Today, Hagens Berman and Winston & Strawn LLP announced jointly with the NCAA, Big Ten, SEC, Pac-12, Big 12 and ACC a landmark antitrust class-action settlement poised to radically change the economic model of college sports and provide billions of dollars in backpay damages and tens of billions of dollars in future revenue-sharing to college athletes.
The settlement resolves three pending antitrust lawsuits, House v. NCAA, Hubbard v. NCAA and Carter v. NCAA, which challenge NCAA limits on compensation and benefits that college athletes can receive for their athletic services and their names, images and likenesses (NIL).
In addition to paying more than $2.75 billion in damages to college athletes over a 10-year period, the settlement eliminates certain rules from the NCAA and conferences that prohibit direct payments from schools to athletes. The settlement also allows schools to share revenues directly with college athletes through new payments and benefits.
Bringing College Sports into the 21st Century
In the first year of the settlement, each school can share 22% of the average Power 5 school’s revenues, which is currently projected to be significantly more than $20 million per school, per year. These new payments and benefits come in addition to scholarships, third-party NIL payments, health care and other benefits that college athletes already receive, and schools can choose to make the new payments and benefits to athletes playing any Division I sport.
The settlement also eliminates NCAA scholarship caps to open the door to more opportunities for Division I athletes across every sport.
The value of the new benefits and payments that can be provided to the college athletes under the settlement will grow each year, as college sports revenues increase. Over the 10-year settlement period, attorneys estimate that the total value of new payments and benefits that may be shared with college athletes will exceed $20 billion, making it one of the largest antitrust class-action settlements in history.
“This landmark settlement will bring college sports into the 21st century, with college athletes finally able to receive a fair share of the billions of dollars of revenue that they generate for their schools,” said Steve W. Berman, Hagens Berman managing partner and co-founder. “Our clients are the bedrock of the NCAA’s multibillion-dollar business and finally can be compensated in an equitable and just manner for their extraordinary athletic talents.”
Winston & Strawn co-executive chairman Jeffrey L. Kessler, who also negotiated the class-action settlements that created the free agency systems for athletes in the NFL and the NBA, said, “Today there is widespread recognition among college-sports athletes and fans that there is no justification for the NCAA to continue prohibiting college athletes from sharing in the massive revenues that they generate for their schools and conferences. We have been marching down this long legal road seeking economic justice in college sports for more than a decade, but the time to bring a fair compensation system to college athletes has finally arrived.”
The Winston & Strawn and Hagens Berman teams previously prevailed in Alston v. NCAA as co-lead class counsel, which culminated in a unanimous Supreme Court opinion affirming that antitrust law applies with full force to NCAA rules. That ruling laid the groundwork for these settlements.
Hagens Berman is a global plaintiffs’ rights complex litigation law firm with a tenacious drive for achieving actual results for those harmed by corporate negligence and fraud. Since its founding in 1993, the firm’s determination has earned it numerous national accolades, awards and titles of “Most Feared Plaintiff’s Firm,” MVPs and Trailblazers of class-action law. The firm’s cases have recovered more than $320 billion for its clients. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Winston & Strawn LLP’s Sports Litigation Practice, co-led by David Greenspan and David Feher, is one of the country’s most highly regarded sports litigation practices. Winston & Strawn LLP is an international law firm with 15 offices in North America, South America, Europe, and Asia. More information about the firm is available at www.winston.com.
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