By Nicholas P. Smith, PhD
There are more questions than answers that remain after the NCAA and Power Five Conferences (SEC, ACC, Big Ten, Big 12, and Pac-12) agreed to a settlement last month in the class action lawsuit of House v. NCAA case.
One of the biggest developments from the settlement was the requirement that a revenue sharing plan between Division I student athletes and their respective universities be created, which would allow universities to directly pay their student athletes. Revenue sharing between student athletes and member institutions will pave the way for a colossal change in college sports in many areas, but notably with regard to scholarships.
Scholarship limits may be altered or eliminated in the future. An important decision looms. Currently, the scholarship limits for college football remain at 85 student athletes, while basketball is limited to 13 scholarships, baseball to 11.7, and ice hockey to 18. The settlement may cap that at a certain number.
A large portion of the billions of dollars that athletic programs generate will be split and distributed for student athletes. The NCAA national office will pay the damages of $2.8 billion out over the course of the next ten years by scaling down the funds it distributes to Division I schools on an annual basis. According to Kristi Dosh, an attorney and an adjunct professor at the University of Florida, the NCAA is paying $1.1 billion of the $2.8 billion for past damages with the Power Five Conferences covering 1.65 billion and $990 million coming from the other 27 Division I conferences.
Moving forward, the power conferences have agreed tentatively to a forward-looking revenue sharing structure, which would give schools the power to allocate a $20 million payout on disbursements directly to athletes. This number could grow larger as school revenue grow in the future. This ruling will make sure that Division I athletes would not give up their rights to file future antitrust claims against the NCAA.
House v. NCAA was filed in June 2020 by Grant House, a swimmer at Arizona State University, and Sedona Prince, a current TCU women’s basketball player. This case was granted class-action certification by US District Court Judge Claudia Wilken, which expanded the reach to any Division I student athlete that started play in 2016. The former athletes, who played from June 15, 2016 to November 3, 2023, were covered in this settlement. The complaint of House v. NCAA will also sought back pay for Division I student athletes who were barred from earning Name, Image, and Likeness (NIL) money prior to the NCAA changing its policy in 2021. One question remains in that some athletes may have not played between June 2016 and November 2023 and may not be covered in the settlement.
Antitrust violations and potential tax issues exist as well as, since this ruling may also impact unionization and collective bargaining. Also the pending outcome of Johnson v NCAA will have labor and tax repercussions if student athletes are deemed as employees. Dr. Sam Ehrlich, a professor at Boise State University stated that, “this is a big moment, but it’s not like we have reached the finish line. … This is still going to be ongoing litigation for several years.”
References
Auerbach, N., & Williams, J. (2024, May 20). How the House v. NCAA settlement could reshape college sports: What you need to know. The Athletic & The New York Times. Retrieved https://www.nytimes.com/athletic/5506457/2024/05/20/ncaa-settlement-house-lawsuit-college-sports/
Chen, D. W., Fortin, J., & Betts, A. (2024, May 26). Settlement on athlete pay sends shockwaves across the N.C.A.A. The New York Times, A-29.
Dosh, K. (2024, May 24). 10 things to know about the NCAA’s House settlement. Forbes.com. Retrieved https://www.forbes.com/sites/kristidosh/2024/05/24/10-things-to-know-about-the-ncaas-house-settlement/?sh=6ecde2995cb1
Emerson, S. (2024, May 19). Feel-Good walk-on tales may be thing of the past. The Athletic & The New York Times, A-30.
Murphy, D. & Thamel, P. (2024, May 20). Looking ahead to this week’s House v. NCAA settlement votes. ESPN. Retrieved https://www.espn.com/college-sports/story/_/id/40182310/looking-ahead-week-house-v-ncaa-settlement-votes
Nicholas P. Smith, PhD teaches sport law at Florida International University in the Department of Counseling, Recreation, and School Psychology. Dr. Smith’s research interests focused primarily on the legal aspects of the business of sport and sport security. This includes considerations on the impact of sport terrorism on the field of sport management. His efforts in research also include volunteer motivations and risk perceptions in sport mega events.
