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NCAA Restricted Earnings Case Still Not Settled
SAN ANTONIO - One of the hot topics at the January NCAA Convention was the restricted earnings case, which the NCAA reported was still not settled.
The NCAA News stated that Elsa Kircher Cole, NCAA general counsel, said, "Our last offer to resolve the case was $44 million. The plaintiffs have said they will not settle for less than $58 million or $59 million,"said Cole. "We can't talk with the plaintiffs directly to explain why we think this is a fair number and about the risk that the judgment could be thrown out at the 10th Circuit. "The $44 million more than compensates for the actual injury. This doubles what the jury awarded," Cole said. "We thought this was more than fair."
Another item discussed was how to assess damages to the membership if payment in the case is ultimately required. Also addressed were the reasons the Division I Board of Directors and NCAA Executive Committee decided to put into escrow an expected $10 million revenue distribution rather than distribute those funds to the membership.
A Division I Budget Subcommittee, chaired by V. Lane Rawlins of the University of Memphis, has been appointed to consider restricted-earnings budget implications within the overall budget strategies.
"The true range of settlement numbers is significant," The NCAA News reported Rawlins as saying. "We've decided the worst way to go about this is an ad hoc manner. We need to approach this in a budgetary way. The restricted-earnings settlement cannot happen without some reductions." Equal-share and pro-rata formulas for assessment of Division I members have been discussed if a payment in the case is ultimately required.
As the NCAA prepares financially for a possible settlement, the Board of Directors and Executive Committee in October delayed the return of $10 million in the current budget to institutions and conferences. The funds are being retained in escrow for eventual use in a settlement.
The NCAA office staff and NCAA committee members also will reduce spending, including the elimination of first-class travel. The Board of Directors also took the following expenditure-saving action: