Vote expected this week to settle NCAA class-action lawsuit

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a sea change in college sports could be put into motion this week. Details from The Athletic:


This week, the NCAA and power conferences are expected to vote on whether to settle a federal class-action lawsuit that would cost them nearly $3 billion in damages and allow power-conference athletes to finally share in annual revenues.

House v. NCAA seeks back pay for Division I college athletes who were barred from earning name, image and likeness (NIL) compensation prior to the NCAA changing its policy in summer 2021, while also pursuing a cut of future broadcast revenues for athletes at power-conference schools.

In addition to more than $2.7 billion in NIL back-pay damages, a settlement would include a system in which roughly $20 million a year can be distributed directly from a power-conference school to its athletes, multiple people briefed on the negotiations confirmed to The Athletic.

A settlement would also address another major NCAA issue by simultaneously resolving other high-profile antitrust cases, including Hubbard v. NCAA and Carter v. NCAA.

Hubbard is similar to House in the sense that it is seeking retroactive damages for education-related Alston payments; Carter argues that rules prohibiting college athletes from receiving “pay for play” violate antitrust law. A House settlement would resolve each of them.

If approved, the power-conference revenue sharing will be optional, and there are no specifications on how the money will be distributed, as long as it stays within the capped allotment.

It’s expected that most if not all power-conference programs will opt in to some degree of revenue sharing in order to remain competitive. But even for a number of the schools at that level, it could be a gradual financial process that requires cuts elsewhere.

What about NIL collectives? A settlement wouldn’t fully address the role of these third-party organizations and the culture of pay for play, though Yahoo Sports reported that the informational documents it obtained mentioned “economic incentives” for athletic departments to bring collectives in-house.


(other issues to be resolved include how Title IX plays into this - and whether athletes would still be able to consider joining unions and seeking collective bargaining of payments/benefits. adjustments could also be made to scholarship rules - so a baseball team with 25 players would receive 25 full scholarships instead of splitting up 12 scholarships among 25 players. this could impact football by essentially doing away with walk-ons.)
 

In regards to this line in the article: "It’s expected that most if not all power-conference programs will opt in to some degree of revenue sharing in order to remain competitive. But even for a number of the schools at that level, it could be a gradual financial process that requires cuts elsewhere."

If you're in the B1G or SEC there is no option as to whether you will opt-in to revenue sharing. If it was announced that lets say MN says they are not immediately opting in and the majority of the other B1G programs announce they are then you should just go ahead and say you're leaving the conference. Otherwise, the next time the portal opens maybe 80-90% of the team is gone. At least anyone who is anywhere near to a starting role.

I thought the last line was interesting in that this could end PWOs for the football program. The coaches are going to love that development.
 

Update - the Big 12 Presidents and Chancellors have voted Yes to settle. the vote was unanimous. the B12 is the first of 6 named parties to vote this week. (per Pete Thamel)
 

Sounds like reparations to me. How about those athletes from the 80’s and 90’s?
 

a sea change in college sports could be put into motion this week. Details from The Athletic:


This week, the NCAA and power conferences are expected to vote on whether to settle a federal class-action lawsuit that would cost them nearly $3 billion in damages and allow power-conference athletes to finally share in annual revenues.

House v. NCAA seeks back pay for Division I college athletes who were barred from earning name, image and likeness (NIL) compensation prior to the NCAA changing its policy in summer 2021, while also pursuing a cut of future broadcast revenues for athletes at power-conference schools.

In addition to more than $2.7 billion in NIL back-pay damages, a settlement would include a system in which roughly $20 million a year can be distributed directly from a power-conference school to its athletes, multiple people briefed on the negotiations confirmed to The Athletic.

A settlement would also address another major NCAA issue by simultaneously resolving other high-profile antitrust cases, including Hubbard v. NCAA and Carter v. NCAA.

Hubbard is similar to House in the sense that it is seeking retroactive damages for education-related Alston payments; Carter argues that rules prohibiting college athletes from receiving “pay for play” violate antitrust law. A House settlement would resolve each of them.

If approved, the power-conference revenue sharing will be optional, and there are no specifications on how the money will be distributed, as long as it stays within the capped allotment.

