FCS School Challenges Proposed Rule House v. NCAA: What Houston Christian’s motion could mean for the case

Houston Christian University filed a motion Thursday to intervene in the House v. NCAA, arguing that HCU’s financial interests were not properly represented by the proposed terms of the House settlement agreed to last month.

The motion, if granted, could mean the first of many objections from small universities who felt they didn’t have enough of a voice in a potentially historic overhaul of college sports.

HCU’s motion to intervene stems from dissension that arose in the weeks leading up to the proposed settlement, with small Division I schools and conferences arguing a lack of input into settlement negotiations and disproportionate financial responsibility. Terms of the House settlement, which still must go 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 the NCAA will owe alumni Division I athletes who were previously ineligible to earn name, image and likeness (NIL) compensation. A large portion of those damages are expected to be distributed to former power conference athletes, according to sources briefed on the settlement.

“We’re in a position where we think this raises questions of fiduciary responsibility,” HCU general counsel Tyler Boyd said. Athleticism. “Above all, we want 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 that competes in the Southland Conference. Under the terms of the proposed settlement, over a 10-year period, the NCAA would be responsible for paying approximately $1.2 billion in damages using reserve funds, or approximately 41 percent of the $2.75 total. billions of dollars. Power conferences would be responsible for about 25 percent of retained future revenue, the Group of 5 about 9 percent, FCS schools — such as HCU — about 12 percent and non-football DI schools of approximately 12 percent, all based on the share of DI revenue distribution conferences received from 2016 to 2024.

For non-FBS football conferences without lucrative television rights contracts, these percentages represent a greater financial burden. A Division I commissioner previously estimated Athleticism that non-FBS conferences could have to pay $2.5 million a year in withheld revenue to help cover the NCAA’s backlog costs, which can reach up to 25 percent of the annual distributions some universities receive from the NCAA. This is despite antitrust lawsuits such as the House case seeking damages, largely in the form of disgorgement of the billions of dollars collected through these power conference media deals.

Several administrators from the 22 non-FBS conferences, collectively called CCA22, previously said Athleticism they were only informed of the House rule discussions last month, after the financial structure of the payments had already been formulated. In late May, prior to the proposed settlement agreement, representatives of CCA22 submitted a formal request to the NCAA Board of Governors and the Division I Board of Governors to either delay the final decision on financial distribution or to adjust it to a more proportionate income rate. discounts 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 over the past several decades, change is inevitable,” Baker wrote in the letter sent to NCAA members last month. latest regarding the proposed settlement conditions.

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HCU’s motion to intervene seeks legal intervention in a settlement that the university says would “unfairly divert funds from academics to athletics” due to NCAA withholdings and would negatively impact its students, athletes and non-athletes.

If granted, the motion would essentially add HCU as a defendant alongside the power conferences and the NCAA as a whole, which could open the door for other universities to do the same and potentially return the settlement to the table negotiations.

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 wide range of members. 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. Yet the motion clearly shows that l The school did not feel properly defended during the negotiations.

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Steve Berman, one of the lead attorneys for the plaintiffs in the House case, said Athleticism via email: “No settlement has been finalized or filed, so I wonder how this school can intervene in opposition to something that is not being done.

“Contrary to what is claimed, nothing in the settlement requires Houston Christian University to spend more in the future,” Berman continued. “Rather, it gives universities the choice to spend on their athletes in a freer and fairer system.” If HCU doesn’t want to do it, it doesn’t have to do it.

A source briefed on the HCU’s decision to file the motion to intervene said Athleticism that doing so now, before the terms of the settlement were formally submitted or approved, was the best opportunity to oppose the settlement as agreed and have a more adequate voice in the negotiations.

In a statement provided to Athleticism On Friday, the NCAA said: “This proposed settlement is a major step toward creating a future for all three NCAA divisions that is fair, stable and sustainable, while also ensuring that the provision of educational opportunities to all student-athletes remains a fundamental part of the university. Athletics. The proposal also allows for significant flexibility by allowing Division I schools to provide additional financial benefits to student-athletes based on each school’s specific priorities and financial capabilities, if they choose. Future revenue reductions will be distributed evenly across Division I with the national office and A5 covering 66 percent of the cost and for the average non-A5 school this revenue reduction will represent approximately 1 to 2 percent of the school sports activities. funding.”

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, decides whether to grant intervention. It’s also possible that other universities will file similar motions before the judge rules on HCU, and that the judge could decide several motions to intervene collectively, a source familiar with the matter said. Athleticism.

“We believe this case raises the issue of financial accountability for the university’s mission, including funds that may be diverted from the operation of the university. Because it impacts 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 students.

(Photo: Mitchell Layton/Getty Images)