Although the proposed multi-billion-dollar settlements of three athlete-compensation antitrust cases against the NCAA and the Power Five conferences have not yet received final approval from the federal judge overseeing the matters, conference officials have been working toward a comprehensive plan to implement and enforce what would be a set of far-reaching and fundamental rules changes for schools and athletes.
While the new regulations would be integrated into the NCAA’s existing Division I rulebook, they would be overseen by the power conferences, which intend to create a new regulatory and enforcement entity led by a chief executive officer akin to a professional sports league commissioner, four people with knowledge of the conferences’ intent told USA TODAY Sports on Wednesday. They requested anonymity due to the sensitivity and ongoing nature of the discussions.
The new entity would be charged with handling only these issues.
U.S. District Judge Claudia Wilken granted preliminary approval to the proposed settlements in October. She is set to hold a final-approval hearing on April 7 concerning the agreements, which would include nearly $2.8 billion in damages that would go to current and former athletes over 10 years. They also would allow Division I schools to start paying athletes directly for use of their name, image and likeness (NIL) during the 2025-26 school year, subject to a per-school cap that would increase over time and be based on a percentage of certain athletics revenues.
In addition, the deal also would attempt to bring NIL payments to athletes from sources other than the schools under some enforceable rules. Under the settlement, all Divsion I athletes — regardless of whether their individual schools choose to provide NIL payments — would have to report non-school NIL payments of more than $600 to a clearinghouse that would be established. And their deals would be subject to review, with the goal being the prevention of pay for play and deals that pay amounts above market value.
At present, the NCAA has rules that prohibit athletes from receiving pay for play and from having NIL deals that are used as an inducement to enroll or remained enrolled at a specific school. However, those rules have been virtually impossible for the association to enforce. That has been due to the growing prevalence of school-specific collectives — donor groups dedicated to pooling resources earmarked for NIL payments that often are, at best, only loosely based on the value of an athlete’s NIL rights or their promotional work.
The responsibility for figuring out ways to enforce the cap on NIL payments from the schools and to create reporting and evaluation procedures for athletes’ non-school NIL deals has been handed to group of 10 athletics directors, two from each of the five conference defendants, that is being called the Settlement Implementation Committee.
The committee is working in concert with legal and compliance officials from the conferences and the NCAA.
There are myriad procedures and processes that need to be addressed, and the committee has set up four separate working groups to deal with them. The committee also is working with an entity called LBi Software to create a cap tracking system and with Deloitte Consulting LLP to create another system that would be used to assess the athletes’ third-party NIL deals. LBi Software has worked with Major League Baseball, the NBA and the National Women’s Soccer League, according to its website.
Among the issues being addressed:
How schools’ NIL payments to athletes will be entered into a system and tracked, and how any efforts by schools or boosters to circumvent the cap will be addressed. One of the four people with knowledge of the situation said the committee is looking at recommending a set of four or five of what were termed as very significant penalties. The reaction of a school to one of those penalties would remain to be seen, but another person noted that this is what the schools are signing up for in their effort to settle this massive litigation.
How athletes’ third-party deals are handled and evaluated and what happens when a deal is not approved. The people said the athletes would bear the primary responsibility for submitting their agreements for evaluation. While the term fair market value has been used to describe a potential benchmark, one person said that, instead, an assessment would be made based on whether an arrangement involves the use of an athlete’s NIL to advance a valid business purpose and whether the athlete’s compensation falls within an acceptable range of compensation for similarly situated individuals.
Of course, defining those terms will require some additional work. But this person said that as deals are entered into the system, the system should build on itself.
The committee is trying to develop ways of clearly communicating with athletes, who — under the proposed settlement — would have the ability to appeal deals that are not initially approved to neutral arbitrators who would be selected by lawyers for the plaintiffs and the conferences/NCAA.
The 10 athletics directors on the implementation committee are Texas A&M’s Trev Alberts, Oregon State’s Scott Barnes, Kentucky’s Mitch Barnhart, Georgia Tech’s J Batt, Ohio State’s Ross Bjork, Washington’s Pat Chun, Cincinnati’s John Cunningham, Clemson’s Graham Neff, Washington State’s Anne McCoy and Arizona’s Desiree Reed-Francois.