It’s expected that most if not all power-conference programs will opt in to some degree of revenue sharing in order to remain competitive. But even for a number of the schools at that level, it could be a gradual financial process that requires cuts elsewhere.

What about NIL collectives? A settlement wouldn’t fully address the role of these third-party organizations and the culture of pay for play, though Yahoo Sports reported that the informational documents it obtained mentioned “economic incentives” for athletic departments to bring collectives in-house.


(other issues to be resolved include how Title IX plays into this - and whether athletes would still be able to consider joining unions and seeking collective bargaining of payments/benefits. adjustments could also be made to scholarship rules - so a baseball team with 25 players would receive 25 full scholarships instead of splitting up 12 scholarships among 25 players. this could impact football by essentially doing away with walk-ons.)


There is zero chance the $20M limit won’t be challenged. That figure is pulled straight out of thin air? Laughably low. The plaintiffs can’t and don’t speak for anyone but themselves. This group of attorneys will get their payday, then a new round of plaintiffs will file suit versus the NCAA and schools.
 


More likely the figure will be used as a negotiating point and upped rather quickly. Or some loophole will be in place to allow for ways around it.
 

and the ACC says "Yes." two conferences down, 3 to go. assuming the other conferences and the NCAA Board of Governors all sign on, then this happens (according to The Athletic)

Once the NCAA and power conferences agree on the terms and both sides in the case sign off, the settlement will be submitted to Judge Claudia Wilken of the U.S. District Court for the Northern District of California for preliminary approval. If that gets granted, there would be a set period of roughly 90 days in which those in the retroactive damages class have an opportunity to opt out, and those in the future revenue-sharing class can object to the terms of the agreement. That’s followed by a final approving hearing, at which point, if the judge approves, the settlement officially goes into effect.

FWIW - as I read it, the $20-million figure is an estimate - amounting to roughly 22% of revenue for one of the P5 schools.

I still can't find a definitive answer on what happens with NIL - whether it gets rolled into the revenue-sharing structure or if NIL remains outside of the revenue-sharing?
 

another one signs on the dotted line......

according to Adam Rittenberg:

"sources confirm Big Ten presidents/chancellors voted to approve settlement terms in the House vs. NCAA case."

the 18-member league held its first in-person meeting with presidents, chancellors, football and basketball coaches this week in California.
 

and another.....

The NCAA Board of Governors has voted to approve the proposed settlement.

that leaves the SEC and the Pac-12 (yes, the Pac-12 still gets a vote......)

odds going up that this thing is going to happen.
 



and another.....

The NCAA Board of Governors has voted to approve the proposed settlement.

that leaves the SEC and the Pac-12 (yes, the Pac-12 still gets a vote......)

odds going up that this thing is going to happen.

Looking closer, the $2.7B backpay payment (for 2016–present athlete certified class) will be footed by the NCAA (40%) and the balance by the 32 NCAA conferences based on a formula using historical NCAA basketball tournament TV distributions. Of the latter, the P5 will only foot about 40% and the dreg leagues the rest. The Big East has protested this, as it makes little sense and is regressive, but they have no leverage.

As an aside, when Judge Wilken initially created the certified classes there were three: the men’s positive revenue sports players (football/basketball), women’s basketball players, and everyone else. The men’s TV contracts accounted for 96% of revenue.

Can you imagine the infighting, clawing, biting, pinching, kicking about who gets what from the backpay class as well as divvying up future revenue and school NIL deals. Bob, is this is what’s called a “target-rich environment”? Holy smokes. And, this is before class holdouts, future athlete lawsuits get rolling. Are you not entertained.




 


So who gets paid here?

Mainly the attorneys…j/k but no, really. The fact is nobody has devised a mechanism yet to determine who gets what and that could vary wildly pending negotiations and legal challenges. The devil is always in the details. The article below notes another issue with the settlement, an effort by the plaintiffs attorney to violate the Sherman Antitrust Act of 1892 in practice if not letter of law by inserting automatic class inclusion for future athletes, undermining incentive for an attorney or attorneys from challenging the proposed collusion/distribution cap. Will Judge Wilken play along? I doubt it, but who knows. See here:



It's not uncommon that in order to get something across the finish line, you have to agree to leave a whole lot of things unresolved," an industry source said. "I think the settlement is a good thing, but there are implementation issues that are really significant."

