Two prominent U.S. law firms stand to make a substantial financial gain from a landmark $2.7 billion settlement with the NCAA, which marks a historic shift allowing student athletes to receive compensation. The pivotal moment now hinges on convincing a judge to approve both the groundbreaking settlement and the complex fee structure proposed by the firms.
The settlement, intended to address antitrust lawsuits challenging the NCAA’s long-standing ban on athlete payments, covers issues such as compensation for commercial use of athletes’ names, images, and likenesses, as well as payments related to athletic and academic achievements.
Law firms Hagens Berman Sobol Shapiro and Winston & Strawn, the key players in the litigation, have presented the settlement’s value as exceeding $20 billion, largely based on anticipated future earnings of student athletes. The firms’ potential fee could see a difference of $200 million or more depending on whether they secure a portion of these future payments.
The attorneys leading the charge, Steve Berman of Hagens Berman and Jeffrey Kessler of Winston & Strawn, have indicated they will request an initial $20 million payment for their work. This sum is to be evenly split between the firms. They also plan to seek up to $495.2 million, which would be calculated as a percentage of the settlement funds allocated over the next decade, including a 20% share of $1.976 billion earmarked for athletes’ name, image, and likeness compensation.
Adding a novel twist to their fee request, the lawyers aim to claim an annual stake in the revenue generated by NCAA schools from payments to athletes. They project this revenue pool could be around $20 billion over ten years, potentially leading to legal fees as high as $250 million.
Despite the large figures, Berman and Kessler defend their request as reasonable given the case’s scale and significance. Kessler argued that the fees are modest relative to the case law and benefits to the class and emphasized that each yearly fee installment would require judicial approval.
The settlement has faced objections from some student groups, who argue it favors male athletes and question the upfront $20 million fee. These challengers worry that the fee structure might have involved concessions by class counsel. Meanwhile, the firms are focused on addressing these concerns and obtaining preliminary approval for the settlement.
In related legal fee news, the Delaware Supreme Court recently upheld a $267 million fee award for five law firms in a $1 billion Dell Technologies shareholder settlement. Additionally, a proposed $50 million legal fee has been sought in a settlement with StarKist and its affiliates.
