Gov. Greg Gianforte said Tuesday a proposed $2.8 billion NCAA settlement with student-athletes over the use of their Name, Image and Likeness is unfair to more rural states such as Montana and “will have a devastating impact” on their athletic programs.
If approved by a judge, the settlement would secure damages from the National Collegiate Athletic Association for college athletes previously denied compensation for use of their NIL and their athletic performances, according to a court filing outlining the agreement.
Earlier this month, the South Dakota Board of Regents filed a lawsuit alleging the settlement unfairly favors large universities and disfavors female competitors, according to the South Dakota Searchlight.
Representing the Regents, South Dakota Attorney General Marty Jackley estimated the state’s largest two public universities would lose around $1 million in NCAA revenue each year under the settlement.
Montana Attorney General Austin Knudsen did not respond to a request for comment through an email Tuesday to his spokespeople.
However, the settlement would cost Montana State University and the University of Montana together an estimated $4.4 million over 10 years, the Daily Montanan reports. UM Athletic Director Kent Haslam said the initial projection for Missoula is a loss of $200,000 a year for the decade.
“It’s real money. We budget for that,” Haslam said.
In the lawsuits against the NCAA, the student-athletes had argued the NCAA was unjustly profiting from their NILs, and they challenged the rules that prohibited them from receiving anything of value in exchange for their commercial use.
In the filing, lawyers for the athletes characterize the settlement as “revolutionary” and one that will have “a profoundly positive impact” on college athletes who play Division I sports.
“If approved, the settlement will result in one of the largest payouts in an antitrust settlement in U.S. history and lead to pro-competitive changes benefitting college athletes,” said the motion filed with the proposed settlement.
The settlement is pending in court. Earlier this month, a judge in U.S. District Court of Northern California put the case on hold and asked the parties to take a closer look at terms related to third-party payers, or boosters, according to CNN.
In a letter Tuesday, however, Gianforte joined four other governors to express concerns to NCAA President Charlie Baker and the Board of Governors that the settlement “unduly burdens small and medium-sized college athletic programs to the benefit of larger athletic programs.”
“We request the NCAA restructure the settlement to avoid the current agreement’s devastating financial impact on small athletic programs in more rural states,” said the letter from Gianforte and the Republican governors of South Dakota, Idaho, Wyoming and North Dakota.
Only the “Power Five conferences,” the most prominent, were parties to the lawsuit and participated in settlement negotiations, the letter said. The UM Grizzlies and Montana State University Bobcats are part of the Big Sky Conference.
But the settlement would put all programs in every state, including Montana, “on the hook for payment,” including nearly $1 billion owed from those outside the Power Five, the letter said.
“This may not seem like much to larger athletic programs, but to the student-athletes in our states, it is a significant hit to their programs,” the letter said.
In South Dakota, Attorney General Jackley filed the lawsuit against the NCAA on behalf of the Regents, and Jackley said it was possible other states would join, according to the South Dakota Searchlight.
“I can tell you that the complaint we filed today has been provided to other attorneys general, and I’ve been on the phone with other attorneys general all week,” Jackley told the Searchlight in a Sept. 10 story.
A spokesperson for the South Dakota Attorney General’s Office said Tuesday that Jackley has talked with attorneys general from other states, including Montana, although so far, South Dakota is the only plaintiff in the case.
In the Searchlight story, however, Jackley said smaller schools will take a hit regardless of the outcome of the settlement because of the NCAA’s payment structure and effects on smaller conferences.
In a phone call, UM Athletic Director Haslam said lawsuits related to NIL have been playing out in court for years, and in general, the settlement is positive for college athletics.
“It will bring stability and will bring some clarity to the rules and some closure on some of the litigation that seems to weigh us down,” Haslam said.
However, he said it would be costly for UM: “The frustration lies more in how the settlement is being paid for by the Division I members.”
As proposed, it would mean the Missoula university would lose $2 million, or $200,000 a year for 10 years, in reduced NCAA distributions, he said. He said that’s “significant” money in UM’s $23 million budget.
“It’s going to have to be made through increased ticket sales or institutional support,” Haslam said. “ … We’re going to have to figure out a way to fill that hole or make the cuts that we need to make.”
Generally, he said students at UM aren’t the ones who will benefit from the back pay; rather, it’s athletes at larger institutions and larger conferences who will benefit. Haslam said he understands there are benefits to being Division I, and also times “people have to rally together to help solve these problems.”
“That’s where I appreciate the governors of these five states saying this impacts us in a big way,” Haslam said. “We appreciate you rethinking this or looking at how you pay these back damages.”
MSU estimated its reduction at $235,000 a year for the decade. In an email, Galen Hollenbaugh for the Montana University System said he appreciates the support from the governor.
“We agree that the (House v. NCAA) settlement costs disproportionately fell on small schools that were not involved in the initial litigation,” Hollenbaugh said in an email. “We hope that the NCAA will take the concerns brought forward by these Governors into consideration.”
The NCAA could not be reached for comment Tuesday afternoon. However, its commissioners earlier praised the settlement in a statement.
“This is another important step in the ongoing effort to provide increased benefits to student-athletes while creating a stable and sustainable model for the future of college sports,” said the commissioners of the five conferences and the NCAA president.
The court filing said settlement discussions began in November 2022 “with the assistance of nationally prominent mediator Professor Eric D. Green, who has significant experience mediating disputes involving challenges to the NCAA’s compensation rules.”
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