The list of lingering uncertainties is a long one, including Title IX ambiguity, lack of direction on revenue sharing, the future role of booster collectives and the potential for rosters to be radically reshaped.

At the top of the list of those significant question marks is a concern that the terms of the settlement won't be sufficient to fend off future legal claims that the NCAA and its schools are violating the law by placing any caps on the way schools can compensate players.

Steve Berman, co-lead counsel for the plaintiffs in the House case, said he believes he has devised a mechanism to solve this issue. Berman has proposed that future athletes -- not part of the current class-action lawsuit -- would be added to the class on an annual basis. They'd receive an opportunity to opt out of the class or object to the terms of the settlement.



 




some items from an ESPN story. notable - if the NCAA did not settle, and the plaintiffs won at trial, triple damages would be awarded. there was a real chance that the NCAA could go bankrupt. this settlement also rolls in other anti-trust cases to try and stave off other court challenges.

also - the vote is to agree to a framework for settlement. the details still have to be finalized, which will be a months-long process.

I'm not saying this is a perfect situation. but my read is that - even with all of the issues Pompous is pointing out - the NCAA still saw this as the least bad of several bad possibilities.


from ESPN:
By settling, the schools and the NCAA avoid going to trial, where they could have been on the hook for damages in excess of $4 billion if they lost, which legal experts considered a likelihood considering the NCAA's recent poor record in court cases. According to sources, the plaintiffs will also agree to dismiss two other pending antitrust cases against the NCAA that could have potentially added billions of dollars in damages to an already daunting total.

College athletics leaders have widely acknowledged that while a settlement in the House case is a significant step forward, it will not solve all of the legal and governance issues that have destabilized their former business model. While some university leaders are skeptical that the settlement will provide a clear path forward and other college sports leaders took issue with how the financial burden of settlement payments would be shared among conferences, sources have told ESPN that an agreement is widely expected to arrive by the end of the week. Leagues need only a majority vote to approve of the current terms.

Sources have indicated it will take at least six months to sort through details, such as how Title IX laws will apply to future payments and whether they can curtail spending in the NIL marketplace.

While the agreement is a major step forward, several steps remain before the lawsuits are officially settled. The two sides will have to present a more detailed settlement agreement to Judge Claudia Wilken, and all Division 1 athletes will have multiple months to review the terms and decide if they want to object or opt out of the class action settlement. This process will take months to reach a conclusion.
 

some items from an ESPN story. notable - if the NCAA did not settle, and the plaintiffs won at trial, triple damages would be awarded. there was a real chance that the NCAA could go bankrupt. this settlement also rolls in other anti-trust cases to try and stave off other court challenges.

also - the vote is to agree to a framework for settlement. the details still have to be finalized, which will be a months-long process.

I'm not saying this is a perfect situation. but my read is that - even with all of the issues Pompous is pointing out - the NCAA still saw this as the least bad of several bad possibilities.


from ESPN:
By settling, the schools and the NCAA avoid going to trial, where they could have been on the hook for damages in excess of $4 billion if they lost, which legal experts considered a likelihood considering the NCAA's recent poor record in court cases. According to sources, the plaintiffs will also agree to dismiss two other pending antitrust cases against the NCAA that could have potentially added billions of dollars in damages to an already daunting total.

College athletics leaders have widely acknowledged that while a settlement in the House case is a significant step forward, it will not solve all of the legal and governance issues that have destabilized their former business model. While some university leaders are skeptical that the settlement will provide a clear path forward and other college sports leaders took issue with how the financial burden of settlement payments would be shared among conferences, sources have told ESPN that an agreement is widely expected to arrive by the end of the week. Leagues need only a majority vote to approve of the current terms.

Sources have indicated it will take at least six months to sort through details, such as how Title IX laws will apply to future payments and whether they can curtail spending in the NIL marketplace.

While the agreement is a major step forward, several steps remain before the lawsuits are officially settled. The two sides will have to present a more detailed settlement agreement to Judge Claudia Wilken, and all Division 1 athletes will have multiple months to review the terms and decide if they want to object or opt out of the class action settlement. This process will take months to reach a conclusion.

