Potential $4.2 Billion Lawsuit For NIL Back Pay Could End The NCAA ... But Then What?

What people have been clamoring for over decades, but especially in recent years, could really be happening within two years.

The end of the NCAA may be near. Ding-Dong, the so-called wicked witch could be dead.

NCAA national office in Indianapolis, Indiana (Photo by C. Morgan Engel/Getty Images)

Courtrooms will be stormed. Lawyers will be heroes. The NCAA headquarters in Indianapolis may burn, or at least feature a large For Lease sign possibly.

They'll play the 10,000 Maniacs' 1992 smash "Candy Everybody Wants" over and over again. "Give 'em what they want." Interestingly, though, that is a song about Americans craving sex and violence on TV. So be careful wishing for the NCAA's demise.

NCAA Lost 2 NIL-Related Trials That Led To Pay-For-Play

They've been lawyering up against the NCAA for decades now, and the NCAA's lawyers keep losing and losing. They lost the Ed O'Bannon (UCLA basketball player) trial in 2014 and the Shawne Alston (West Virginia running back) trial in 2019. Both were Name, Image & Likeness cases.

Those NCAA losses in court set the stage for new state NIL laws entering the the books by the summer of 2021. Those made it legal for student-athletes to be paid for their Name, Image & Likeness in addition to the free scholarships and other various benefits. Many top athletes are making millions now through NIL. Through socialism-laden collectives, even student-athletes riding the bench are getting paid now. Back in the day when pay-for-play was cheating, there was better capitalism. For the most part, only the great players got paid in a more fiscally responsible system.

And also as of 2021, everybody can switch schools without having to sit out a year. That's thanks to the new NCAA Transfer Portal, brought on by the fear of more lawsuits.

But some collectives have already gone bankrupt in this Wild West lawlessness brought to you by too many lawyers.

Congress has held 10 meetings since the summer to try to better regulate and curtail the corruption of NIL, but they're not close.

And the Wild West just got wilder last Friday.

NCAA Now Facing NIL Back Pay Lawsuits

Those student-athletes who missed some or all of the NIL money want their money, too, in back pay. In an antitrust lawsuit, three of them sued the NCAA in 2020 for their NIL back pay along with a piece of the lucrative television pie to the tune of $1.4 billion. The back pay is limited to 2016 going forward because of antitrust statute of limitations laws.

The three suing the NCAA are Arizona State swimmer Grant House, former Illinois football player Tymir Oliver, and current TCU women's basketball player Sedona Prince. She played at Texas in 2021 and Oregon in 2022. The trio also requested class certification in the lawsuit for the coveted class action lawsuit status, which gives the plaintiffs a better chance at winning and a larger overall prize.

Well, as many as 15,000 student-athletes across the land could now join the above three. This is because federal judge Claudia Wilken of the Northern District of California on Friday granted class action status in the damages portion of the antitrust lawsuit.

The NCAA had been trying to settle with Wilken, but didn't like the asking price. So, now, if the NCAA loses the case, an estimated 15,000 mostly former student-athletes could be eligible to receive damages from the NCAA. The trial date is set for January of 2025, if not sooner.

NCAA facing damages of more than $4 billion in NIL back pay as well as portions of estimated revenue from various televised events like the Final Four. (Photo by Streeter Lecka/Getty Images)

Damages triple by class action law, which means the NCAA could have to come up with $4.2 billion.

"Well, certainly wasn’t good news," SEC commissioner Greg Sankey said on Saturday at the LSU-Alabama game of the decision by Wilken. "We're going to look into it. Work with our colleague conferences and the NCAA."

The original $1.4 billion figure before the treble addition is an estimation by two sports economics experts - University of San Francisco sports management professor Daniel Rascher and sports media consultant Ed Desser. Rascher has been an oft-tapped expert witness at previous antitrust cases against the NCAA, including NCAA landmark losses in the O'Bannon and Alston trials.

"The NCAA disagrees with this ruling as NIL is highly specific in terms of its value to individual athletes," NCAA spokesperson Saquandra Heath said in a statement Friday. "Rather than being common or typical across a wide group of plaintiffs as antitrust law requires for class-action status to be granted in a case."

