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NCAA and Power Conferences prepare for unprecedented vote on revenue sharing with athletes

College presidents across the country will meet this week to vote on whether to accept a proposed settlement of an antitrust lawsuit that would cost the NCAA nearly $3 billion and create a historic revenue-sharing system with college athletes. .

The terms of the agreement have met with some pushback from Division I conferences that do not compete in major college football. Leaders of those leagues say they are being asked to shoulder an undue financial burden for the damages portion of the settlement.

Lawyers for the defendants in House v. The NCAA gave college sports leaders until Thursday to come to an agreement on the terms of the deal. The defendants are the NCAA and the Power Five conferences: the Atlantic Coast, the Big Ten, the Big 12, the Pac-12 and Southeastern.

The NCAA presidential boards and the five conferences must vote individually to accept the agreement. That includes the entire current Pac-12 membership before that league shrinks to two schools later this summer.

The NCAA is expected to cover about $2.7 billion in damages over 10 years to current and former college athletes, dating back to 2016, who were denied the ability to earn money from sponsorship and endorsement deals by NCAA rules.

About $1.6 billion of that amount will come from distributions withheld from member schools, money that the NCAA would normally send to the schools, according to several people with direct knowledge of the proposal. They spoke to The Associated Press on condition of anonymity because details of the deal were not publicly discussed.

FILE – The College Football Playoff logo is displayed on the field at AT&T Stadium before the NCAA Rose Bowl college football game between Notre Dame and Alabama in Arlington, Texas, Jan. 1, 2021. Conference commissioners administration of the College Football Playoff met on Wednesday, August 30, 2023, for the first time since a wave of realignment tore through the Pac-12, raising the possibility that the number of automatic bids in the playoff format could be changed. 12-team postseason to be implemented next year.(Roger Steinman / ASSOCIATED PRESS)

Withheld distributions from the Power Five conferences, currently comprised of 69 schools, are scheduled to cover 40% of that $1.6 billion. The other 27 Division I conferences, currently made up of 283 schools, will cover the remaining 60%.

While the Power Five receive the largest total distributions from the NCAA annually (and their per-school deduction would be larger under the NCAA’s proposed model), schools in conferences that do not play large-scale football rely much more heavily on those distributions. to support much smaller budgets.

“Basketball-focused leagues are really getting hit,” said an administrator from a conference that does not compete at the highest level of Division I football, known as the Bowl Subdivision.

The NCAA distributes about $700 million to its members annually. The NCAA’s revenue was nearly $1.3 billion last year, most of which came from its television rights deal for the Division I men’s basketball tournament with CBS and Warner Bros. Discovery.

Under the proposed agreement, each conference’s obligation will be equal to its percentage of the NCAA’s total distribution to its members between 2016 and 2024, two of the people with knowledge of the agreement told the AP. The NCAA has about 1,100 member schools with more than 500,000 athletes in three divisions; Division I, the highest level of competition and by far the most lucrative, has about 352 schools and 190,000 athletes.

The administrator who spoke to the AP said that in some smaller Division I conferences, NCAA distributions account for more than 50% of a school’s athletic revenue; distributions represent less than 10% of athletic revenue at most power conference schools.

Leaders of smaller conferences have sent several memos to the NCAA to express their concerns. In a letter, obtained by the AP on Monday, the conferences outside the Bowl Subdivision said they support the need for an agreement.

“However, as commissioners of non-defendant Division I conferences, we do not support the NCAA’s current proposed model for allocating back damages, which unreasonably impacts our conferences,” the commissioners wrote. “We have not been involved in settlement negotiations or damage allocation modeling, and we learned of the status of the settlement two weeks ago.”

The memo proposed that Power Five conferences cover about 60% of the $1.6 billion, essentially reversing the plan’s 60-40 share.

“It affects us more. We rely on NCAA distributions,” said another administrator from a non-FBS football conference.

Going forward, it will be the Big Ten, the Big 12, the ACC and the SEC that will carry most of the financial burden in a revenue-sharing system that asks each of its schools to commit more than 20 million dollars a year for 10 years to pay directly to Athletes. The overall commitment is expected to be about $300 million per school.

Steve Berman, one of the lead attorneys for the plaintiffs, told the AP last week that he believed both sides were moving toward a settlement in the case. NCAA President Charlie Baker said he was “hopeful” a deal would be reached.

ACC Commissioner Jim Phillips said his board of presidents and chancellors would meet this week to vote on the proposal, and that a simple majority would be needed to approve it. The Big 12 chairs are scheduled to meet Tuesday and the SEC chairmen have a meeting planned for Thursday, people familiar with those meetings told the AP.

Big Ten officials will gather in Los Angeles this week for their spring meetings.

The NCAA Division I Board of Directors and Board of Governors must also approve the settlement, which will cover the House case and at least two other antitrust lawsuits: Hubbard v. NCAA and Carter v. NCAA. It was unclear whether another lawsuit, Fontenot v. the NCAA will be part of the agreement.

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