future of revenue-sharing in doubt - House anti-trust case could still go to trial

[short ornery norwegian]

In case you missed it - the Judge overseeing the proposed settlement in the House anti-trust case has objected to some provisions of the agreement. If the agreement cannot be re-worked to meet the Judge's objections, the case could wind up going to trial, which would put the proposed revenue-sharing system on indefinite hold.

from ESPN:

A federal judge ordered the attorneys negotiating a major settlement that could reshape the business model of college sports to "go back to the drawing board" to resolve concerns she has about how the deal would limit the ways in which boosters can provide money to athletes.

Judge Claudia Wilken declined to grant preliminary approval to the House v. NCAA antitrust settlement Thursday. She said she was concerned with multiple parts of the terms of the deal. Chief among her worries was a clause that would require any money that boosters provide to athletes to be for a "valid business purpose."

"What are we going to do with this?" Wilken asked. "I found that taking things away from people is usually not too popular."

Wilken gave attorneys representing the NCAA and the plaintiff class of Division I athletes three weeks to confer and decide whether they could revise the language or need to scuttle the pending deal. NCAA lead attorney Rakesh Kilaru told the judge that the revised rules for how collectives operate are "a central part of the deal."

If the sides can't reach an agreement, all three cases that are part of the proposed settlement would proceed toward trial. The House v. NCAA case was scheduled to go to trial in January 2025 prior to the parties announcing a settlement.
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in English - the NCAA wants to impose new restrictions on "pay for play" NIL and require NIL deals to return to the original intent where players are compensated for the use of their Name, Image or Likeness. the Judge is objecting because she sees this as a restraint on players' ability to earn money.

some legal observers are speculating that the NCAA might be willing to say "bleep it" and hope to win the case at trial. either way, there would likely be appeals and the matter could wind up before the US Supreme Court. but if the case goes to trial, the proposed revenue-sharing payments would be postponed indefinitely - possibly for several years if the case winds through the appellate process.

 

[Pompous Elitist]

Changing out one antitrust-violating business model for another antitrust-violating business model doesn’t make much sense.

 

[Pompous Elitist]

Adding to the ridiculousness is the South Dakota AG filing suit versus the NCAA for the House Settlement that doesn’t even exist yet. Per story they object to FCS and others having to pay penalties owed mainly to football and basketball players. Yep.

The suit also alleges Title IX violations for “only” ten percent of House settlement revenue going to female athletes. IMO should be closer to zero, or zero. Even national champion female BB teams are deep in the red losing $million+ per year….

Oh boy.

South Dakota Attorney General Sues NCAA Over House Settlement

In a lawsuit filed Tuesday, AG Marty Jackley accused the NCAA of breaching its constitution and fiduciary duty to South Dakota's D-I schools.

www.sportico.com

 

[WoodburyTim]

A good question to be asked. How can all this money be shared with players, schools teams that never made any money? SD is asking that.

It is sad that it has come to this because I loved the model that gave chances at education to kids in sports at schools that weren’t generating money, but there is a lot of kids that get grants, scholarships etc that never make any money for the school.

 

[MNVCGUY]

Anyone remember when college sports used to be about the stuff that happened during the games?........ahhh the good ole days.

 

[WoodburyTim]

The truth is that the Dennis Dodd’s and Stewart Mandell’s of the world don’t want people to know is that most athletic departments still require state money and student fees to make ends meet. It isn’t quite the bonanza of money that they want people to think it is.

Some people and states are starting to push back and say why pay players and give them scholarships if there is no profit in it for the school or the state? It used to be about giving many kids access to education that wouldn’t normally have it. But a pseudo-professional model makes that moot.

 

[forever a gopher]

The truth is that the Dennis Dodd’s and Stewart Mandell’s of the world don’t want people to know is that most athletic departments still require state money and student fees to make ends meet. It isn’t quite the bonanza of money that they want people to think it is.

Some people and states are starting to push back and say why pay players and give them scholarships if there is no profit in it for the school or the state? It used to be about giving many kids access to education that wouldn’t normally have it. But a pseudo-professional model makes that moot.

It's largely a G4 issue (and some of those athletic departments don't even break even). So you likely have 68 schools that make money or break even (those with G4 football) and 66 that likely don't. Then you add in FCS with 129 teams, I'm sure all of which lose money.

