Litigation

Just in Time for March Madness -- NCAA Anti-Trust Settlement

By Bruce Nye

So the record is clear, CalBizLit is an avid fan of college football's University of California Golden Bears, and an ever hopeful fan of the same institution's men's round-ball squad, which just squeaked by its first round in the obscurity of the NIT (before a home crowd of, ahem 1900).  And demonstrating a triumph of west-coast bias over sports acumen and common sense, he's picked UCLA to beat Kansas in the big dance.

I'm also well aware of, and concerned about the abuses of college sports. The fact is, in big time sports there are parallel educational institutions for athletes and non-athletes.  The system often fails to serve all but the top-tier athletes, and they often leave long before graduation anyway (See The Game of Life, for example.  So I'd had some interest in White v. NCAA, Central District No. CV 06-0999, an anti-trust class suit by basketball and football players contending that "full ride" scholarships just always, somehow, seemed to come up  a few thou short of the real cost of an education.

But I had forgotten about the case until I was catching up on  back issues of Verdict Search California (subscription req'd) and saw that the case had settled. I did a little digging on the internets, and found  (a)  the order certifying the class (the reason, of course, for the settlement) and (b)  the notice setting out the terms of the settlement. 

More after the jump.

Here's what the NCAA agrees to do:

• Spend $218 million "for the benefit of their student-athletes for purposes allowed under the current guidelines," and it can use funds already used for those purposes.  In other words, to spend what it was already going to spend on what it was already going to spend it for;
• To allow, but not require, schools to provide accident insurance and year-round health insurance to student athletes;
• To study allowing aid to student-athletes who lose their athletic scholarships and also study possible multi-year scholarships;  and
• To make available, over three years, $10 million in reimbursements for "career development expenses" (payments up to $500) and "bona fide educational expenses incurred at an accredited" institution (up to $2,500 per year) -- only for expense "hereafter" incurred. 
   

That's right -- the only thing the NCAA is offering to do that it wasn't going to do anyway (other than "study" things) is to reimburse for moneys paid to schools (presumably NCAA member schools). This is, in short, what's known as a "coupon settlement."  (CalBizLit discussed coupon settlements before in the context of the Ford Explorer Class Action.)

Incidentally, the order certifying the class indicates a class size of 48,000. $10,000 divided by 48,000 is . . . drum roll . . . $208.33 per class member.

Oh, and did I mention the attorneys' fees?  $7.5 million.

Fairness hearing June 30, 2008, 1:30 p.m., US Courthouse in Los Angeles, Courtroom 9.

Full post as published by CalBizLit on March 20, 2008 (boomark / email).