Some Schools Concerned About Memo Binding Them to House Settlement

Over the past few months, the power conferences have been working on a memo for member schools to sign that would bind them to the terms of the proposed House v. NCAA settlement. Specifically, the memo would attempt to prevent the schools from suing the conferences challenging new restrictions on NIL (name, image, and likeness) booster and collective deals, as well as the cap on revenue-sharing. 

But officials at multiple schools, including coaches, have expressed concerns about signing the memo, sources tell Front Office Sports. 

“I would say more [schools] are in the camp of, ‘We do want to get a level playing field. We do want to know what the rules are, and have an understanding that our peers are going to abide by the same rules that we plan to abide by,’” says president of Altius Sports Partners College, Andrew Donovan, who has had conversations with multiple school officials about the memo. “But then, there are others that are in this boat of uncertainty.”

The memo, first reported by Yahoo Sports on Monday and subsequently confirmed by FOS, has been in the works for some time, with one source saying it has been discussed and in circulation since at least April. 

The memo’s goal is to ensure that there’s competitive balance in a world where the House v. NCAA settlement passes. The power conferences are tasked with enforcing the NIL terms, which include the ability for schools to share revenue with players, but only up to a certain amount decided each year; and a clearinghouse that would scrutinize NIL deals and potentially punish players, schools, and even boosters or collectives that engage in deals that could be seen as “pay-for-play.” But there’s concern that, even with schools agreeing to these settlement terms, things like a revenue-sharing cap and punishment for certain NIL deals could be challenged in court on antitrust grounds.

The proposed solution: get schools to sign this memo promising they won’t sue to challenge the terms of the settlement or the punishments they incur by violating it. 

The memo itself is not public—only a small group of high-level campus officials have seen it, like athletic directors, university presidents, and general counsels, sources tell FOS. Yahoo Sports reported that schools were told they would be kicked out of their conferences if they refused to sign it. 

Schools have expressed a few concerns.

First, lawyers representing schools have said they worry whether the memo itself is legal and enforceable, Donovan says. After all, the terms of the House settlement may be challenged in court by players and/or NIL collectives, boosters, or companies whose NIL earnings are restricted or whose deals could get rejected. State attorneys general could sue the power conferences on behalf of players, schools, or brands for enforcing the House settlement rules as well. There’s already precedent for such cases: A previous NIL case led by Virginia and Tennessee AGs ended with the NCAA not being able to enforce several major NIL restrictions. And, of course, it’s unclear whether the  punishments in the agreement are legal—and could be challenged later.

What’s more, the agreement itself might put schools in conflict with their own state laws. Take Tennessee: The state recently passed a law that would not only allow revenue-sharing regardless of the House settlement, but also prohibit conferences or the NCAA from enforcing NIL deal restrictions or  revenue-sharing. A school like Tennessee could find itself in an awkward position if it signs a memo that effectively vows to abide by rules that are more restrictive than state laws. (A Tennessee representative declined to comment.)

Beyond legal concerns, some schools worry they could face a competitive disadvantage if they sign the agreement but non-power conferences don’t make their schools do the same, Donovan says. (There is an expectation that other D-I programs, like Big East schools and non-power FBS programs, would eventually be asked to sign similar terms.)

Ultimately, the status of the memo is just another question mark as schools await final word on the House settlement’s approval. That could come anytime this week—or later.