There 6-12 month comment phase is enough time for Huma and Jason Stahl, yes that Jason Stahl (still furiously typing at the corner desk?) to organize athletes to protest en masse the low proposed cap on revenue sharing. Ie some CBA entity with or without employee status (which is yet another layer to this). They each lead competing (AFAIK) player union efforts.

The current appeasement settlement ought to be insulting to the players. But, probably like herding cats.



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The kids should have always been paid to play, and the chickens have come to roost. This makes our entire post secondary educational system look foolish and weaker than it already looked. I love Gopher football, but I hate what this both represents and what it looks like. They got in bed with the NCAA, made their money, and now it's come back around. I'd like to know at what specific point in history it stopped being about education and started being about money.
 

The kids should have always been paid to play, and the chickens have come to roost. This makes our entire post secondary educational system look foolish and weaker than it already looked. I love Gopher football, but I hate what this both represents and what it looks like. They got in bed with the NCAA, made their money, and now it's come back around. I'd like to know at what specific point in history it stopped being about education and started being about money.
Interesting question. Not from day one. Maybe day two?
 

What about those poor oppressed players that were ineligible to play varsity as freshmen back in the 60’s? Should it they get a cut? Or the 5th—12th place FB teams that are denied a shot at the title in past years? 🙄 Where would this end? You played by the rules that were in place at the time. The lawsuit is BS and capitulating just feeds the problem.
 

The kids should have always been paid to play, and the chickens have come to roost. This makes our entire post secondary educational system look foolish and weaker than it already looked. I love Gopher football, but I hate what this both represents and what it looks like. They got in bed with the NCAA, made their money, and now it's come back around. I'd like to know at what specific point in history it stopped being about education and started being about money.

Well, I’ll make sure to bring this up when the athletes in money-losing sports are arguing to co-opt (or redistribute) a chunk of positive cash-flowing sport NIL distributions, or demand to be paid as employees. They “deserve” none of it, either. Let’s get the bickering started.

To be clear, the players in positive-revenue sports deserve the six and seven figure salaries money way, way, WAY more than Coyle or PJ or the tennis coaches or staff member XYZ depending on value to the team but the collateral damages that go along with the transition to a professional league could be significant and the enmity around Title IX amplified exponentially (and in an election year no less).
 

Interesting question. Not from day one. Maybe day two?
My point is, there was a time when it was about pride and beating the other team because they were a rival, and then at some point it became about trademarking logos and the school ensuring that they were getting their cut for every dollar made selling a product, whether it was an item or the product on the field. There is a long history generally where college football either didnt generate any revenue or it was negligible in terms of what a school brought in overall. When did that change? Media rights?
 

Well, I’ll make sure to bring this up when the athletes in money-losing sports are arguing to co-opt (or redistribute) a chunk of positive cash-flowing sport NIL distributions, or demand to be paid as employees. They “deserve” none of it, either. Let’s get the bickering started.

To be clear, the players in positive-revenue sports deserve the six and seven figure salaries money way, way, WAY more than Coyle or PJ or the tennis coaches or staff member XYZ depending on value to the team but the collateral damages that go along with the transition to a professional league could be significant and the enmity around Title IX amplified exponentially (and in an election year no less).
Pay em all, they all have an (excellent) argument if a school classifies its athletes as employees. I'm not here to debate whether that's right or wrong, this is the situation they created and the piper's here to collect.
 

What about those poor oppressed players that were ineligible to play varsity as freshmen back in the 60’s? Should it they get a cut? Or the 5th—12th place FB teams that are denied a shot at the title in past years? 🙄 Where would this end? You played by the rules that were in place at the time. The lawsuit is BS and capitulating just feeds the problem.
I always keep my speeding tickets. That way if they ever raise the speed limit to how I fast I was going, I can turn them in and get a refund.
 

on how we got here: athletes saw schools and conferences hauling in hundreds of millions of dollars in TV rights to show games featuring....the athletes. but the athletes were told, "you're amateurs - you don't get any of that money." likewise, schools made money selling jerseys and other merchandise with the players' names and numbers on them - and the players got nothing.

