Culture Court
The pop culture podcast for people who like details. This pod sits at the intersection of sports, culture, and law. Hosted by CJ, a pop culture junkie who happens to be an attorney. Tell us what you want to talk about by leaving a voicemail at CultureCourtPodcast.com. Find CJ at TikTok.com/@attorneycj and at Twitter.com/attorneycj
Culture Court
Exploring the $20 Billion Shake-Up in College Sports: Who Really Wins? - 006
Could the NCAA be on the brink of a financial and cultural revolution in college sports? Brace yourself as we unravel the hefty $20 billion in potential antitrust case settlements that might just redefine what it means to be a student-athlete. In this episode, we dig into the leaked document that's set the collegiate sports scene abuzz, with revelations of a compensation model that could see schools dishing out millions to their players annually. Join me for an in-depth analysis, where we'll tackle the NCAA's strategic maneuvers aimed at securing labor law exemptions from Congress, debate the financial encumbrances awaiting educational institutions, and ponder if the NCAA, the schools, or the athletes themselves should consent to these staggering terms.
As the college sports landscape teeters on the edge of monumental transformation, I bring to light concerns over whether the proposed settlement is merely a delay tactic in resolving deep-seated issues.
Engage with me across social media channels, share your perspectives, and spread the word about this ground-breaking discussion that could change the game forever.
Episode 6.
Culture Court is a podcast about the trends in sports, culture, and law.
Every episode will be interesting, relevant to what's going on what right now, and 20 minutes or less.
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Disclaimer (you knew this was coming): This is for entertainment and discussion purposes only and should not be considered legal advice. Views expressed herein shall not be attributed to my employer or my clients.
Ladies and gentlemen of the jury, my name is CJ and this is Culture Court. Let's talk about the biggest story in college sports right now and no, I'm not talking about the fact that EA Sports is dropping the college football game on July 19th, although that is huge news. That is huge news and I'm really excited for it. Let's talk about how the NCAA could face $20 billion in damages if they cannot get a settlement on three antitrust cases that they are fighting against right now. This is reporting per Ross Dellinger with Yahoo Sports. He was given a document that leaked, that was prepared for the ACC spring meetings in Florida. This document talks in depth about the terms of a potential settlement.
Speaker 1:In the House case, the Hubbard case and the Carter cases, student athletes are seeking back pay. Basically, the students have alleged that the NCAA's rules prohibited the student athletes from making money that they would have made in a free market. So the student athletes want the NCAA to pay up. Hey, I could have gotten NIL money on a free market. I didn't get it because of your rules. Now it's your time to pay up. So there are five major elements of this alleged settlement. So the first is that the NCAA and the schools will pay the students back pay. The second is that there will be a new compensation model and that compensation model will let schools share up to twenty two million dollars with their students. The third is that the NCAA will overhaul its scholarship limits and its roster construction limits. The fourth is that the students will agree to not sue the NCAA for a period of 10 years. The fifth is that the court will reaffirm certain portions of the NCAA's compensation restrictions, including the prohibition on booster payments if they are not for true NIL purposes. So five elements mainly hey, the NCAA is going to pay $2.776 billion over a 10-year period. So that's what they're going to pay in the settlement right. And they're going to pay that because if not they're going to have to pay $20 billion for the actual if they lose that trial. They're going to have to pay 20 billion for the actual if they lose that trial. There's going to be a compensation model where the schools can give students up to 22 million dollars annually. The NCAA is going to overhaul its scholarship and roster structure rules. The students agreed not to sue the NCAA anymore for 10 years and then, finally, the court will agree to say, hey, the NCAA's compensation rules are legitimate.
