NCAA could face $20B in damages, bankruptcy if proposed settlement offer isn't agreed upon

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If they reject a proposed settlement offer, officials from the NCAA and power conferences stand to face a catastrophic $20 billion in back damages as well as risking a bankruptcy filing, according to documents obtained by Yahoo Sports.

The two-page document was circulated among power conference presidents and administrators on Tuesday as ACC leaders met at their annual spring meetings in Florida. It details terms of a potential settlement in the House, Hubbard and Carter antitrust cases, a trio of legal challenges brought against the NCAA and its five power conferences seeking back pay for various athlete compensation elements.

The settlement, believed to be in the final stages of adoption, consists of three main concepts: billions in back damages; a new compensation model permitting schools to share as much as $22 million annually with athletes in a capped system; and an overhaul of the NCAA scholarship and roster structure.

The document outlines settlement concepts in detail as well as particulars around the new compensation model. It also provides university leaders with new information on hot-button topics such as how a settlement protects the NCAA from future legal challenges, Title IX’s application and the enforcement of booster-led collectives in a “new infrastructure.”

Documents specify, perhaps for the first time in writing, the total amount in back damages owed to athletes for the use of their name, image and likeness (NIL) before the NCAA lifted NIL prohibitions in 2021.

The amount is $2.776 billion.

The NCAA is responsible for paying the amount over a 10-year period, roughly $277 million annually. About 60% of that will come from a reduction in distribution to its schools. The NCAA is responsible for closing the 40% gap through other means, such as reserves, other net incomes and a significant reduction in operating expenses of as much as $18 million annually.

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