meanwhile, coaches were making more and more money. and coaches could jump from job to job with no consequences, while if a player wanted to transfer to a different school, they had to sit out a year.

at some point, the players said "we're getting hosed. we play the games. we're the ones the people are coming to see in person or on TV. without us, there is no game and no revenue. we deserve a share."

the NCAA could have been pro-active and worked something out a lot sooner, but they didn't. then the lawsuits started, and the NCAA kept losing in court; all the way up to the Supreme Court. If the NCAA would have started a modest revenue-sharing system 5 years ago, NIL as we know it may never have come into being. instead, the NCAA tried to cling to the amateur model, and it cost them big time.
 

Oh - if you missed it, all of the conferences have voted yes, and the proposed settlement moves to the next step. from ESPN:

The NCAA and its five power conferences have agreed to allow schools to directly pay players for the first time in the 100-plus-year history of college sports.

The NCAA and its leagues are moving forward with a multibillion-dollar agreement to settle three pending federal antitrust cases. The NCAA will pay more than $2.7 billion in damages over 10 years to past and current athletes, sources told ESPN. Sources said the parties also have agreed to a revenue-sharing plan allowing each school to share up to roughly $20 million per year with its athletes.

"The five autonomy conferences and the NCAA agreeing to settlement terms is an important step in the continuing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come," NCAA president Charlie Baker and the five power conference commissioners said in a joint statement Thursday evening.
Notre Dame also agreed to the settlement as a member of the ACC.

"The settlement, though undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics," Notre Dame president John I. Jenkins said in a statement. "To save the great American institution of college sports, Congress must pass legislation that will preempt the current patchwork of state laws; establish that our athletes are not employees, but students seeking college degrees; and provide protection from further antitrust lawsuits that will allow colleges to make and enforce rules that will protect our student-athletes and help ensure competitive equity among our teams."
(Attorney Steve) Berman told ESPN that a series of formulas devised by a sports economist will be used to decide how to split the $2.7 billion in damages among more than 10,000 former and current athletes. He said some money will be split evenly among all members, but other parts will be allocated based on the athlete's market value. Metrics such as career snap count or a player's star rating in recruiting might determine their payout, he said.

Gathering data to plug into that formula could be a complicated process, and Berman said he's hoping schools will provide "granular data" rather than requiring players to submit claims by themselves.
Berman said the settlement includes a "mechanism" that he believes will make it easier for schools to rein in the marketplace for third-party NIL deals. He declined to provide any further details. Several athletic directors told ESPN this week that they were optimistic but uncertain about whether the settlement would give them enough legal room to regain control.
 

Oh - if you missed it, all of the conferences have voted yes, and the proposed settlement moves to the next step. from ESPN:

The NCAA and its five power conferences have agreed to allow schools to directly pay players for the first time in the 100-plus-year history of college sports.

The NCAA and its leagues are moving forward with a multibillion-dollar agreement to settle three pending federal antitrust cases. The NCAA will pay more than $2.7 billion in damages over 10 years to past and current athletes, sources told ESPN. Sources said the parties also have agreed to a revenue-sharing plan allowing each school to share up to roughly $20 million per year with its athletes.

"The five autonomy conferences and the NCAA agreeing to settlement terms is an important step in the continuing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come," NCAA president Charlie Baker and the five power conference commissioners said in a joint statement Thursday evening.
Notre Dame also agreed to the settlement as a member of the ACC.

"The settlement, though undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics," Notre Dame president John I. Jenkins said in a statement. "To save the great American institution of college sports, Congress must pass legislation that will preempt the current patchwork of state laws; establish that our athletes are not employees, but students seeking college degrees; and provide protection from further antitrust lawsuits that will allow colleges to make and enforce rules that will protect our student-athletes and help ensure competitive equity among our teams."
(Attorney Steve) Berman told ESPN that a series of formulas devised by a sports economist will be used to decide how to split the $2.7 billion in damages among more than 10,000 former and current athletes. He said some money will be split evenly among all members, but other parts will be allocated based on the athlete's market value. Metrics such as career snap count or a player's star rating in recruiting might determine their payout, he said.

