NCAA, Power 5 conferences release statement on House settlement

The NCAA Board of Governors and the Power 5 conferences have all voted to sign off on the settlement agreement in the House v. NCAA lawsuit.

On Thursday night, following the Pac-12 Conference university presidents and chancellors voting on the settlement, the group of six defendants released a statement on the decision to sign off on the agreement. Attorneys for plaintiffs had set a hard deadline of Thursday for the NCAA and power conferences to agree to settlement terms.

“The five autonomy conferences and the NCAA agreeing to settlement terms is an important step in the continuing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come,” the Power 5 commissioners and NCAA president Charlie Baker said in a joint statement. “This settlement is also a road map for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unmatched opportunity for millions of students. All of Division I made today’s progress possible, and we all have work to do to implement the terms of the agreement as the legal process continues.

“We look forward to working with our various student-athlete leadership groups to write the next chapter of college sports.”

Terms of the settlement will still need to be presented to Judge Claudia Wilken. House v. NCAA is playing out in California Northern District Court. What could be a months-long process, Wilken will have the power to approve or deny the settlement. Sources have indicated to On3 that Wilken may not support a framework prohibiting athletes from entering future lawsuits.

Of the $2.77 billion expected to be paid in back damages to former athletes, the NCAA is expected to be responsible for 40% of the payout. The other 60% will come from a reduction in school distributions.

The question then shifts to when this framework is put in place. Power conference schools will obviously need to opt-in or opt-out of the revenue-sharing portion. Schools would disperse roughly $20 million annually to athletes. It remains unclear how Title IX would factor into payouts and how distribution would be split. If everything goes smoothly this week and in the coming months, the soonest this structure would begin is the 2025-26 academic year.

“Today there is widespread recognition among college-sports athletes and fans that there is no justification for the NCAA to continue prohibiting college athletes from sharing in the massive revenues that they generate for their schools and conferences,” attorney Jeffrey Kessler, of the firm Winston & Straw, said in a statement. “We have been marching down this long legal road seeking economic justice in college sports for more than a decade, but the time to bring a fair compensation system to college athletes has finally arrived.”

Why House case posed existential threat to NCAA

Industry leaders throughout college sports 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 filed by 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.”

Eric Prisbell contributed to this story