The long-awaited, long-form negotiation in House v. NCAA, which was delivered to a federal court on Friday, includes both special conditions for how college athletes are compensated and how their attorneys are compensated.
The defendants ‘ attorneys, Hagens Berman and Winston & Strawn, can ask for a$ 20 million “upfront injunctive fee” as well as an annual percentage of the proceeds that schools will give to athletes over the next ten years, according to the parties ‘ stipulation and settlement agreement. Finally, the amount of money that would be available to athletes be deducted the following year.
Due to the unusual legal-fee fluid, which is boiled over, the more the class counsel could make the more money the athletic departments make and thus distribute to athletes. That’s assuming they submit an application for these expenses and that the judge or special master accepts their demands. On the other hand, doctors may receive a lower salary the less money the schools will give out.
Under the House settlement terms, the lawyers ‘ maximum share will start at 0.75 % for the first three years of the agreement, jump to 1 % in years 4-6, increase to 1.25 % in years 7-9, and then jump again to 1.5 % in the 10th year.
That is probably tens of millions of dollars over the course of the agreement. The “benefits pool”, as defined in the lawsuit, did begin at roughly$ 22 million per class. The math on this is difficult, but it’s essentially 22 % of the profit brought in by Power Five organizations ( and Notre Dame ), under a rigorous series of groups, including ticket income, media rights and meeting distributions. That$ 22 million per school, multiplied by the roughly 70 Power Five schools, creates an annual pool of about$ 1.54 billion—the maximum amount of direct compensation athletes can receive beyond their current allowable benefits.
The attorneys ‘ payment of$ 0. 5 per$ 1. 54 billion could be used to pay a maximum of$ 11. 5 million in Year 1 if every Power Five class spent to the maximum in the first year. If schools spend three-quarters of the cover in the first year of the lawsuit, the lawyers ‘ optimum injunctive relief fees may get$ 8.66 million.
The cap will increase over the course of the ten years, either by 4 % each year or by set re-calculations every third year. The cut the lawyers can apply for will also increase, as described above. If top-tier college athletics revenue takes off, as many expect it to, so, too, will the amount shared by athletes. And so will the sum that the attorneys may ask for.
The injunctive fees are to be taken into account separately from their fees related to the damages claim, according to the settlement agreement. Typically, plaintiffs lawyers in class-action cases come away with around 25-30 % of the damages amount. However, the likelihood of making it rain is offset by the chance of leaving with nothing after years of litigation.