NCAA Faces Bankruptcy Threat from Antitrust Lawsuits

Recent developments have put the NCAA and its power conferences in a precarious position, with the looming threat of bankruptcy hanging over them. According to documents obtained by Yahoo Sports, the NCAA and its affiliated conferences could be on the hook for a staggering $20 billion in damages if they reject proposed settlements in three major antitrust cases: House, Hubbard, and Cart.

The proposed settlement, presented to ACC leaders during their annual spring meetings, outlines a payment of $2.776 billion in backpay to student-athletes for the use of their name, image, and likeness prior to 2021. This sum would be paid out over a decade if the NCAA agrees to the terms. However, should the NCAA choose to contest the lawsuits and subsequently lose in court – an outcome many legal experts anticipate – the organization could be forced to pay the full $20 billion in damages immediately, as reported by Yahoo Sports.

Related: Proposed NCAA Antitrust Settlement in the Works, Says Attorney

This financial burden, without the proposed 10-year payment plan, would likely push the NCAA and its conferences into bankruptcy. Under the terms of the proposed settlement, the NCAA and its conferences would commit to paying $277 million annually over the course of a decade. The majority of these funds, approximately 60%, would come from a reduction in distributions to member schools, while the remaining 40% would be drawn from reserves, other net incomes, and operational expenses.

Source: Sports Yahoo