How many run a surplus? This guy says only 18 do. Some of this likely can be attributed to creative accounting, as there is some incentive for showing you run a deficit, but the point remains.

https://www.linkedin.com/pulse/i-found-18-profitable-211-money-losing-ncaa-public-scott-hirko-ph-d-/

As many have said, they don't have a revenue problem, they have a spending problem. If revenue sharing goes through, sports will most certainly be cut, and coach's salaries and buyout guarantees may actually go down as well. You don't have to go far to see that things are out-of-whack. How Mel Tucker, with all of 1 year of head coaching experience can get $95MM guaranteed from MSU would signal there's a problem.

 

[WoodburyTim]

It's largely a G4 issue (and some of those athletic departments don't even break even). So you likely have 68 schools that make money or break even (those with G4 football) and 66 that likely don't. Then you add in FCS with 129 teams, I'm sure all of which lose money.

How many run a surplus? This guy says only 18 do. Some of this likely can be attributed to creative accounting, as there is some incentive for showing you run a deficit, but the point remains.

https://www.linkedin.com/pulse/i-found-18-profitable-211-money-losing-ncaa-public-scott-hirko-ph-d-/

As many have said, they don't have a revenue problem, they have a spending problem. If revenue sharing goes through, sports will most certainly be cut, and coach's salaries and buyout guarantees may actually go down as well. You don't have to go far to see that things are out-of-whack. How Mel Tucker, with all of 1 year of head coaching experience can get $95MM guaranteed from MSU would signal there's a problem.

I think it is hazy how many schools are making money but it is far less than the bonanza we hear about. The CBSSports article last week said less than 10 FBS football program turned a profit. How that is determined I don’t know?

But it does seem clear that many Athletic Departments are going to have raise student fees or ask for more state funding to pay the players the proposed 22 million a year. Many states and schools will just say no thanks. Or their taxpayers will. I love college sports but I know my state needs a lot of stuff more than a football team that goes 7-6.

 

[EasyThere Pilgrim]

These people are totally against free capitalism...EXCEPT in college FB & BB.

It's like playing the Monopoly board game with friends...and pulling $100 in real money out of my pocket and bribing them so I 'win'. Wow, what a lot fun that is.

Anyone who still enjoys college FB & BB ought to have their head examined. EXCEPT if it's to barbecue, have some beer, be with friends, and enjoy mini-rivalries.

 

[Pompous Elitist]

Dellenger mentioned on the Football Enquirer podcast (which is incredibly entertaining with Wetzel and Forde doing their Jonny Carson/Ed McMahon schtick) that when Judge Wilken tore the settlement up the plaintiff attorney stood up in the middle of the hearing and blurted out they would agree to end the (defendant’s) NCAA requirement for NIL regulation in the settlement which is LOL funny. They can absolutely TASTE that billion dollar attorney fee and just want…to…get..across…the…finish line .

If this thing falls apart, and it sounds like it could, maybe some other attorneys can help the players organize, get a real agreement in place that benefits them. Poor, poor Kessler.

 

[short ornery norwegian]

Bump - update in 'House' Anti-trust case. Judge who rejected the first proposed settlement has given the go-ahead to a revised settlement. main differences involve potential NIL enforcement.

from The Athletic:

The proposed House v. NCAA settlement, which includes the landmark $2.78 billion settlement of three separate antitrust cases facing the NCAA and power conferences, received preliminary approval on Monday from Judge Claudia Wilken in the Northern District of California, clearing the way for schools to begin paying players directly through revenue sharing as early as 2025.

Lawyers representing both sides of the settlement — which aims to resolve the House, Hubbard and Carter antitrust lawsuits — filed a revised version of the settlement agreement late last month that aimed to clarify use of the term “booster,” the original language on third-party NIL collectives and what specifically constitutes the pay-for-play inducements the NCAA is aiming to eliminate as part of the settlement.

The settlement is not yet finalized, though the motion Wilken signed states that the court “will likely be able to approve the Settlement as fair, reasonable, and adequate” while subject to a final approval hearing, which is tentatively scheduled for April 7, 2025.............

Another critical aspect of the settlement from the NCAA’s perspective is renewed enforcement of NIL rules intended to eliminate pay-for-play payments that have become commonplace among booster-led NIL collectives. The proposed terms allow the NCAA and power conferences to form a “designated enforcement agency,” which the revised agreement specifies would focus on NIL deals stemming from individuals affiliated with an NIL collective, involved in a player’s recruitment, or from families that have contributed more than $50,000 to a university’s athletic department over the course of their lifetime.

If final approval is granted in April, the settlement would immediately go into effect, with the direct revenue sharing between schools and college athletes starting in July 2025.