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COACHES AWARDED $67M IN DAMAGES AFTER RULING AGAINST NCAA
Published May 5, 1998
A federal jury in Kansas City yesterday awarded more than 1,900 coaches "nearly" $22.3M in damages from the NCAA, "a total that will automatically be tripled," according to Steve Rock of the K.C. STAR. The $67M "blow" is the largest in the history of the NCAA and its member institutions. NCAA General Counsel Elsa Cole said that NCAA officials will determine shortly "what their next legal maneuver will be," adding that she would recommend an appeal to the 10th U.S. Circuit of Appeals in Denver. Cole said that the NCAA may "[u]ltimately" ask the U.S. Supreme Court to "look at both the liability and the damage amount" (K.C. STAR, 5/5). CASE HISTORY: In May '95, the NCAA was found in violation of federal anti-trust laws due to its "restricted- earnings" rule, which capped the annual salaries of "lower- end" coaches at $16,000. Yesterday's proceedings "were the culmination" of a month-long damage phase stemming from that decision. Three classes of plaintiffs -- one representing men's basketball coaches, one representing baseball coaches and one representing coaches in all other sports -- filed lawsuits, with their lawyers arguing that the NCAA owed more than 1,900 coaches $30M in damages. The NCAA argued that "just 59 coaches were hurt by less than" $900,000. The jury "determined that damages did apply to all classes," and awarded $11.2M to the basketball coaches, $1.6M to baseball coaches, and $9.5M to coaches in the other sports. Under anti-trust law, those damage awards are automatically tripled (K.C. STAR, 5/5). The appeal process "could take two years," and coaches will not receive any damages until that process is complete (Mark Asher, WASHINGTON POST, 5/5). NOTES & QUOTES: Cole said that if the decision stands and back pay is issued, the NCAA "would be distributing money that normally would go to" member schools, adding that since the NCAA "generally had less than" $10M in a reserve fund, member schools may "have to contribute" to pay the settlement (Raleigh NEWS & OBSERVER, 5/5). NCAA Div. I Management Council Member Arthur Cooper: "It would be great to be able to say that we were just misadvised. But I don't know that that's really true. The concept of the rule was just flawed" (K.C. STAR, 5/5). Pac-10 Commissioner Tom Hansen: "This isn't an award against the NCAA. This is an award against members of the NCAA and, eventually, the student athletes" (K.C. STAR, 5/5). Patty Viverito, Associate Commissioner of the Missouri Valley Conference: "It's beyond my comprehension how we're going to be able to absorb this without changing the way we do business" (CHARLOTTE OBSERVER, 5/5). Big Ten Commissioner Jim Delany called the ruling a "pretty serious financial hit" for the NCAA (USA TODAY, 5/5)....The decision gained front-page news in the K.C. STAR, and garnered front-page treatment in this morning's N.Y. TIMES (THE DAILY)....In K.C., Rock examines the ruling in a sidebar under the header "Why Did NCAA Let It Get To This Point?" Rock calls it an "historic setback" for the NCAA, and adds "[n]o settlement would have been sufficient, from the coaches' perspective, without repealing the restricted-earnings rule. And rescinding an NCAA rule was a laborious and cumbersome process" (K.C. STAR, 5/5).