SEC leaders vote to approve settlement in House v. NCAA antitrust case

Southeastern Conference university presidents and chancellors voted to approve a historic settlement in the landmark House v. NCAA case, one of the final steps toward college sports green-lighting an industry-shifting revenue-sharing model.

On3 confirmed the news, which was first reported by Yahoo Sports.

The vote comes after the NCAA Board of Governors and three other power conferences – the Big Ten, Big 12 and ACC – approved settlement terms. Attorneys for plaintiffs set a hard deadline of Thursday for defendants – the NCAA and power conferences – to agree to settlement terms. 

The proposed settlement entails the NCAA and all 32 Division I conferences paying $2.77 billion in damages. It also would enable schools, at their discretion, to share as much as $22 million in revenue with athletes, according to a copy of the proposed settlement summary obtained by On3.

What’s next? In the coming months, U.S. District Judge Claudia Wilken will need to certify the settlement agreement, and represented athletes in the case will have the opportunity to opt-out.

The SEC – and the Big Ten – operate in a different stratosphere than their power conference cohorts – and the gap is only growing significantly wider. Both leagues wield enormous leverage, and there is little other leagues can do to stand in the way of changes the super conferences endorse.

SEC schools prepared for revenue-sharing world

Many SEC schools are well-positioned in the age of revenue sharing, thanks in large part to a lucrative league media rights deal and the new College Football Playoff revenue-distribution model. But even in the rarefied air of the SEC, schools still need to make necessary adjustments as college sports enters a brave new financial world.

For instance, Texas A&M Athletic Director Trev Alberts announced cuts of more than 12 staff members in a “reorganization related to existing and emerging threats to our business model.”

At Missouri, the contract for new athletic director Laird Veatch includes a force majeure provision related to “potential changes to the financial model for collegiate athletics given pending litigation and legislation.” Such changes to the collegiate model would prompt compensation to be renegotiated.

Why House case posed existential threat to NCAA

Industry leaders face few attractive options in the face of a class-action lawsuit that sources say poses an existential threat to the NCAA. If the NCAA chooses to take the case to trial in January, it could face a possible $4.2 billion damages bill. 

Still, some pushback has existed among stakeholders, in part, because they do not see a clear way the settlement provides protection from further lawsuits from future college athletes.

The settlement is expected to include an annual mechanism allowing future college athletes to opt-out from or object to settlement terms. That element won’t necessarily protect the NCAA from future litigation. But it could make it more difficult for larger (and far more costly) class-action suits to take hold.

On top of questions over protection from further litigation, many college leaders are grappling with how to budget appropriately in the new age of revenue sharing. 

One industry source told On3: “Most ADs are like, ‘OK, we know it’s coming. How do I practically apply that to my day-to-day budgeting? How many years is it spread out? What are the requirements for spending? Can it be paid through a third-party group? Do I have to cut sports?’ Everyone is discussing that.”