FCS school challenging proposed NCAA settlement allowing revenue sharing among athletes

In the first sign of potential trouble for the proposed settlement of three athlete-compensation antitrust cases against the NCAA and the Power Five conferences, a school from outside the Power Five on Thursday filed a motion seeking to intervene in the case and making a presumptive request that a federal judge declare the proposed agreement is "void and of no effect."

Lawyers for Houston Christian University (HCU), a member of the Football Championship Subdivision’s Southland Conference, wrote in their bid to intervene: “The proposed settlement will adversely affect HCU. None of the parties, particularly the Defendants, has consulted with — much less taken any step to protect — HCU’s interests. Neither HCU nor its conference were parties to this litigation, had a seat at the negotiating table, or had any input into any resolution of this matter, including the proposed settlement.”

In the presumptive motion for relief, HCU's lawyers wrote that "a dispute exists between HCU and (the NCAA and the Power Five conferences) regarding the ability of (those parties) to approve and enter into the proposed settlement." They also wrote that they believe "the proposed settlement is being or has been approved by the NCAA in violation of the NCAA's constitution, bylaws and rules."

The proposed settlement includes $2.8 billion in damages that would be paid former and current athletes and sets up the prospect of billions more in future revenue-sharing payments that schools would be allowed to make to athletes.

The proposed settlement still must be submitted as a formal petition for preliminary approval with U.S. District Judge Claudia Wilken. Lawyers involved in the proposed settlement wrote in a filing May 30 that they anticipated this submission would occur on or before 30 days from that date, but "in any event no later than 45 days" from that date.

The agreement was approved the NCAA's Board of Governors, the association's top decision-making group that includes representative all three competition divisions; Division I's top-level Board of Directors, and the membership of each of the Power Five conferences.

The NCAA said in an email Thursday night: "This proposed settlement is a massive step toward creating a future for all three NCAA divisions that is fair, stable and sustainable, while also ensuring that providing educational opportunities for all student-athletes remains a foundational element of college athletics.

"The proposal also allows for significant flexibility by allowing Division I schools to direct additional financial benefits to student-athletes based on each school’s specific priorities and financial abilities if they (choose) to.

"The future revenue reductions will be spread equitably across all of Division I with the national office and (Power Five conferences) taking on 66% of the cost and for the average non-(Power Five) school, this revenue reduction will account for approximately 1%-2% of a school’s athletics funding."

Steve Berman, one of the lead attorneys for the athlete plaintiffs in the antitrust cases, said via email:

"There is no settlement that has been finalized or filed, so I question how this school can intervene in opposition to something that is not done. …

"Contrary to what is claimed, there is nothing in the settlement that requires Houston Christian University to spend any more in the future; rather, it gives universities the choice to spend on its athletes under a more free and fair system.  If HCU doesn’t want to do so, it doesn’t have to. …

"To the extent the settlement requires defendants to spend money on past damages, it is because the defendants broke the law and agreed to collusively keep the gains of college athletics for themselves. HCU’s complaints about this, to the extent they are being asked to contribute to the settlement fund, should be with those who perpetrated the conspiracy for so long, not the college athletes who have been denied their fair share of the billions their labor helped generate for years."

One of the lawyers for HCU is James Sears Bryant, who helped the school in a legal battle with the NCAA when the school, then known as Houston Baptist, sought to move back to the NCAA's Division I from the NAIA. At issue was the length of the school's transition period to full NCAA membership. Under a settlement, it was reduced from seven years to four, allowing it to resume full NCAA membership in 2011. Sears also has endowed HCU's men's basketball head coaching position.

Houston Christian’s filing is based on two basic arguments that headline separate sections of its motion to intervene:

--"The Proposed Settlement Will Divert Funds from Academics to Athletics and thereby Institutionalize a Breach of Fiduciary Duty of Colleges and their Trustees”

--"The Proposed Settlement Will Divert Higher Education Dollars from Marginalized and Underserved Populations of Students.”

In its final section, the filing states:

“In sum, the proposed settlement will privilege the pursuit of big-money college sports over the needs of ordinary students whom institutions like HCU serve. It will conflict directly with the stated purpose of virtually every institution of higher education in America, which is to educate students. It forces the trustees and administrators of HCU and other similarly situated institutions to confront a Hobson’s Choice; it is a coercive take-it-or-leave-it offer that disregards the fiduciary duties trustees and others have to their institutions and stakeholders. It will divert funds from a university’s core academic mission in favor of big-time sports entertainment.”

This article originally appeared on USA TODAY: NCAA settlement allowing revenue sharing challenged by FCS school