Big 12 Conference university presidents and chancellors voted unanimously on Tuesday to approve a potentially historic settlement in the landmark House v. NCAA case, marking the next step toward college sports green-lighting an industry-shifting revenue-sharing model.
Yahoo Sports was the first to report the news.
Each power conference is expected to vote on the settlement over the next few days, in anticipation of the NCAA’s Board of Governors potentially approving the agreement later this week. Attorneys for plaintiffs have set a hard deadline of Thursday for defendants – the NCAA and power conferences – to agree to settlement terms.
The proposed settlement would entail the NCAA and all 32 Division I conferences paying $2.77 billion in damages. It also would enable schools, at their discretion, to share as much as $22 million in revenue with athletes, according to a copy of the proposed settlement summary obtained by On3.
The Big 12 vote comes against the backdrop of forward-thinking commissioner Brett Yormark’s continued efforts to establish the conference as one of the most progressive and innovative in college sports. With a business pedigree that stands in sharp contrast with that of many traditional leaders in college sports, Yormark has sought to double down on league assets and make outside-the-box moves to tap into new revenue streams.
Rev-share model forces Big 12 schools to adapt
But the Big 12 is operating at a lower financial altitude than the two super conferences. It has a scarcity of nationally recognized big brands. In terms of revenue sharing, Iowa State Athletic Director Jamie Pollard illuminated the challenge faced by the Cyclones and many of their similarly resourced peers.
Opening the door to schools sharing revenue with athletes will mark a “drastic change,” Pollard said. With permissive legislation, Pollard acknowledged “you don’t have to do it, and, quite frankly, from talking to most of my peers, most of us have no idea how we will do it.”
Pollard knows he has a $100 million budget and can see the only way to give $20 million to athletes is only to spend $80 million.
“I don’t know where we’d get rid of the $20 – at least overnight,” he said. “That’s the million-dollar question or the $20 million question for all of us.”
Industry leaders face few attractive options in the face of a class-action lawsuit that sources say poses an existential threat to the NCAA. If the NCAA chooses to take the case to trial in January, it could face a possible $4.2 billion damages bill.
Still, some pushback has existed among stakeholders, in part, because they do not see a clear way the settlement provides protection from further lawsuits from future college athletes.
The settlement is expected to include an annual mechanism allowing future college athletes to opt-out from or object to settlement terms. That element won’t necessarily protect the NCAA from future litigation. But it could make it more difficult for larger (and far more costly) class-action suits to take hold.
On top of questions over protection from further litigation, many college leaders are grappling with how to budget appropriately in the new age of revenue sharing.
One industry source told On3: “Most ADs are like, ‘OK, we know it’s coming. How do I practically apply that to my day-to-day budgeting? How many years is it spread out? What are the requirements for spending? Can it be paid through a third-party group? Do I have to cut sports?’ Everyone is discussing that.”
The post Big 12 leaders vote to approve settlement in House v. NCAA antitrust case appeared first on On3.