Houston Christian University on Thursday filed a motion to intervene in the House’s lawsuit against the NCAA, arguing that HCU’s financial interests were not adequately represented by the proposed terms of the House settlement agreed to last month.
The motion, if accepted, could mark the first of many objections from smaller universities who felt they did not have enough say in a potentially historic reshaping of college sports.
HCU’s motion to intervene stems from dissent that emerged in the weeks leading up to the proposed deal, with smaller Division I schools and conferences arguing a lack of involvement in deal negotiations and disproportionate financial responsibility. Terms of the House agreement, which have not yet been submitted to the judge for preliminary approval, include a future revenue-sharing model directly from schools to athletes, as well as $2.75 billion in damages for back pay. that the NCAA will owe former Division I athletes who were previously barred from obtaining name, image and likeness (NIL) compensation. A large portion of those damages are expected to be distributed among former athletes from power conferences, according to sources briefed on the deal.
“We’re in a position where we think this raises some fiduciary responsibility issues,” HCU general counsel Tyler Boyd told The Athletic. “The first thing we want is for our interests to be heard.”
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Houston Christian, formerly known as Houston Baptist University, is a Division I school and FCS football program competing in the Southland Conference. Under the terms of the proposed settlement, over the course of 10 years, the NCAA would be responsible for paying approximately $1.2 billion of back damages using reserve funds, or about 41 percent of the total $2.75 billion. Power conferences would be responsible for about 25 percent of future retained revenue, the Group of Five for about 9 percent, FCS schools (like HCU) for about 12 percent, and DI schools that are not They dedicate about 12 percent to football, all based on DI Revenue Sharing Conference Participation received from 2016 to 2024.
For non-FBS football conferences that don’t have the benefit of lucrative television rights contracts, those percentages represent a more significant financial burden. A Division I commissioner previously estimated to The Athletic that non-FBS conferences could be hit with $2.5 million per year in withheld revenue to help cover the costs of NCAA retroactive payments, which can be as much as 25 percent. percent of annual distributions. some universities receive from the NCAA. This is despite antitrust lawsuits, such as the House case, which seeks damages largely as restitution for the billions of dollars raised through those power conference media deals. .
Multiple administrators from the 22 non-FBS conferences, collectively called CCA22, previously told The Athletic that they were not informed about the House deal discussions until last month, after the financial structure of the conferences had already been formulated. Payments. In late May, prior to the proposed agreement, CCA22 representatives submitted a formal request to the NCAA Board of Governors and the Division I Board of Directors to delay a final decision on the financial breakdown or adjust it to a higher revenue rate. provided. reductions for each conference, but to no avail.
“I understand that this change will not be easy to manage, but given the challenges college sports have faced in recent decades, change is inevitable,” Baker wrote in the letter sent to NCAA members last month about the terms of the agreement. proposed agreement.
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HCU’s intervention motion seeks legal intervention in an agreement that the university claims will unfairly “divert funds from academics to athletics” due to NCAA withholdings and would negatively impact its students, athletes and non-athletes alike.
If accepted, the motion would essentially add HCU as a defendant along with the power conferences and the NCAA in general, which could open the door for other universities to follow suit and potentially send the agreement back to the negotiating table.
Overall, HCU’s efforts further illustrate the many divisions and oppositions among NCAA institutions and why the organization has often struggled to appease such a broad membership. HCU was technically represented as a defendant in the House lawsuit by the NCAA, which voted to approve the settlement agreement through the Division I Board of Governors and Board of Directors. However, the motion makes clear that the school did not feel properly defended in the negotiations.
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Steve Berman, one of the lead plaintiff attorneys in the House case, told The Athletic via email: “No agreement has been finalized or filed, so I wonder how this school can intervene in opposition to something that is not it does.
“Contrary to claims, there is nothing in the agreement that requires Houston Christian University to spend more in the future,” Berman continued. “Rather, it gives universities the option to spend on their athletes under a freer and fairer system. “If HCU doesn’t want to do it, it doesn’t have to.”
A source briefed on HCU’s decision to file the motion to intervene told The Athletic that doing so now, before the terms of the deal are officially presented or approved, was the best opportunity to object to the deal as agreed and have a most appropriate voice in negotiations.
In a statement provided to The Athletic on Friday, the NCAA said: “This proposed agreement is a major step toward creating a future for all three NCAA divisions that is fair, stable and sustainable, while ensuring that provide educational opportunities for all students. Athletes remain a fundamental element of college athletics. The proposal also allows for significant flexibility by allowing Division I schools to direct additional financial benefits to student-athletes based on each school’s specific priorities and financial capabilities, if they so choose. Future revenue reductions will be distributed equally across Division I; the national office and A5 will assume 66 percent of the cost and, for the average non-A5 school, this revenue reduction will represent approximately 1 to 2 percent of a school’s athletic costs. money.”
The impact of HCU’s motion will be determined by whether Judge Claudia Wilken, who is presiding over this case in the Northern District of California, ultimately grants the intervention. It’s also possible that other universities could file similar motions before the judge makes a decision on HCU, and that the judge could collectively rule on multiple motions to intervene, a source familiar with the case told The Athletic.
“We believe this case raises issues of financial responsibility for the university’s mission, including those funds that could be diverted from the university’s operations. Because it affects the university as a whole and the students who attend the university who are not student-athletes. The intervention truly represents the interests of those we serve as our students.”
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