On the verge of a historic agreement, the NCAA faces rejection from one of its most prestigious basketball conferences.
In an email Saturday to her members, Big East Commissioner Val Ackerman expressed a “strong objection” to the NCAA’s proposal for how it is determining damages related to the consolidated settlement in the NCAA’s antitrust cases. Chamber, Hubbard and Carter. And she is looking for ways to “alter the plan that the NCAA and A5 have orchestrated,” she writes in the letter, a copy of which was obtained by Yahoo Sports.
The agreement, which is in the final stages of adoption, consists of three main concepts: compensation for damages owed to former athletes ($2.77 billion); revenue sharing for current and future athletes (over $22 million annually per school); and a review of a variety of elements of the NCAA, including scholarship and roster limits, governance structure and law enforcement arm.
Over a 10-year payback period, the NCAA is responsible for paying 40% of the $2.77 billion, with the other 60% coming from a reduction in school distributions. To determine how much each of the 32 Division I conferences contributes, the association created a formula based on the amount of distribution a league earned over a nine-year period starting in 2016, according to separate documents shared with commissioners. Most of the distribution the NCAA divides between leagues — more than $700 million annually — is derived from revenue from the NCAA men’s basketball tournament.
Under the formula, Big East will be responsible for between $5 million and $7 million a year, or up to $70 million over the next decade, a figure that equates to between $600,000 and $700,000 per school per year.
“Based on the numbers we have reviewed, the liability of the 22 non-FBS conferences under the proposed formula appears disproportionately high, particularly since the primary beneficiaries of the NIL ‘backpay’ amounts are expected to be FBS football players.” “Ackerman wrote. . “I have expressed the Big East’s strong objections to the proposed damages framework through recent emails to (NCAA President) Charlie Baker and his attorney and through comments during commissioners’ calls over the past two weeks. “.
While Ackerman and other non-FBS leaders plan to fight for a change in the formula, she is “unclear how much time or influence” they have in such a battle with the main defendants in the case: the football powerhouses generating high earners in Big Ten, Big 12, SEC, ACC, and former and remaining members of the Pac-12.
Power conference leaders plan to vote on and, in all likelihood, adopt the terms of the deal at separate meetings of their board of presidents and chancellors this week. Decisions are expected from Tuesday to Thursday.
The NCAA Board of Governors plans to meet Thursday when they are expected to review and potentially also authorize the deal, according to Ackerman’s letter. Big East leaders are expected to discuss the matter further Tuesday at their league meetings in Florida.
College sports experts describe this week as the most consequential in the history of college sports, as leaders not only approve massive back pay terms but also agree to a framework around a new model that will overthrow the amateurism of Once for all.
“This is a seismic shift in college athletics. It’s not a question of if it’s going to happen,” ACC Commissioner Jim Phillips said last week.
The framework agreement is another factor of tension between the power conferences and all other members of Division I. Exacerbated by disparities in football revenue and the new CFP distribution model, the power leagues are slowly breaking away the rest. The marriage between the two entities, all together under the NCAA umbrella, is on the verge of total collapse.
The new model will include a separate governance structure for rulemaking and enforcement only in power conferences, according to those familiar with the plans, a structure similar to one proposed in December by NCAA President Charlie Baker.
The new model, expected to be implemented in fall 2025, will allow schools to directly compensate athletes for their name, image and likeness (NIL) in a revenue-sharing concept that includes a quasi-salary cap. The cap could start at $22 million annually per school. The revenue sharing element is permissive. While schools are not required to do so, those in power leagues are expected to work at least aggressively to reach a cap amid a competitive recruiting landscape.
In Group of Five conferences and non-FBS leagues, revenue sharing is more difficult. At that level, athletic departments typically don’t make a profit, rely heavily on university and state funding, and often struggle, in this NIL era, to offer athletes many third-party benefits. The average G5 collective is believed to have around $1 million on hand, compared to $5 to $15 million for power conferences. In non-FBS leagues, the numbers are believed to be much lower than even the G5.
For those conferences, like the Big East, back damage represents a significant expense compared to their athletic budget. Because the NCAA formula is calculated on basketball-related distribution and not the total sports budget, the Big East is at a financial disadvantage.
His success in basketball is actually a hindrance. The league routinely earns more in distribution than even some power conference leagues. But their sports budgets, without FBS football programs, are often significantly lower than those of the Power or G5 conferences.
The breakdown of total damage payments provides more clarity.
The power conferences are responsible for about 40% of the $2.77 billion in damages and the other 27 conferences are responsible for about 20%. Power leagues, with an average sports budget of around $130 million, expect to see a reduction of between $1 million and $2 million in annual distribution over 10 years, or less than 2% of the average budget.
In the Big East, a reduction of $600,000 annually for a decade is a much larger percentage of a school’s total budget. UConn, the only Big East member public school with an FBS football program, has a reported budget of $90 million. The school, winner of the last two men’s basketball national championships, is believed to be by far the league’s top-grossing athletic department.
“While we support the goal of a settlement, which would be to avoid a trial (and the risk of a triple sentence) and allow a flexible payment schedule for the damages fine, we have disagreed with the way the amount is set. of the agreement. It would be paid for,” Ackerman writes in his letter.
Together, Ackerman writes, the NCAA national office, the Group of Five conferences and non-FBS leagues will pay 60% of the $2.77 billion. To pay its share, the NCAA national office will use reserves and insurance and reduce operating expenses by $18 million a year, according to separate documents obtained by Yahoo Sports.
Damages are shared between all parties for an obvious reason: they are all part of the NCAA.
Although the lawsuit specifically names each Power Five conference as defendants, it also names the “NCAA” and takes aim at the NCAA’s rule on athlete compensation bans. Over the years, leagues outside of the power conferences voted for, maintained support for, and defended those rules.
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