Two U.S. law firms are poised to earn hundreds of millions of dollars after negotiating a $2.7 billion settlement with the National Collegiate Athletic Association that would allow student athletes to be paid for the first time.
But first they have to persuade a judge to approve the landmark deal -- and the unusual, multifaceted fee structure they proposed.
The firms have until Friday to respond to groups of students who have already objected to the July settlement, and more litigation is likely once they submit more details of their fee request.
The firms that spearheaded the litigation, Hagens Berman Sobol Shapiro and Winston & Strawn, told U.S. District Judge Claudia Wilken in Oakland, California that the settlement's total value is over $20 billion, based largely on student athletes' future earnings.
Whether they can claim a share of those future payments, and how much, could mean a difference of $200 million or more for the firms.
THE FEES
The plaintiffs' lawyers, led by Steve Berman of Hagens Berman and Winston's Jeffrey Kessler, said in court papers that they've sunk more than 72,000 hours into the cases since 2020.
To start, they told Wilken they will ask for a $20 million upfront payment for their work. It would be split evenly between the firms, Berman told Reuters.
They said they will also request up to $495.2 million based on a percentage of settlement funds the NCAA agreed to pay over the next decade, including 20% of $1.976 billion slated for college athletes who were denied compensation for the use of their names, images, and likenesses and for their athletic service.
The most novel part of their fee request would also allow the lawyers to seek an annual stake in the compensation that schools would now be cleared to pay student athletes, based on 0.75% to 1.25% of the NCAA schools' sporting revenues over 10 years.
The plaintiffs estimated that pool to be worth around $20 billion over a decade, leading to potential aggregate legal fees as high as $250 million.
Both Berman and Kessler said the ongoing fees they envision are fair given the size and historic nature of the settlement.
"Frankly, I think it is an extremely modest request given the case law and the value to the class," Kessler said. He noted each yearly fee installment would require court approval.
An NCAA spokesperson did not immediately respond to a request for comment on the fees. The organization last month said the settlement provided a sustainable path to increased benefits for student athletes.
Asked about the fee provisions, Berman said they are focused on responding to the objections and winning the judge's preliminary settlement approval for now.
"My parents always taught me don’t count your chickens before they hatch," Berman said in an email.
One of the groups challenging the proposed NCAA settlement said in court papers that the deal was biased toward male athletes. The group also objected to the plaintiffs firms' $20 million upfront fee request, describing it as a "classic 'clear sailing provision' that raises the question what class counsel bargained away to get it."
The MoloLamken attorneys who filed that objection did not immediately respond to a request for comment. The other pending objections argued the settlement would unfairly insulate the NCAA from separate antitrust lawsuits.
Kessler called the objection to the $20 million "insulting," and said it was "only negotiated after all of the other terms of the settlement were reached."
"We stand by our record for what we’ve done for athletes," he said.
- In other legal fee news, the Delaware Supreme Court on Wednesday upheld a $267 million fee award for five law firms that obtained a $1 billion settlement for Dell Technologies shareholders.
The court ruled that the near-record Delaware award was not an improper windfall to the law firms who represented the plaintiffs -- Labaton Sucharow; Quinn Emanuel Urquhart & Sullivan; Andrews & Springer; Robbins Geller Rudman & Dowd; and Friedman Oster & Tejtel.
- Attorneys who negotiated a proposed settlement with seafood giant StarKist, its parent Dongwon Industries and private equity firm Lion Capital said Tuesday they will seek just over $50 million in legal fees.
The proposed fee award for law firm Wolf Haldenstein Adler Freeman & Herz would take into account two class action settlements -- Tuesday's proposed deal, worth $136 million, and a 2022 deal with Chicken of the Sea and its parent Thai Union Group, worth $16 million.
(Legal Fee Tracker is a weekly feature exploring attorney compensation awards and disputes in class actions, bankruptcies and other matters. Please send tips or suggestions to [email protected].)
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(Additional reporting by Mike Scarcella)