Speaker 1:So the first question I have when I saw this article was whether or not this document that leaked was actually legit. And the thing that caused me to have pause is that the document says the NCAA will be on the hook for $20 billion in damages and that number it by itself just seems so large. It seems almost too large to be real. I think part of why this document leaked and part of why that $20 billion number is in there is because the NCAA is trying to, frankly, scare Congress, scare state officials, into really pushing for a national exemption to labor law for the NCAA. The NCAA is saying, hey, if we have to pay 20 billion dollars to the students, the NCAA might cease to exist. Right, and the thing that you should remember is that the NCAA is full, is full of people who really believe in the mission of college sports, they really believe in higher education and the NCAA, for all its faults, does provide great benefits to so many students and so many families, so many students and so many families. And so the NCAA is saying, hey, if we have to pay $20 billion in damages, we might actually go out of business. That's crazy, and so the first question I had was. Is this legit? I think maybe it's legit, but part of why the document leaked now is to really push on Congress right before people get really invested in their you know fall election season campaigning to. Hey, let's see if we can get something done on the labor exemption side.
Speaker 1:Second question Okay, if this is not just a scare tactic, how will the NCAA afford to pay these damages? Well, 60% will come from a reduction in distributions to the schools and then 40% will come from the NCAA's revenue. So that's how they're getting that number. The third question, the obvious question, right, should the NCAA do this? Should the players do this? Now, this will cost power conference schools about 30 million dollars a year. Right, we mentioned already there's up to 22 million dollars in revenue sharing, but then you got to pay the back pay damages and that's going to be five or six million dollars a year per school.
Speaker 1:So my answer on this, my early answer on this, is absolutely not. The players should not go for this, the ncaa should not go for this, the school should not go for this. So the article suggests that the ncaa will actually lift all those rules regarding scholarship limits and roster limits and never to avoid future litigation. And, of course, we've discussed already that there will be some kind of settlement, of some kind of release in the settlement. So that makes sense and that will help the NCAA not have to fight against all those cases.
Speaker 1:However, the NCAA has many rules that are not directly related to compensation and those rules might be violations of antitrust law. Right, right now we're focused on basketball and football, but there are lots of rules that apply to those single, individual sports like golf, like tennis, that really hamper their ability to make money outside the NCAA. The NCAA manual is 449 pages, so there are definitely other rules in there, besides just the compensation rules, that could be violations of antitrust law. I'm thinking on top of my head of the academic eligibility requirements, the transfer rules, the max number of games played in the season, the kind of tournaments you can play in, so. So that's all right for the picking for some plaintiff's lawyer to go get and sue the NCAA. And if the NCAA decides to lift all of those rules right, the roster limits, you know, the compensation limits, all of them, they just lift all of them that is going to change the culture of college sports in a very serious way and nobody's talking about this, but how does this all square with Title IX? That's a big open question.
Speaker 1:The other reason I think this is probably not a good idea for the NCAA is that this settlement would not stop state attorneys general or the US Department of Justice from suing the NCAA for any of these rules. Right, we already know that there is a lawsuit right now from the DOJ against the NCAA for antitrust violations. This settlement won't settle that lawsuit. The other reason I think that the NCAA should not go forward with this settlement is that we've heard from the NCAA. We've heard from the conferences, heard from the athletic directors, university board members, presidents, chancellors. Know who we haven't heard from in this whole process? The student athletes, the players. The NCAA board of directors is 25 members. At the Division I level, only two are student athletes.
Speaker 1:If you're serious about making this a better system for the students and giving them a bigger voice and you don't want to collectively bargain, then I think you could add more than just two students to the NCAA Division I Board of Directors. So I'm saying don't take the settlement. What should they do? Well, the obvious answer is collectively bargain with the students until the NCAA and the students come to the bargaining table, these issues will come up over and over and over Right, and this issue did not come out of thin air. So if the settlement says for 10 years the students agreed not to sue the NCAA, how can we be so sure that in 10 years they're going to figure this out?
Speaker 1:I think what they're trying to do is kick the can down the road, and that is probably probably the wrong thing to do. Stay tuned on this, because they could be agreeing to this settlement as soon as next week. As I said, I hope not, but that could really reshape college sports. Thank you for listening. Please like, subscribe and share this clip with your friends, and also share it with your enemies If you have anything that you want me to discuss, if you have any questions, you can easily find me on Twitter or IG. Thank you and have a great day.
