College sports leaders hold deep talks to settle NIL vs. NCAA antitrust lawsuit

College sports leaders are in “deep discussions” on a legal solution likely to set the framework for revenue sharing with athletes in a future NCAA business model, sources told ESPN. They say they are working on it.

The NCAA and its power conferences are defendants in an antitrust class action lawsuit called House of Representatives v. NCAA, in which the organization imposes limits on how athletes can earn money by selling the rights to their name, image and likeness. The lawsuit alleges that doing so violates federal law. The case is scheduled to go to court in January 2025. If the plaintiffs succeed in court, the NCAA and its schools could be liable for more than $4 billion in damages, motivating many industry leaders to seek a settlement.

A turning point in the ongoing discussions came last week in the Dallas area, when power conference commissioners, general counsel, NCAA President Charlie Baker, NCAA lawyers and plaintiffs' lawyers met, according to people familiar with the matter. (They chose the Dallas area because they were already there for the College Football Playoff meetings held in that area last week.)

Officials stressed that no agreement is imminent, but details about what the multibillion-dollar settlement would look like are expected to be shared with campuses in the near future. Although there are myriad variables before reaching the goal, and there are still some obstacles and opposition at the campus level, sources say progress has accelerated in recent weeks.

A settlement would provide some legal relief for the college sports industry, which has been plagued by lawsuits. It could also serve as a keystone in shaping a more stable future. The settlement is expected to cost billions of dollars in back pay to former athletes, and will also likely require the NCAA and conferences to agree to a system that would share more revenue with some players going forward. .

The maximum revenue share for each school, which would be set at around $20 million a year, has not yet been determined, sources said. Whatever number is set in the settlement, each school can opt in to share revenue up to that number with its student-athletes at its discretion. (You can choose to share less, but not more.)

For example, Texas A&M athletic director Trev Alberts recently told the Bryan-College Station Eagle that in what he called a “new expense category” in college athletics, the school is adding $15 million to $2,000 to its annual budget. He said it could add up to $10,000.

What is currently unknown is how this works. Will schools purchase NILs for athletes? What are the implications for Title IX?

The House case is one of four ongoing antitrust lawsuits, all of which threaten some of the remaining caps the NCAA imposes on athlete compensation. Veteran sports labor attorney Jeffrey Kessler is representing athletes in three of these cases, including the House case.

Kessler did not respond to a request for comment Monday. His co-counsel, Steve Berman, told ESPN on Monday: “Judge Wilken said he expected us to discuss a settlement given the length of litigation surrounding this issue and the fact that the parties are familiar with the strengths and weaknesses of each side. I am doing so.'' I simply followed the judge's instructions and there is nothing else to report. ”

In an interview with ESPN earlier this month, Kessler declined to comment on the possibility of negotiations, but said he feels a settlement is the quickest route to change in college sports.

“I can't guarantee it, but I think so.” [the defendants’] Their lawyers have told them they are likely to lose the case,” Kessler said. “If they lose, the damages will be huge. It is said that it is much better to take an active part in the resolution and decision-making of your future life and destiny.

The House suit includes two distinct classes of plaintiffs. The damages lawsuit is made up of former college athletes from past years, alleging the NCAA is obligated to backpay them money they could have earned had they been allowed to sign with NIL before 2021. There is. The injunction lawsuit also includes current college athletes. They argue that existing restrictions on the types of NIL contracts athletes can sign are also illegal.

In court testimony, economic experts hired by the plaintiffs argued that the damages class missed more than $1 billion in NIL opportunities in the years ending in 2021. In antitrust cases, courts have ordered defendants to pay three times the actual damages as punishment if they broke the law, resulting in an estimated $4 billion in legal losses.

“If we're going to compromise on an injunction, we're going to have to come to an agreement about what the future holds,” Kessler said. “If we settle the case for damages, that is essentially past consideration.”

Another pending antitrust case, also filed by Kessler, Carter v. NCAA, argues that the NCAA should not prevent schools from directly paying players for their performance. The two cases do not have to be resolved together, but the two parties likely hope to reach an agreement that is strong enough to avoid being sent back to court in the Carter case in the near future. Officials indicated to ESPN that the school likely wants protection from future lawsuits as part of the House lawsuit settlement.

In professional sports, revenue sharing agreements are typically entered into through collective bargaining agreements. If schools decide to share more property with their players, that could be the way to go for college sports, but there are several precedents for working out the details of collective bargaining agreements in lawsuit settlements. There is. For example, the NFL settled a lawsuit with Reggie White in 1993, which established the league's free agency and salary cap rules. One of the attorneys who represented White in this case was Jeffrey Kessler.

In addition to the threat of antitrust litigation, the National Labor Relations Board is also considering two lawsuits aimed at classifying college athletes as employees and allowing them to unionize.

NCAA leaders remain adamantly opposed to athletes becoming employees. But Baker, who took over as the association's president last March, said he wanted to find ways for some schools to offer more support to their players. In December, he proposed creating a new division that would require at least half of the wealthiest teams to pay players at least $30,000 a year.

“If you look at what Baker has been doing on the field, he seems very aware,” Kessler told ESPN earlier this month. “Some of the proposals he put forward in December, I'm not saying it's something we would compromise on, but certainly move in the direction of proposals to give players more compensation. That's what we're advocating.

The NCAA has also spent the past few years trying to persuade Congress to enact new rules governing college sports. Among the items they would like to include in federal law is a clause that would specify that college athletes are not employees. Congress has made no apparent progress on the bill so far, but a significant settlement in the House case demonstrating a commitment to future revenue sharing could convince some lawmakers to provide assistance to the NCAA. There is a possibility that