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Could impending NCAA settlement save March Madness?

Could impending NCAA settlement save March Madness?

For the past few years, major college athletic conferences have tacitly threatened to leave the NCAA altogether and start a new “Super League” with its own requisite governing organization.

At risk would be not just the financial and competitive stability of hundreds of schools left behind (including perhaps D-II and D-III), but also the beloved NCAA basketball tournament which would either be lacking power teams or Cinderellas, both of which are needed to form the perfect cocktail that makes March Madness.

It’s a nightmare for most fans who love college athletics. Even for many who cheer on the big schools.

The long-term threat remains, of course. Money rules everything, especially so-called amateur athletics as revenue streams and shares are unapologetically pursued.

The chance of a split isn’t gone.

That said, it is possible that the DEFCON rating for such action should be lowered in the wake of the expected college athletics settlement this week in the federal House v. NCAA case.

If nothing less, the big schools and big conferences now have around 2.1 billion reasons to stay put and keep both the NCAA and the other 27 Division I conferences, including 22 non-football playing leagues, both alive and viable.

If so, count it as a huge, if deftly quiet, victory for NCAA president Charlie Baker, even as the teams and leagues that may benefit from it hammer him for his plan.

It’s possible Baker will have saved the NCAA as we know it, at least for now.

In brief, the House case stems from the 2021 ruling by the NCAA to allow athletes to profit off their name, image and likeness. The settlement calls for about $2.8 billion to be paid to players from the prior four years who were thus denied that revenue opportunity.

That’s a lot of money, even for the Ohio States and Georgias of the world.

However, the framework for the payout, according to our Ross Dellenger, shifts the bulk of the payments away from the big-name, big-money schools.

That includes the NCAA central organization picking up $1.1 billion of the tab.

Of the approximately $1.65 billion that remains, the Power Five conferences (ACC, Big Ten, Big 12, Pac-12 and SEC) will pay $664 million. The remaining 27 leagues (from the Mountain West to the Patriot) will cover $990 million. All payments would be made over the next 10 years.

Smaller conferences have bristled at this, arguing that the power leagues should pay more because it is their athletes who will receive the payouts.

Essentially, it is star football players who were denied their NIL profits, not athletes from low- or mid-major leagues where NIL isn’t a big thing. Some estimates have as much as 85% of the settlement money eventually going to those football players.

Should the NCAA (whose funding comes almost exclusively from March Madness, not football) and 27 conferences who either play a less-profitable version of football (MAC, Sun Belt) or no FBS football at all be on the hook for about 76% of the settlement because Trevor Lawrence and Joe Burrow couldn’t make NIL money at Clemson and LSU respectively?

Probably not.

However, in an odd, if expensive way, the other 27 conferences and the NCAA itself picking up the bulk of the settlement has one significant advantage.

The big conferences need them. Not only do they need them, they need them to remain financially solvent and capable of continuing to pay their share for the next decade. To do that, they need the NCAA to continue to exist and the NCAA basketball tournament to thrive and thus fill the coffers of both the NCAA itself and the smaller conferences.

It’s the antithesis of collegiality, but again, money is everything here. Many hands make light work.

Even the major conference programs are nervous about not just this settlement payout, but additional lawsuits on the horizon. And that is before they need to start sharing revenue directly with the athletes. Boosters are mostly tapped out. Television deals have been negotiated.

The business of college athletics — or at least college football — is booming, but labor costs are about to go from tuition, room and board to maybe 30% or more of incoming revenue. It seems almost no college thought ahead and saved for a rainy day — let alone the storm that comes with cutting athletes in on the cash.

Even the big guys need the little guys to help carry the load of $2.8 billion.

That certainly doesn’t assure that the status quo will continue. It doesn’t mean that the biggest conferences still couldn’t break off and form a super league and leave everyone in their dust.

It does mean it would be far more costly — perhaps prohibitively so — to do it though. At least for the next 10 years and $2.1 billion.

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