The House case

[noeynox]

 

[BlueHen]

So football drives the bus, but basketball pays for the gas.

 

[Drew]

So football drives the bus, but basketball pays for the gas.

You can thank the Rose Bowl/Bowl Coalition for that by never allowing the NCAA to control the football post season and therefore robbing it of any associated revenues from it

 

[nelsonmuntz]

Just look at @huskymedic post above yours. The other 27 conferences who make up the NCAA, are agreeing to the settlement via their board of directors/governors. They gonna sue themselves or are they gonna replace these folks doing the talking for them? There has to be a reason they're agreeing to this that we don't have information because o the surface it makes no sense.

There must be more to it than we are seeing. The Big East is paying a significantly disproportionate share, but they aren't going apespit. Same with the ACC relative to the SEC. Either the math is wrong or the Big East and ACC have reasons for going along with this that we are unaware of.

 

[Fishy]

Or they have no leverage.

Because they have no leverage.

 

[huskymedic]

 

[noeynox]

Or they have no leverage.

Because they have no leverage.

I do wonder if its as simple as the P5 saying, "if you want to continue in association with us, these are the terms or we go off on our own and pay the whole thing ourselves." Otherwise why agree to let those taking in 85 percent of the revenues pay only 40 percent of the settlement? That makes no sense.

 

[huskymedic]

 

[UConnJim]

There must be more to it than we are seeing. The Big East is paying a significantly disproportionate share, but they aren't going apespit. Same with the ACC relative to the SEC. Either the math is wrong or the Big East and ACC have reasons for going along with this that we are unaware of.

It's pretty simple. The NCAA basically has one source of revenues, the men's basketball tournament. So, the NCAA is settling the lawsuit against them with their only source of revenues. And, they are just using basketball credits to determine the penalty by conference. It might not be equitable, but it's the quickest way for the NCAA to settle the lawsuit.

The big financial hits to colleges are going to come from media revenue share and the elimination of scholarship limits to be replaced by roster limits. These two issues could impact schools up to $30 million per year, but it will be mostly voluntary.

 

[Fishy]

I do wonder if its as simple as the P5 saying, "if you want to continue in association with us, these are the terms or we go off on our own and pay the whole thing ourselves." Otherwise why agree to let those taking in 85 percent of the revenues pay only 40 percent of the settlement? That makes no sense.

That's certainly implied with every negotiation that the power conferences have with the lesser conferences, but the possibility of losing the case is likely the reason why they put up no fight, outsider of Val's letter.

Losing the case is likely the prime motivation. An award in an antitrust case is tripled and the estimates are that it could be a $20B figure at the outside. Unlike a settlement, it would have to be paid immediately. It would be the end of the NCAA, all distributions, the end of hundreds of athletic departments, all the championships, save the NCAA tournament which would distribute proceeds directly to the judgment holders, etc.

Basically, the end of the game.

 

[noeynox]

That's certainly implied with every negotiation that the power conferences have with the lesser conferences, but the possibility of losing the case is likely the reason why they put up no fight, outsider of Val's letter.

Losing the case is likely the prime motivation. An award in an antitrust case is tripled and the estimates are that it could be a $20B figure at the outside. Unlike a settlement, it would have to be paid immediately. It would be the end of the NCAA, all distributions, the end of hundreds of athletic departments, all the championships, save the NCAA tournament which would distribute proceeds directly to the judgment holders, etc.

Basically, the end of the game.

Yes, but the P5, with or without the lesser schools isn't letting this go to trial. So in a sense, they have thiae lesser schools over a barrel on this. Either they subsidize this for the P5 or the P5 pick up the whole tab and disassociate themselves from the rest, with the caveat that those that want to join could opt in by paying into the settlement. That would increase the cost for schools that want to remain part of the new super division.

Now that will be tricky and i suspect in such a scenario you will see the new super division having less sports overall while still complying with title 9 regulations.

As much as the overall unfairness sucks, that is what happens when one side has all the leverage and i don't think its the lesser schools as we are witnessing.

 

[huskymedic]

… and lawyers. Lots and lots of lawyers.

 

[nelsonmuntz]

That's certainly implied with every negotiation that the power conferences have with the lesser conferences, but the possibility of losing the case is likely the reason why they put up no fight, outsider of Val's letter.

Losing the case is likely the prime motivation. An award in an antitrust case is tripled and the estimates are that it could be a $20B figure at the outside. Unlike a settlement, it would have to be paid immediately. It would be the end of the NCAA, all distributions, the end of hundreds of athletic departments, all the championships, save the NCAA tournament which would distribute proceeds directly to the judgment holders, etc.

Basically, the end of the game.

Why not make everyone but the P2 pick up the entire tab?

 

[Rufus]

With $2.8B settlement looming, NCAA's smaller conferences feeling squeezed: 'What other options are there?'

College sports is on the brink of a deal that'd require a massive amount in damages. But schools outside the power conferences aren't too happy about the split considering who'd be paying the majority of it.

sports.yahoo.com

 

[Kolumbo]

It seems to me the 22 or so conferences do have leverage. They should offer a much smaller settlement amount for their conferences, or not accept it at all. The risk to the NCAA is what, the big football conferences split off? Wouldn't that officially kill the NCAA tournament as we know it along with a lot of revenue? Let them do it. The 22 conferences should call the bluff.

"“Who is suing, for what are they suing, and where will the damages be paid? Those are the questions we ask,” Lach said. “For the most part, it’s Power Five athletes. But we’ve been told because it’s a Division I rule, we need to share in the damages. I understand that, but sharing should be an equal hit across the board.”

