NCAA, college officials close to finalizing settlement with plaintiffs in landmark antitrust cases

Plaintiffs’ attorneys plan to file a long-term version of the agreement in court next week as part of the NCAA’s landmark settlement in the House antitrust cases of Hubbard and Carter, they told Yahoo Sports.

However, college sports leaders from the four major conferences and the NCAA are working on final revisions to the long version of the document, which could delay the document’s expected filing date next week and result in a court extension.

“We’re waiting for their final comments. We hope to file a motion by the end of next week,” Jeffrey Kessler, one of the lead plaintiffs’ attorneys in the case, told Yahoo Sports on Tuesday.

Plaintiffs’ attorneys sent a lengthy document to college leaders earlier this summer, which attorneys describe as the normal process for any settlement. Plaintiffs’ attorneys are expected to review any changes made by the conference and NCAA officials before filing with the court.

The changes are not expected to be significant. Kessler described the long-term agreement as a formalization of the term sheet the parties agreed to in May, and there are little to no upcoming issues, he said.

But there are a number of looming issues regarding the future revenue-sharing model for college sports, including roster sizes by sport, a new external enforcement body and the exact amount of the revenue cap. Those elements are not necessary to finalize a long-term deal, Kessler said, and are “internal issues” that conference leaders must figure out on their own.

For example, while the agreement prohibits athletic scholarship limits, it allows roster limits but does not specify limits. The same is true for the enforcement arm and the amount of the revenue limit: The agreement deals with the broader concept, not the details.

The NCAA and college sports are working to settle several antitrust lawsuits brought against them by the state. (Grant Thomas/Yahoo Sports)The NCAA and college sports are working to settle several antitrust lawsuits brought against them by the state. (Grant Thomas/Yahoo Sports)

The NCAA and college sports are working to settle several antitrust lawsuits brought against them by the state. (Grant Thomas/Yahoo Sports)

While university leaders spend the coming weeks and months sorting out those issues, a lengthy settlement agreement will soon be filed in U.S. District Court for the Northern District of California, where Judge Claudia Wilken will accept or reject the terms. Acceptance is expected but not guaranteed. Wilken could identify issues and may want to adjust the settlement language, attorneys say.

If Wilken approves, athletes who are part of the class will receive notice of the terms with the opportunity to object to any terms. There is a 90-day period for objections. Then, the court will schedule an approval hearing or a hearing on such objections.

The timeline for fully finalizing the settlement is likely to be “early next year,” said Kessler, who suggested January. However, implementation of the new revenue-sharing model would not begin until the start of the 2025-26 academic year. Revenue-sharing checks would likely be paid in late summer or early fall, he said.

Beyond the long-term deal, the issues college leaders are debating are important to college sports’ future revenue-sharing model: roster limits, enforcement and a revenue cap. Six weeks after the deal was reached, where do those issues stand?

Under the agreement, maximum scholarships end and roster limits begin. However, roster limits must be set higher than the current maximum scholarship in each sport. Schools will be able to offer a scholarship to any roster member up to the newly created roster limit.

For example, the maximum football scholarship amount is currently 85. The squad limit must be 85 or more.

The roster limit has been the most hotly debated issue among coaches and administrators and remains the subject of ongoing negotiations within the group. Each power conference has made a recommendation for a roster limit. Recommendations have ranged from 95 to 115, according to people familiar with the discussions.

A final decision is expected to be made soon, but Kessler stressed that it is not necessary to provide a team member count in order to secure a long-term deal, though some university leaders hope to include that information.

For basketball, there are no significant changes expected in player limits from the current maximum scholarship limits of 15 players for women’s basketball and 13 players for men’s basketball.

The discussion about baseball roster limits is more drastic. Baseball’s maximum stipend is 11.7. Discussions about the size of a baseball roster range from 30 to 35, various sources tell Yahoo Sports.

Each additional spot on the roster allows a school to offer an additional scholarship. In a competitive enrollment environment, some schools plan to add more than $5 million a year in additional scholarships. For every scholarship for men, a scholarship for women must be added to meet Title IX requirements.

While how the rules will be enforced has not yet been determined, the settlement provides that any disciplinary action for violations of the new revenue-sharing system will be decided by a neutral and independent arbitrator, not the NCAA, Kessler said.

The settlement does not name an arbitrator, which both sides must agree on later. The arbitrator could be a group of lawyers or a law firm that hears the arguments of a school accused of violating the revenue-sharing model.

Gone are the days of NCAA rules enforcement committees ruling on potential violations.

“There will no longer be enforcement boards made up of school officials imposing penalties,” Kessler said.

However, the settlement does not require the NCAA to disband its enforcement team, Kessler said. NCAA enforcement could continue to exist to enforce other association policies unrelated to the revenue-sharing model, such as academic violations and so on.

College leaders say the injunction in the settlement allows them to continue a nearly century-long fight to prevent athletes from being paid for performance through sponsors. According to the term sheet, the settlement prohibits recruits or current athletes from entering into any agreement with a sponsor unless it can be clearly shown that the agreement is a bona fide contract for the use of an athlete’s likeness. If the sponsor is a business owner, the sponsor and athletes must show that the agreement is related to a “valid business purpose” with compensation similar to contracts with other individuals, the documents say.

The transactions must be “real, NIL” and what is defined as “fair market value” must be paid, and officials hope to establish that from the disclosed data.

This embedded content is not available in your region.

As for the revenue-sharing cap, the formula for determining the cap — 22% of the average revenue of energy schools — is part of the settlement. But the exact amount will remain uncertain until revenue from the 2024-25 academic year is factored into the average, Kessler said.

The attorneys and commissioners agreed to use an average of energy conference revenues, which includes television distribution, ticket sales and sponsorships (not donations), as a model. Twenty-two percent of that average will be the revenue-sharing limit. Administrators are preparing for the exact amount to be in the lower $20 million range of Year 1 of revenue sharing next fall. But it will increase because it will include escalators.

While the 22% will remain the same throughout the 10-year contract, the monetary amount will change. In years 2 and 3 of the contract, the monetary amount will automatically increase by 4% each year.

In Year 4, a reassessment of revenue will generate a new cap. Revenues are expected to increase with additional cash flow to departments through new television and sponsorship deals. There are exceptions that could be counted toward the cap, including as much as $2.5 million in Alston-related money already going to athletes and $2.5 million in additional scholarships.

Over the course of the 10-year agreement, plaintiffs’ attorneys expect college athletes at major conference schools to receive nearly $20 billion in revenue from their schools. That’s about $28 million per year per Power Conference school over the course of a decade.