Jon Wilner
Pac-12 presidents and chancellors haven’t presented a unified front in years, but they are expected to vote together this week and approve the settlement terms of a massive anti-trust lawsuit against the NCAA that carries billions of dollars in damages and will create groundbreaking economic changes for college sports.
“I don’t see a scenario where they don’t (approve),” an industry source said. “It’s to everybody’s benefit to settle.”
Each of the Power Five conferences is a named defendant in the House v. NCAA lawsuit and must formally approve the settlement in voting blocs that align with current conference membership — not as the leagues will look in the fall after the breakup of the Pac-12.
The Big 12 and ACC were the first conferences to sign off on the House settlement terms, with their presidents reportedly voting on Tuesday.
SEC and Big Ten presidents must do the same, along with the NCAA’s Board of Governors.
The Pac-12 presidents and chancellors will meet later this week on a video call — Thursday is the targeted day — and are expected to approve the deal as well, according to an industry source.
The settlement reportedly includes approximately $2.8 billion in damages. But if the class-action case goes to court as scheduled in late January, the damages could zoom past $10 billion and potentially send the NCAA into bankruptcy.
Named for Grant House, a former Arizona State swimmer, the lawsuit was given class status last fall by Judge Claudia Wilken of the Northern District of California, meaning the damages would be tripled if the NCAA loses.
It can be separated into two buckets:
— The damages portion attempts to compensate thousands of former college athletes for the use of their name, image and likeness (NIL) during the five years prior to NIL becoming legal under NCAA rules in the summer of 2021.
— The injunctive portion aims to create a revenue-sharing plan between athletic departments and current/future athletes that’s based on the use of their NIL in the media rights deals conferences have signed with TV networks.
According to the settlement terms reported by ESPN and Yahoo, athletic departments across Division I will create what’s called a permissive revenue-sharing cap of approximately $20 million annually — meaning each school can share up to that amount with athletes but isn’t obligated to hit the mark.
(Schools that don’t pay the maximum amount could suffer consequences in recruiting.)
The settlement also will force schools to expand roster sizes in certain sports, a move expected to add $10 million in annual expenses.
Many details must be resolved, including the Title IX implications. But the revenue-sharing plan and roster expansion — a $30 million annual wallop — likely would not take effect until the 2025-26 school year, at the earliest.
Meanwhile, the NCAA plans to cover the House damages using its reserve funds and by withholding a portion of its annual distributions to the schools — distributions based on the $900 million (approximately) March Madness contracts with CBS and Turner.
The NCAA’s withholdings are expected to take place over the course of a decade and cost each of the major football-playing schools roughly $2 million.
How will that play out in the Pac-12, where 10 universities are leaving for other conferences on Aug. 2?
Legal liabilities were included in the mediated settlement between Washington State and Oregon State and the 10 departing schools.
Although that section of the 31-page document was heavily redacted, Eric MacMichael, an attorney for WSU and OSU, told the Hotline this spring that “the House case was front and center in our thinking.
“We had to address that. It’s an existential case for the NCAA and all the (named) conferences.”
In other words, WSU and OSU were wary of holding the bill for the 10 departing schools. And the 10 departing schools didn’t want to have to pay double damages, with the NCAA withholding their distributions as members of the Pac-12 and their new conferences.
Details are murky. But according to an industry source, NCAA officials, conference commissioners and key attorneys have discussed how to handle the damages for schools that are changing leagues this summer.
“The two (WSU and OSU) are not getting stiffed, and the 10 are not getting stiffed — they aren’t having their shares reduced twice,” the source said.
“There is a ton of alignment on that issue given the membership changes.”
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