"According to figures from the NCAA and the 22 non-FBS leagues, based on the approved funding formula, those outside the power conferences will sustain a hit of between 1% and 1.68% of their budgets. Those in power conferences will endure an average reduction of 0.61% of their current budget — budgets that will soon see a significant increase from College Football Playoff and television contracts.

"“I’m definitely not opting in,” said one non-FBS conference commissioner."

 

[nelsonmuntz]

It seems to me the 22 or so conferences do have leverage. They should offer a much smaller settlement amount for their conferences, or not accept it at all. The risk to the NCAA is what, the big football conferences split off? Wouldn't that officially kill the NCAA tournament as we know it along with a lot of revenue? Let them do it. The 22 conferences should call the bluff.

"“Who is suing, for what are they suing, and where will the damages be paid? Those are the questions we ask,” Lach said. “For the most part, it’s Power Five athletes. But we’ve been told because it’s a Division I rule, we need to share in the damages. I understand that, but sharing should be an equal hit across the board.”

"According to figures from the NCAA and the 22 non-FBS leagues, based on the approved funding formula, those outside the power conferences will sustain a hit of between 1% and 1.68% of their budgets. Those in power conferences will endure an average reduction of 0.61% of their current budget — budgets that will soon see a significant increase from College Football Playoff and television contracts.

"“I’m definitely not opting in,” said one non-FBS conference commissioner."

If the House case went to trial, and the P4 got roundhoused the way they almost certainly would, at least half the P4 AD's would be fired for not working out a settlement this week when they had the chance. The 22 have a ton of leverage. A judgment would not kill them, and the current deal is pretty bad for them. A judgment against the P4 could bankrupt several of the athletic departments. They can not go to court.

 

[AllHusky]

If the House case went to trial, and the P4 got roundhoused the way they almost certainly would, at least half the P4 AD's would be fired for not working out a settlement this week when they had the chance. The 22 have a ton of leverage. A judgment would not kill them, and the current deal is pretty bad for them. A judgment against the P4 could bankrupt several of the athletic departments. They can not go to court.

Hate to say it, but it seems “Lawfare” is the best option for most of “us”

 

[noeynox]

If the House case went to trial, and the P4 got roundhoused the way they almost certainly would, at least half the P4 AD's would be fired for not working out a settlement this week when they had the chance. The 22 have a ton of leverage. A judgment would not kill them, and the current deal is pretty bad for them. A judgment against the P4 could bankrupt several of the athletic departments. They can not go to court.

The settlement has been reached. The lawyer representing the players even said he doesn't care how the schools decide to breakdown the payment structure. I think the P5 will pay it all minus what is coming out of NCAA reserves since the NCAA is a named defendant, and then MAYBE provide an opt in option to those that want to go with them by having them contribute to the settlement. That amount per team would cost the p-5, what somewhere between 3 and 4 million year? For 10 years, that would be tough for non p5 schools to swing i would think.

I don't see the other 27 conferences really having any leverage. The P5 will pay the settlement themselves before they let it go to trial.

 

[huskymedic]

Assisted access <<

-> How will that play out in the Pac-12, where 10 universities are leaving for other conferences on Aug. 2? Legal liabilities were included in the mediated settlement between Washington State and Oregon State and the 10 departing schools.

Although that section of the 31-page document was heavily redacted, Eric MacMichael, an attorney for WSU and OSU, told the Hotline this spring that “the House case was front and center in our thinking.
“We had to address that. It’s an existential case for the NCAA and all the (named) conferences.”

In other words, WSU and OSU were wary of holding the bill for the 10 departing schools. And the 10 departing schools didn’t want to have to pay double damages, with the NCAA withholding their distributions as members of the Pac-12 and their new conferences.

Details are murky. But according to an industry source, NCAA officials, conference commissioners and key attorneys have discussed how to handle the damages for schools that are changing leagues this summer. <-

 

[Ha Who]

With college sports at critical juncture, private equity groups pushing for their piece

College administrators are bracing for the new reality of sharing revenue directly with athletes as part of the terms of the House settlement agreement.

sports.yahoo.com

 

[Chuck]

With college sports at critical juncture, private equity groups pushing for their piece

College administrators are bracing for the new reality of sharing revenue directly with athletes as part of the terms of the House settlement agreement.

sports.yahoo.com

This is going end so badly for so many schools. Money has become more expensive, but this article is just about private loans, not equity. I'm not going to say that private capital/equity is a "bad guy" industry, but it certainly brings different interests to the table. For everyone that mocks for-profit colleges, big time college athletics is blurring that line. Maybe Grand Canyon will join the BigTen some day with other like minded institutions (yes, that's hyperbole/sarcasm).

Time for non-P4 schools to meet their fiduciary duties. Sorry, P4, we're not signing on to this settlement unless you make it worth our while. If you want to pay it all yourself and then ditch us... go for it. You're either going to do that, or not, regardless of this settlement.

 

[DFW HOYA]

What if a conference opts out? What is the downside risk?

 

[pepband99]

Why not make everyone but the P2 pick up the entire tab?

See earlier "strongly worded letter" comment. How, exactly, would you "make" them? The only route also potentially opens you up to a tripled immediate payment. There is no leverage to squeeze the P2.

 

[zls44]

What if a conference opts out? What is the downside risk?

They can’t. If the NCAA approves the settlement, the NCAA is removing the funds from the league distributions as announced. That is how the NCAA is paying their portion. It’s a wage garnishment, not the Big East sending a check.

 

[nelsonmuntz]

See earlier "strongly worded letter" comment. How, exactly, would you "make" them? The only route also potentially opens you up to a tripled immediate payment. There is no leverage to squeeze the P2.

That is not what I said. I said that if the P2 has so much leverage, why don't they just make the other schools pay all of it?