NCAA, power conferences consider revenue-sharing deal

With the NCAA and its power conferences “in-depth discussions” To settle the House v. NCAA, more details have been revealed about what the future of college athlete compensation could look like.

House v. NCAA, filed in 2020 by former Arizona State swimmer Grant House, alleges that the NCAA’s name, image and likeness (NIL) rules violate both “the laws federal antitrust and common law.” The lawsuit, which was granted class-action status last November, seeks damages dating back to 2016 for athletes who were barred from obtaining compensation from NIL.

The lawsuit is expected to go to court in January 2025. Experts estimate that the NCAA could have to pay more than $4 billion if it loses the lawsuit, prompting prominent industry executives to lobby for ‘a settlement in recent months. Thursday afternoon, Ross Dellenger of Yahoo Sports reported that details of the settlement agreement were beginning to emerge as executives scrambled to meet a fast-approaching deadline set by lawyers.

According to ESPN, the NCAA “will likely foot the bill for a settlement expected to total more than $2.7 billion.” The parties proposed that “the NCAA national office – rather than its individual member schools or conferences – would pay for the settlement.” The payments will be made to “former college athletes who claim they were illegally prevented from making money from selling the rights to their name, image and likeness” dating back to 2016.

RELATED: NCAA in ‘extensive talks’ to settle groundbreaking NIL lawsuit

The details of the revenue sharing agreement that will be included are more important than the cost of the settlement. Dellenger reports that the deal, which is expected to last the next 10 years, could “cost each (conference) school up to $300 million over the decade, or $30 million per year.”

These costs would include “(1) an income distribution cap for athletes of $17 million to $22 million; (2) at least $2 million in NCAA distribution withheld for back injuries; and (3) up to $10 million in additional scholarship costs related to an expansion of sport-specific roster sizes – a previously little-recognized concept.

The $30 million annual figure equates to about 15 percent of Alabama and Auburn’s current annual athletic budgets.

According to Dellenger, “the revenue sharing portion of the new model is ‘permissive,'” meaning schools are not required to meet the cap or share revenue at all, even though failure to do so would put them in a significantly disadvantaged recruiting situation.

Schools would also be able to expand scholarships at their own discretion at “new enrollment limits that should be implemented in all sanctioned sports.”

The settlement deadline, set for the beginning of June, is fast approaching. Further details on the revenue sharing model are expected to be revealed in the coming weeks.

Charles Vaughan is a contributing writer for Yellowhammer News.