NCAA, Major Conferences Take Next Dynamic Step In NIL Class-Action Lawsuit

NYSJ Sports-Entertainment Business News Service

July 26, 2024: The next major move in the ongoing and complicated process involving the NCAA, the Autonomy 5 conferences, student-athletes and finances including NIL, has taken place.

According to all parties, “Formal settlement documents were filed with the Northern District Court of California Friday to advance the settlement approval process to resolve class-action lawsuits involving the NCAA and the Autonomy 5 Conferences: Atlantic Coast Conference, Big Ten, Big 12, Pac-12 and Southeastern Conference.

The 300-plus page settlement documents address three cases — "House v. NCAA", "Hubbard v. NCAA" and "Carter v. NCAA" — involving back damages and future benefits for Div. I student-athletes.

According to those involved, the settlement would see total back damages of approximately $2.78 billion, to be paid over ten years, equating to approximately $280 million annually with distribution of back damages as determined by plaintiffs.

An estimated 83% of the back pay — $2.3 billion — is expected to go to some 19,000 football and men’s basketball players, an average of about $120,000 per player over the ten-year period, or $12,000 a year.

The commissioners of the five conferences include ACC commissioner Jim Phillips, Ph.D., Big Ten commissioner Tony Petitti, Big 12 commissioner Brett Yormark, Pac-12 commissioner Teresa Gould and SEC commissioner Greg Sankey.

"This is another important step in the ongoing effort to provide increased benefits to student-athletes while creating a stable and sustainable model for the future of college sports," said the commissioners of the five conferences and NCAA president Charlie Baker via the NCAA.

"While there is still much work to be done in the settlement approval process, this is a significant step toward establishing clarity for the future of all of Div. I athletics while maintaining a lasting education-based model for college sports, ensuring the opportunity for student-athletes to earn a degree and the tools necessary to be successful in life after sports."

The parties said the settlement addresses three primary issues: payment of back damages for claims relating to name, image and likeness (NIL), academic-related awards and other benefits; increased benefits from institutions to student-athletes going forward, including additional NIL opportunities for student-athletes directly with the institution; and eliminating scholarships limits in favor of roster limits.

The settlement must be approved by the court before it becomes final, a process they said could take several months.

“Under the new model, institutions may pay student-athletes directly for their NIL rights,” according to the NCAA and the five Conference commissioners. “Any institutional NIL payments would apply toward the 22% cap.

“Third parties may continue to enter into NIL agreements with student-athletes. Such agreements will be subject to review to ensure they are legitimate, fair market value agreements and not used for pay-for-play.  NIL payments by third parties would not apply toward the 22% cap but must be disclosed to a clearinghouse for review.

“The new model allows for the establishment of a robust and effective enforcement and oversight program to ensure the new NIL model achieves its objectives.

“The establishment of a clearinghouse for NIL payments over $600 would give institutions access to information about external NIL activities, providing a level of transparency that does not currently exist to allow for better management of third-party influence and better assurance of legitimate NIL activity.

“Lastly, scholarship limits will be eliminated in all sports, and roster limits will be established. Institutions have the discretion to offer partial or full scholarships provided they do not exceed the roster limits. This change will allow institutions to provide additional scholarships to student-athletes in the future.”

While approval of the settlement would be a significant step forward, there would still be pending issues to be addressed that highlight the continuing need for federal legislation, they said.

"This settlement is an important step forward for student-athletes and college sports, but it does not address every challenge," said the Autonomy 5 Conference commissioners and NCAA president.

"The need for Federal legislation to provide solutions remains. If Congress does not act, the progress reached through the settlement could be significantly mitigated by state laws and continued litigation."

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