Deep-Dive into the NCAA-House Settlement Submitted For Approval, HCU's Motion Against the Settlement is Dismissed, and Much More | Newsletter #257
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Today’s newsletter looks at all the layers of the House Settlement
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This Monday Newsletter includes:
1. NCAA House Settlement
2. Houston Christian’s Motion Against the House Settlement
4. What’s coming up in the world of NIL
5. Legal Updates: Fontenot Case and Settlement Lawyer Fees
6. News/tips for administrators and student athletes
Major News
NCAA House Settlement Handed to Judge for Review
The NCAA and power conferences on Friday filed their agreement in the settlement of three antitrust lawsuits (House, Hubbard and Carter), which would take effect at the start of the 2025-26 academic year next summer or fall.
Among other things, the settlement will create an athlete revenue sharing system, expand scholarships to full rosters, and create an enforcement system of arbitration overseen by the courts that would have a drastic impact on athletes, schools, and NIL collectives.
If approved, a court-appointed “special master” will settle disputes over compliance and interpretation matters about the revenue-sharing model; and, a third arbiter is charged with hearing and ruling on appeals from athletes or schools found to have violated rules connected to the new model.
The plaintiff attorneys, separately filed documents that detail how they plan to distribute the nearly $2.8 billion in back damages to former players over a 10-year period. 83% of the back pay — $2.3 billion — is expected to go to an estimated 19,000 football and men’s basketball players. The first back payments are due this coming spring after, presumably, the settlement is approved by Judge Claudia Wilken.
CLICK HERE for further details into the historic deal.
Houston Christian University’s Motion Against the House Settlement is Dismissed
U.S. District Judge Claudia Wilken, who is tasked with approving the multi-billion dollar settlement, denied HCU’s motion to intervene and to obtain a declaration that the House settlement is void.
As of right now, HCU and other colleges in the 27 non-power conferences are on the hook to pay about $990 million under the settlement. HCU argues that : 1) they are not a named defendant; 2) were not involved in the settlement talks; 3) did not have their interests represented in settlement talks; 4) have not been shown to deprive their athletes of any NIL, broadcasting or video game revenue opportunities; and 5) they never agreed to the settlement.
Judge Wilken denied the motion because 1) HCU’s membership in the NCAA and participation in D-I is entirely “voluntary”; 2) HCU has been on notice of the House litigation since it began in 2020 and could have taken earlier steps to impact the case. - HCU waited to intervene until last month, after a settlement was reached; 3) granting the motion “would delay the resolution” and “derail the parties’ settlement discussions.”; and 4) Judge Wilken doesn’t believe she has jurisdiction to address whether “the NCAA’s actions violate its own constitution, bylaws and rules” as HCU contends.
HCU attorneys said they will consider their other options in response to the ruling.
CLICK HERE to learn more.
Other Notable Stories to Follow
The Mountain Specific Sports Federation is providing Olympic sports (that will surely be effected by the House Settlement if approved) a home to stay alive - LINK
How the newly submitted House settlement could challenge the future of NIL collectives - LINK
75% of Olympic athletes were once college athletes - LINK
NIL a key factor in some college football stars, such as Emeka Egbuka, staying in school - LINK
What’s Coming Up Next For NIL
PICTURE
August, 2024 | Judge Wilkinson’s Decision on the submitted House Settlement
Legal Updates
Fontenot Case Adds Four New Plaintiffs
Fontenot attorneys filed an amended complaint adding four other names to the case caption: Mya Hollingshed, Sarah Fuller, Deontay Anderson and Tucker Clark. The quartet joins original complainant Alex Fontenot, a former University of Colorado running back.
The antitrust case challenges the NCAA’s Bylaw 12, which prohibits athletes from receiving direct compensation related to their athletic endeavors. Specifically, Fontenot targets the billions of dollars in television revenue generated in recent years.
Although House attorneys believe Fontenot will eventually be incorporated into the House settlement, Fontenot’s lawyers amended their complaint to explain why they believe their case should proceed whether or not the settlement is approved.
CLICK HERE to learn more.
NCAA Settlement Lawyers Seeking a Cut of Athlete’s House Compensation
According to the parties’ stipulation and settlement agreement, the class action counsel —law firms Hagens Berman and Winston & Strawn—can apply for a $20 million “upfront injunctive fee” paid by the defendants, and an annual percentage share of the revenue that schools will distribute to athletes over the next decade.
Under the House settlement terms, the lawyers’ maximum share will start at 0.75% for the first three years of the agreement, jump to 1% in years 4-6, increase to 1.25% in years 7-9, and then jump again to 1.5% in the 10th year - Likely tens of millions of dollars over the life of the deal.
Therefore, the more athletic departments earn—and therefore distribute to athletes—the more the class counsel could earn. And vice versa.
CLICK HERE to learn more.
Optimum Sports Consulting is here to help.
For athletes looking for NIL insight and advisement, administrators and collectives looking for resources and facilitating a best-in class process, or agents looking to navigate the changing landscape, we’re here to help!
Message us now for a free consultation.
FOR ATHLETES
Notes for the Week
Notable breakdown of how the submitted House Settlement will repay former college athletes, including giving athletes (such as Joe Burrow) as much as $1 million in backpay - LINK
Nebraska’s Ty Robinson has an NIL deal which plans to reimburse every Bradford White water heater purchased from July to November if the Cornhuskers win the Big Ten championship. - LINK
LSU freshman softball player, Alix Franklin, spreads positive message with her NIL deal to be brand ambassador for a Dallas-based non profit - LINK
Kansas State QB, Avery Johnson, received a flashy, lavender Corvette through NIL deal - LINK
Tip of the Week: Stay up-to date with House Settlement updates and how they may affect your future NIL deals
The House settlement looks to closely enforce NIL deals by ensuring that they are “at rates and terms commensurate with compensation paid to similarly situated individuals,” which will be approved by a clearinghouse (and a third-party arbiter if necessary) that will vet the contracts. If not approved, you could be fined or even deemed ineligible.
FOR ADMINS
Notes for the Week
NCAA updates roster limits and increases scholarships as part of the submitted House Settlement - LINK
Mack Brown speaks out about the current state of college football saying that “Amateurism is gone. We're the mini-NFL”- LINK
Tip of the Week: Make sure your collectives understand the terms of the submitted House Settlement
Through the NCAA’s proposed rules to govern NIL deals and collectives as part of the House Settlement, a new third-party arbiter could fine schools that are not in compliance.
Thanks for Reading!
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