Federal Judge Claudia Wilken Still NCAA's Worst Nightmare

Wilken is familiar with Rascher and the NCAA. She ruled on both the O'Bannon and Alston cases. In other words, she's Clint Eastwood, and she's attempting to hang the NCAA high.

Sports attorney and NIL expert Darren Heitner sees the NCAA's end of days because of this class action lawsuit.

"A $4.2 billion settlement or close to it would put the NCAA in an extremely difficult position, given that its net assets usually on an annual basis are somewhere between $4-500 million," Heitner said in a phone interview with OutKick on Monday.

The NCAA reported assets of $458 million in 2022, according to USA TODAY.

"That’s a lot of money, don’t get me wrong, but it pales in comparison to the potential size of the judgment," Heitner said. "I don’t know how an association that doesn’t have liquidity survives a judgment like that. Unless a settlement is reached thereafter, which includes a payment (installment) plan. Otherwise, it would appear on the surface that the association’s liabilities would far exceed its assets."

The NCAA has insurance. That helped it dearly during its financial losses during the COVID-19 crisis in 2020 and '21. But no insurance will be able to significantly help the NCAA should it lose this case.

"If the NCAA were to lose such a case and have such exorbitant damages on the line, you would expect the association to appeal," Heitner said. "And perhaps the damages would be stayed (suspended) in that process, pending appeal."

The appeal process and suspended liability for the damages could stretch out many years. The NCAA has a history of digging in for trials to their end, but lately that has meant losses.

NCAA May Have Missed Its Chance To Settle

"I don’t expect the NCAA to settle," Baton Rouge attorney Trey Tumminello of Taylor, Porter, Brooks & Phillips told OutKick Monday. He has worked with NIL sponsors and on NCAA-related cases.

"But that’s just a guess," he said. "Nothing of substance has been ruled on yet. For a monetary judgment like this, I would expect they would go through trial."

The NCAA may have missed the boat by not settling with the three plaintiffs before Wilken granted class action status.

"Once the class is certified, now those plaintiffs are able to pool their resources, and they have more negotiating power in any settlement than any one of them would’ve had on their own," Tumminello said. "So, it makes it more likely for an advantageous settlement in favor of the class."

The NCAA could be in for a titanic struggle to survive.

"The case is absolutely going to proceed," Heitner said. "The plaintiffs' lawyers are coming from a position of much more power and leverage. So, the likelihood of settlement decreases now because the demand will be exceptionally higher."

Sankey insists the game is not over. Situations like this are why the NCAA has been trying for some time now to get Congress to grant it antitrust protection, and lately an NIL national standard. What is in place now is a hodge-podge of differing state laws that are self-absorbed and aimed to help whatever State U.

"The story hasn't been written yet," he said. "Hasn't been written yet."

But it may be past deadline. The NCAA not settling before Wilken's move on Friday could mean the NCAA may have settled for death.

"The problem with organizations like the NCAA deciding to fight until the last dog is dead is that sometimes they end up being the last dog," sports attorney Thomas Mars told CBS Sports.

It may be time, in USC quarterback Caleb Williams' words, for the NCAA "to just cuddle with its dog and watch some shows."

Or the NCAA may be down to a desperate, Shakespearean strategy: "Let's kill all the lawyers."

What Would Replace The NCAA?

Funny thing about all those folks who hate the NCAA is that they rarely say what should replace the NCAA. When a local police force is found to be corrupt, the state police or the FBI come in. There is no other NCAA-like entity.

The conferences? We are seeing how weak the Big Ten appears to be amid the Michigan sign stealing scandal. Strong discipline by the Big Ten against Michigan would hurt the Big Ten, so why would it hurt itself? Why would any conference hurt itself?

The College Football Playoff selection committee has also put its head in the sand.

Congress? Please.

The NCAA can't die. It just desperately needs to be fixed. It could start with better lawyers.

(NOTE: Please share your comments on this column with Glenn Guilbeau on X @LSUBeatTweet or via email at glenn.guilbeau@outkick.com.)