How is this proposed $2.8 BILLION settlement going to impact FURMAN and similar schools? I wish I really knew the answer to that, and I hope people who do know better than I do will shed light on the subject.
My guess is that
it will cost the Furman Athletics budget at least about $200,000 per year to be in compliance with the settlement, and that will be to help pay the big bucks to former FBS athletes going back to the year 2016, for example Trevor Lawrence, etc.
What would 1.68% of Furman's annual athletics budget equate to?
What would 1.00% of Furman's annual athletics budget equate to?
Please, someone who knows, really knows, shed some light.
Below are excerpts from 5/22/24 article by Nell Gluckman in The Chronicle of Higher Education.
(
Sorry if it is far more than you want to read. It IS reduced from what you'd be reading in the full article as publshed.)
LOOMING LIABILITIES
A Major Sports Settlement Is Poised to Cost Colleges Billions. How Would They Pay for It?
By Nell Gluckman
MAY 22, 2024, CHRONICLE OF HIGHER EDUCATION
There has been so much legal action about college sports …that you may have understandably tuned it out. Now is the time to tune back in.
NCAA’s most prominent conferences are voting on a proposed settlement in the case House v. NCAA, which seeks damages for athletes who played before the association began allowing NIL.
…news reports suggest the NCAA and the power conferences will vote by Thursday on the terms of a settlement that would cost them about $2.8 billion in damages — and
a subset of the institutions even more in the future. Such a settlement, which would be reviewed by a federal judge after the two sides agreed to it, is aimed at heading off a trial that could reportedly cost the association an exponentially greater sum of around $20 billion. Even by today’s standards of constant challenges to the association’s limits on player compensation, this case is monumental.
But on top of that payment, the settlement reportedly includes a revenue-sharing plan in which universities in the most lucrative athletic conferences would have the option of paying up to about $20 million per institution a year to their athletes — a historic step for an enterprise that has long prohibited direct pay. Those colleges would face pressure to contribute to the athletes’ pool or risk losing top players to rival institutions.
That’s a heavy financial toll, and it could severely squeeze athletic programs already struggling to stay competitive.
This is the third major antitrust case that the NCAA has faced in recent years. The association had for decades argued successfully that “amateurism” was the source of college sports’ appeal, and thus could not be struck down on antitrust grounds. That argument began to falter with O’Bannon v. NCAA, which the association lost in 2015, and Alston v. NCAA, which it lost in 2021.
“Alston was a huge deal,” Marc L. Edelman, a law professor at Baruch College of the City University of New York, said, because it “put an end to the argument that NCAA was somehow different when it came to antitrust law.”
The U.S. Supreme Court’s ruling was 9 to 0 in Alston, a decisive verdict that legal scholars say sent an unmistakable message to the association’s member colleges: If the House case went to trial, the NCAA would probably lose.
“It’s an amazing wake-up call for the NCAA member schools,” Edelman, … said of Alston and House.
Sink or Swim
According to news reports, hundreds of colleges will see revenue drops over the next decade to pay damages, while a smaller subset of the highest-profile conferences will put revenue away to share with players.
The question of how to divide up payments into the former pot has gotten contentious, according to multiple news reports. In some versions of the settlement,
Division I conferences outside the power conferences have been on the hook for a sizable percentage of the payments. Leaders of those conferences have argued that is unfair because the payments would not be going to their former players, but would mainly benefit football players from the conferences that generate much more revenue ….
Then there’s the revenue-sharing plan, which would apply only to the Power 4: ACC, B10, Big 12, & SEC . News reports indicate that the proposed settlement would give each member college the ability to devote about $20 million annually to players directly.
Given the competitive pressures in the major conferences, it’s likely most colleges will opt to pay. Where will they find the money? Will sports that do not generate revenue — think swimming, soccer, squash — be cut? Would the state legislature help? Could insurance cover it? Much depends on the precise language in the settlement, but assuming revenue-sharing comes to pass, some scenarios are more likely than others.
First of all, athletic departments with the biggest revenue…will be able to take this hit much more easily than will their peers by, for example, drawing on major donors.
Other power-conference institutions that want to remain competitive but do not have $20 million lying around will most likely pull together the money from a variety of sources….
Taking from a university’s endowment would not be a conventional business decision, Smith added. “It would be pretty rare for a university to dip into the endowment to pick up this athletic revenue.”
Cutting less-lucrative sports has been a hard sell in the past. Stanford ..., for example, tried to cut 11 sports in 2020 to save money but reversed course after it faced lawsuits. Eastern Michigan Univ. also tried to eliminate four sports programs for financial reasons, only to be ordered by a judge to reinstate two of them.…
So what options will colleges have? Student fees, booster clubs, ticket sales, and the institution itself.
Dean speculated that colleges could raise millions a year by substantially increasing the annual fees students pay toward athletic departments. Colleges might also rely on booster clubs — fans and alumni who pay a premium for perks at football games — by increasing membership fees. Then the ticket prices could be raised.…
The bottom line is that a big new yearly expense will hurt some universities much more than others. “This is like throwing 60 swimmers in the deep end of the pool,” … “We’ll find out who can’t swim ....”