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Report: Documents reveal details of proposed NCAA settlement, new compensation model

NS_headshot_clearbackgroundby:Nick Schultz05/14/24


Details of a proposed settlement offer and the impact it could have on the NCAA are coming to light, according to a report from Yahoo! Sports’ Ross Dellenger.

If there is no agreement, the NCAA could be on the hook for $20 billion in back damages with the risk of filing for bankruptcy, Dellenger reported Tuesday night. According to the documents, that figure could be payable “immediately” and “not over 10 years,” which brings the bankruptcy filing into play.

The proposed terms also include a new compensation model that would allow schools to share up to $22 million with athletes, as well as a new scholarship and roster structure that were previously reported. That cap is a “fluid and unsettled figure,” though, and will “fluctuate over time as athletic department revenues increase,” Dellenger said, and schools would not be required to share revenue with athletes.

In the first year – Fall 2025 was previously reported as a potential start – the figure would be $21 million.

Another notable part of the proposed settlement – which is in the House, Hubbard and Carter cases – is the expectation the court will reaffirm current NCAA rules about athlete compensations. That would include “the prohibition on booster payments if they are not true NIL,” and it would also open the door for NIL collectives to move in-house within the university. Under current rules, collectives are third-party organizations.

There would also be an “enforcement infrastructure” focusing on pay-for-play rules as part of the proposed settlement.

As a result of back damages prior to the NCAA’s interim NIL policy in 2021, documents also showed the NCAA has to pay about $277 million per year over a 10-year period – with 60% of that number coming from reduced distribution and 40% from the NCAA through reserves and reduced operating expenses. During the 10-year stretch, school distribution would drop by $160 million per year, and Dellenger said power conferences are “anticipating” a roughly $1-2 million distribution reduction per year.

There are some caveats with the proposed settlement, though. Yahoo! Sports reported there is no protection from future lawsuits brought by state attorneys general or offer a ruling on how Title IX applies.

Charlie Baker: ‘There’s still a lot of work to be done’ with settlement talks

NCAA president Charlie Baker recently spoke about the settlement and what lies ahead, pointing out there’s “still a lot of work to be done” with it. Yahoo! Sports previously reported a 40-day deadline to come to terms.

“The most important part of the settlement – and let’s face it, there’s still a lot of work to be done there – but it creates a clarity and visibility on a whole bunch of issues that have been roiling everybody for a while,” Baker said, via ESPN’s David Hale.

“The other thing it does is create predictability and stability for schools, but it also creates a tremendous opportunity for student-athletes, especially at the schools that are most heavily resourced.”