In a world where few things remain private, maybe it’s no surprise the public is watching settlement talks for House v. NCAA and Carter v. NCAA play out in real time.
Whether that makes a deal to radically transform college sports more or less likely is a jump ball.
In recent weeks, NCAA president Charlie Baker has openly discussed ending a litigation that represents more than 14,500 college athletes and would enable conferences and colleges to share revenue with players. So too has players’ attorney Steve Berman, who has offered detailed remarks, including about ways the NCAA could lower the risk of subsequent antitrust lawsuits.
News organizations have published comprehensive accounts of proposed settlement terms leaked to journalists.
Here’s a sketch of what we know. The settlement envisions payments to players for past harms, including compensating them for unshared broadcasting revenue, lost NIL money and denied chances to be in video games. It also eyes a direct pay model where athletes would be paid by colleges, and that would involve revenue sharing and annual caps.
The settlement would cost the NCAA and its members billions of dollars to be paid out over about a decade. According to the leaks, the cost of not settling House—set to go to trial next January—would be even higher. A loss could allegedly cost the NCAA and members $20 billion, even though damages for House project to be about $4 billion and the math for it morphing into $20 billion remains mysterious. The NCAA, a nonprofit, might also file for bankruptcy. To top it off: The NCAA and conferences must vote on settlement terms by May 23.
That’s a lot to unpack and urgently so. There are myriad questions, ranging from who pays what, when and to whom, to how a settlement would relate to the bevy of other legal controversies facing college sports.
As Sportico explained in April, a settlement in House and Carter can’t insulate the NCAA and colleges from other antitrust lawsuits. A model where payments are capped could be challenged via the same logic of other NCAA antitrust lawsuits: Competing schools are harming competition by conspiring to limit what each can pay the athlete.
A settlement also wouldn’t address whether college athletes are employees of their schools, their conferences and the NCAA and whether they can unionize. The compatibility of direct pay with Title IX is hazy, too. While the NCAA hopes Congress will see a settlement as marking a new era of reasonableness and justification to grant the association an antitrust exemption, Congress has shown little interest in such legislation to date and we’re in the middle of an election year.
The outspokenness of the settlement’s central figures and the flood of leaks are unusual. Settlement discussions are ordinarily tightly kept secrets. That is especially true when, as in House and Carter, key topics involve complicated concepts that might be mischaracterized or misunderstood in a news story or podcast. College athletes and university leaders reading or listening along might become confused or believe they see a contradiction.
Attorneys are usually concerned that settlement negotiations could be used against their clients in ongoing or future cases—especially if talks break down. Negotiations typically involve the attorneys labeling in emails that the communication is “strictly confidential.” Imagine if NCAA attorneys propose in writing that players be paid up to $250,000 a year but then the settlement fails. That writing would be of interest to many attorneys and players.
Federal Rule of Evidence 408 attempts to insulate settlement talks from being used as litigation weapons. It states that offers and accompanying statements are inadmissible for certain (but not all) purposes. States also have intricate rules about settlement talks where the underlying concern is preserving secrecy.
On one hand, the leaks aren’t surprising given that key stakeholders want to pressure others for support. The NCAA and Baker, who is lobbying Congress, needs a win and needs the greenlight from the 32 Division I conferences. The players’ attorneys, meanwhile, have an obvious incentive to see a multibillion-dollar settlement come to fruition. They’d get a cut—perhaps in the ballpark of 25% to 35%. Journalists happily play a facilitating role. A leak provides an opportunity to break news, which usually means generating attention and clicks.
Yet similarly high-profile sports class actions haven’t played out so publicly. The recent $335 million settlement agreements for the Cung Le, et al. v. Zuffa and Kajon Johnson, et al. v. Zuffa class actions resolve a decade-lasting litigation and involve pay for thousands of UFC fighters. While there was periodic speculation about a potential deal, at no point did UFC CEO Dana White or MMA leaders grant interviews in which they negotiated in public. Neither side leaked any details, either. In fact, news of the settlement came not through a leak but in a regulatory filing by UFC parent TKO Group Holdings to the Securities and Exchange Commission.
The settlement for U.S. Soccer and USWNT players also arrived unexpectedly despite their dispute attracting powerful headlines about gender equity and even attracting commentary by presidential candidates. The same is true of the NFL reaching a $1 billion settlement with retired NFL players and their families over concussions and long-term neurological illness. Those talks involved numerous athletes and in the case of the NFL, teams and owners. Yet everyone kept the talks close to the vest. The same was true of EA’s $40 million settlement with a class action led by Ed O’Bannon.
Playing a game of leaks is also a double-edged sword for the NCAA and players’ attorneys. On Saturday, ESPN reported on opposition to the settlement from non-Power Five conferences. They would be on the hook to absorb about 60% of a $1.6 billion price tag despite the fact House only names the NCAA and Power Five conferences as defendants for damages. They’re sensing that approach doesn’t seem so fair and weren’t reluctant to share that concern with a reporter.
Expect to see other leaks this week, especially from schools worried about potential reductions in payments from NCAA tournament shares.
Don’t forget about the players, either. As they watch high-powered litigators with a financial stake in a settlement negotiate the future of college sports with NCAA officials who are desperately trying to preserve their system, they might sense they’d be better off with a direct voice through collective bargaining.
