A PYMNTS Company

NCAA Antitrust Settlement Clears First Approval Stage

 |  May 21, 2024

A potential multibillion-dollar settlement of an antitrust lawsuit against the NCAA has advanced past the first step of a three-step approval process. This landmark settlement could reshape the financial landscape of college athletics, with the initial proposal indicating no changes to a payment structure that requires the 27 college conferences not named in the suit to bear the majority of a $1.6 billion portion of the damages, as reported by Market Watch.

On Monday night, the Division I Board of Directors finance committee approved the proposed $2.77 billion settlement of the case known as House v. NCAA. The committee passed the settlement to the full board, recommending adherence to the original financial plan. This plan involves significant financial contributions from various conferences, particularly those outside the five power conferences.

Tuesday saw the Big 12 becoming the first power conference to approve the settlement terms, according to sources from 247Sports. Other major conferences are expected to conduct similar votes in the coming days, signaling a collective move towards resolution.

Jeffrey Kessler, the attorney representing the plaintiffs in the House case, expressed optimism about the progress. “We are optimistic that a transformative moment for college sports may be very close,” Kessler told 247Sports.

Related: NCAA Faces Bankruptcy Threat from Antitrust Lawsuits

The anticipated resolution of House v. NCAA could be finalized as soon as this week. The settlement would require the NCAA to pay approximately $2.7 billion in back damages over the next decade. According to a memo obtained by multiple media outlets, this amount includes $1.6 billion derived from reductions in NCAA distributions over the next ten years. About 40% of this reduction will come from the five power conferences, which include 68 power-conference schools, while nearly 300 Division I programs outside this category will also be affected. Division II and Division III schools are not expected to be impacted at this stage, though this may change.

The remaining $1.1 billion of the settlement will be sourced from NCAA reserves, budget cuts, and other financial adjustments. This comprehensive financial plan aims to balance the burden of the settlement across various levels of college sports institutions, ensuring the NCAA can meet its obligations without crippling any single entity.

Source: Market Watch