Gathering data to plug into that formula could be a complicated process, and Berman said he's hoping schools will provide "granular data" rather than requiring players to submit claims by themselves.
Berman said the settlement includes a "mechanism" that he believes will make it easier for schools to rein in the marketplace for third-party NIL deals. He declined to provide any further details. Several athletic directors told ESPN this week that they were optimistic but uncertain about whether the settlement would give them enough legal room to regain control.
I like this quote the best:
"The settlement, though undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics," Notre Dame president John I. Jenkins said in a statement. "To save the great American institution of college sports, Congress must pass legislation that will preempt the current patchwork of state laws; establish that our athletes are not employees, but students seeking college degrees; and provide protection from further antitrust lawsuits that will allow colleges to make and enforce rules that will protect our student-athletes and help ensure competitive equity among our teams."

So, we are going to ask a legislative body like Congress to sit down and find a way to diligently work through all these issues to create an effective financial and legislative model to make college sports financially viable. This is the same group of people where 50% hate the other 50% and are directly affected/influenced by the laws that have been put into effect in their own states. They can't even agree on their own federal budget until there's a looming govt shutdown that would furlough tens of thousands of workers. So basically, I can't see Congress intervening until this whole thing is about to collapse. I'm getting less optimistic that 5 yrs from now that half of the teams in college sports will be gone as Universities decide that this is a world they didn't sign up for and have decided they don't want to manage. A sad state of affairs.
 

I would speculate that the odds of Congressional action depend heavily on the outcome of the Fall elections. If one party somehow manages to gain control of the White House, House of Representatives and the Senate, then that makes it more possible for legislation to move through Congress. But - the nature of that legislation would likely be very different if it was drafted by a majority Republican party as opposed to a majority Democrat party. that was one of the takes I heard from some of the lobbying sessions put on by College football big-wigs - the Dems and Repubs have completely oppositive approaches to issues like NIL, athletes as employees, etc.
 

on how we got here: athletes saw schools and conferences hauling in hundreds of millions of dollars in TV rights to show games featuring....the athletes. but the athletes were told, "you're amateurs - you don't get any of that money." likewise, schools made money selling jerseys and other merchandise with the players' names and numbers on them - and the players got nothing.

meanwhile, coaches were making more and more money. and coaches could jump from job to job with no consequences, while if a player wanted to transfer to a different school, they had to sit out a year.

at some point, the players said "we're getting hosed. we play the games. we're the ones the people are coming to see in person or on TV. without us, there is no game and no revenue. we deserve a share."

the NCAA could have been pro-active and worked something out a lot sooner, but they didn't. then the lawsuits started, and the NCAA kept losing in court; all the way up to the Supreme Court. If the NCAA would have started a modest revenue-sharing system 5 years ago, NIL as we know it may never have come into being. instead, the NCAA tried to cling to the amateur model, and it cost them big time.

The crazy thing is, going back many decades the decision makers could have instituted the exact same “salary cap” scheme except directed at athletic department distributions and staff salary pools. There never would have been the obscene salaries or facilities or arms races. The balance of revenues would be directed towards the academic missions of the schools.

Yep, socialism and in violation of the Sherman Act of 1892…but so is this new scheme, just worse. Antitrust issues…

I don’t see how this works.
 

Will this be the death of collectives?
 

Will this be the death of collectives?

If (somehow) the football individual TV NIL monies are redistributed to the female athletes, non-revs by conference/school executive fiat then the collective money will still be pretty significant to high value players. If the football NIL money is delivered to the players that earn it (distributed on a value basis, like in a workplace ) then it would probably be a much smaller factor. If they can’t enforce the rules around collective (they can’t) will it matter if they’re banned. Will fans donate? Probably a lot fewer. The track and filed team might need the money.
 

on the collectives - I've seen people speculating that the "pay for play" form of NIL will be rolled into the revenue-sharing system and administered through the schools, which would essentially eliminate the collectives.

but I've also seen people speculating that the collectives will continue to operate as a supplement to the official revenue-sharing. it all depends on how the details are worked out over the next 6 to 9 months.

either way, I presume that individual athletes will retain the right to pursue their own personal NIL deals for jerseys, posters, endorsements, camps, autograph signings, etc.
 




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