we mentioned last summer, the NCAA will allow the conferences to pay these fees via a reduction in revenue distributions that currently go directly to the conferences, over a four-year period starting in 2022. If a conference prefers to pay the full amount in 2022 through a reduction of revenue distribution, that can also be accommodated.”

Below is what the NCAA describes as the final calculation for the fees, which include additional plaintiff’s attorney fees accumulated since last summer. 

Allocation breakdown

NCAA national office: $3,792,123 (10 percent)

Co-defendant conferences

American Athletic: $2,181,123 (5.8 percent)

Atlantic Coast: $2,726,404 (7.2 percent

Big 12: $1,817,603 (4.8 percent)

Big Ten: $2,544,644 (6.7 percent)

Conference USA: $2,544,644 (6.7 percent)

Pac-12: $2,181,123 (5.8 percent)

Mid-American: $2,181,123 (5.8 percent)

Mountain West: $1,999,363 (5.3 percent)

Southeastern: $2,544,644 (6.7 percent)

Sun Belt: $2,181,123 (5.8 percent)

Western Athletic: $1,454,082 (3.8 percent)

Co-defendant conferences subtotal: $24,355,875 (64.2 percent)

Non-defendant conferences

America East: $405,341 (1.1 percent)

Atlantic Sun: $360,304 (1.0 percent)

Atlantic 10: $630,531 (1.7 percent)

Big East: $450,379 (1.2 percent)

Big West: $405,341 (1.1 percent)

Big Sky: $495,417 (1.3 percent)

Big South: $495,417 (1.3 percent)

Colonial Athletic Association: $450,379 (1.2 percent)

Horizon League: $450,379 (1.2 percent)

Ivy League: $360,304 (1.0 percent)

Metro Atlantic Athletic: $495,417 (1.3 percent)

Mid-Eastern Athletic: $540,455 (1.4 percent)

Missouri Valley: $450,379 (1.2 percent)

Northeast: $450,379 (1.2 percent)

Ohio Valley: $540,455 (1.4 percent)

Patriot League: $450,379 (1.2 percent)

Southern: $450,379 (1.2 percent)

Southland: $585,493 (1.5 percent)

Southwestern Athletic: $450,379 (1.2 percent)

Summit League: $405,341 (1.1 percent)

West Coast: $450,379 (1.2 percent)

Other conferences subtotal: $9,773,233 (25.8 percent)

Total: $37,921,231 (100 percent)

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