Are University Athletes About to Earn a Big Payday?


The other shoe has dropped for the N.C.A.A.: That college sports association just agreed to a $2.8 billion class-action settlement that, if approved by a judge in California, would pay student athletes after a century of deeming them amateurs.

It would be the latest step in the N.C.A.A. and its member institutions allowing athletes to make money from sports programs that have made millions for their schools. But experts worry that this latest shift will still create losers — especially schools that don’t have big football or basketball programs.

The proposed settlement has several components:

  • Athletes would be entitled to $2.8 billion in damages over a 10-year period. It’s essentially back pay for name, image and licensing revenue they would have been entitled to before the N.C.A.A. allowed such payouts three years ago.

  • Starting in the fall of 2025, schools could have about $20 million a year to pay their student athletes. How the schools distribute that money would be left up to them.

The N.C.A.A. is hoping to avoid an even bigger hit. Legal experts say the association and the conferences that were named as defendants in the class-action antitrust lawsuit — the Big Ten, Southeastern, Atlantic Coast, Big 12 and Pac-12 — could have faced having to pay $4 billion in damages.

The writing was perhaps on the wall. The N.C.A.A. already allowed so-called N.I.L. payments, giving student athletes a big stream of revenue. And in March, the Dartmouth men’s basketball team voted to unionize, adding potentially more pressure on universities to pay athletes.

Skeptics worry about the potential for unfairness. Will the money go primarily to men’s football and basketball programs, which generate the vast majority of college sports revenue? Will Title IX apply, meaning will the money be split equally between male and female athletes?

Schools that don’t participate in the big football conferences worry that they’re essentially subsidizing the settlement. The 27 Division I conferences that aren’t named in the lawsuit would be required to pay $990 million (through N.C.A.A. distributions from the men’s basketball tournament) over a 10-year period.)

“It feels like the N.C.A.A. is bailing out the biggest spenders, and conferences like ours are paying for the majority of the settlement,” Robin Harris, executive director of the Ivy League, told The Times.

It’s not a done deal. The federal judge overseeing the class-action lawsuit must still approve the settlement. And the N.C.A.A. and some of its members are still pressuring Congress to provide an antitrust exemption, pre-empting a patchwork of state laws and officially declaring that athletes aren’t employees.

The S.E.C. approves another crypto E.T.F. In a major victory for the industry, the agency on Thursday said it would allow the creation of exchange-traded funds tied to Ether, the second-biggest crypto token. (The biggest, Bitcoin, soared in price after the agency approved Bitcoin-centered E.T.F.s in January.) Elsewhere, the crypto exchange Coinbase lost a Supreme Court case that legal watchers saw as bolstering consumer protections around volatile cryptocurrencies.

James Gorman will step down as Morgan Stanley’s chairman this year. Gorman, 65, made the announcement on Thursday, capping his run at the Wall Street firm that he took over after the global financial crisis. Ted Pick, who succeeded him as C.E.O. in January, is expected to also add the role of chairman.

Senate Democrats open an investigation into Donald Trump’s courtship of oil executives. The lawmakers will zero in on a Mar-a-Lago fund-raising event last month, at which Trump asked oil and gas executives to donate $1 billion to his campaign. In exchange, the former president said he would cancel the Biden administration’s climate regulations if he were to win office.

Business leaders, tech researchers and investors have converged on Paris for VivaTech, an annual deal-making and schmooze-fest that ends on Saturday.

Military officials have joined the throngs in the Porte de Versailles exhibition center. Their mission: to scout out potential alliances with artificial intelligence start-ups, Vivienne Walt reports for DealBook.

With two wars on its doorstep, Europe is looking to A.I. to beef up security. In March, France’s Armed Forces Ministry, which is occupying a large space in the main hall, opened an A.I. agency that’s run by Bertrand Rondepierre, a former Google DeepMind project manager in Paris. The agency has an annual budget of €300 million ($324 million) to incubate military technology, some of which was on display this week.

More than 2,600 deal makers are present at VivaTech, including Sequoia Capital and KKR. There’s an investors-only lounge in the hall, sponsored by Microsoft, where hopeful start-up founders can book time with prospective backers.

Many of the start-up leaders at the conference have affixed dollar signs on their stands, signaling they want to talk deals.

Defense is a big discussion point. Tech companies from around the world described to DealBook how their A.I. applications were catching the eye of military brass:

  • Cognixion, a Santa Barbara, Calif.-based neurotech start-up with $20 million in seed funding, said its A.I. brain-data headsets, designed for disabled people, are being tested for battle, too. “There are people doing military simulations out in the forest and desert” with the technology, Andreas Forsland, its C.E.O. and founder, said.

  • LuxCarta, a start-up in Nice that’s partly funded by the French military, is using A.I. to create maps of combat zones. The maps update in real-time and are used to prepare troops for missions, said Vincent Madelain, the company’s business development manager.

French officials hope the investment boom will revive Europe’s tech standing. “We lost the web and the tech battle at the beginning of the century,” Laurent Saint-Martin, the C.E.O. of Business France, a semi-governmental agency promoting foreign investment, told DealBook. “We don’t want to do the same thing for the next one, which is A.I. and quantum.”


The reverberations from OpenAI’s dispute with Scarlett Johansson over one of the new voices for ChatGPT continue to ripple through the tech and entertainment worlds.

The disagreement underscores Hollywood’s fears about the rise of artificial intelligence, as Silicon Valley courts the content industry.

The Wall Street Journal reports on some of the backstory behind the fight, which included Bryan Lourd, Scarlett Johansson’s agent at Creative Artists Agency, and Sam Altman, OpenAI’s C.E.O. Here’s what The Journal says happened after Lourd and Johansson first heard the voice, which the company named Sky, and after Altman repeatedly — and unsuccessfully — asked the actress to lend her voice to the ChatGPT project:

When Lourd called Altman, the power agent said it sounded like the tool had been trained on Johansson’s voice, according to people familiar with the interaction. He asked for an apology and for the voice to be removed. OpenAI has said the Sky voice was not trained on Johansson.

Days went by without a resolution. Johansson assembled a legal team that included John Berlinski, who often represents talent in contract disputes, and worked with her three years ago on a legal battle with Walt Disney over her salary in the movie “Black Widow” that the two sides eventually settled.

On May 15, they sent a letter asking that OpenAI stop using the voice and offer transparency about its origins. The tech company, through lawyers, offered the name of the voice-over casting directors that they’d worked with, but not the name of the actor hired, the people said.

The incident came as A.I. companies have been courting Hollywood. Disney has been holding talks with Microsoft (OpenAI’s biggest partner and investor) about an internal generative A.I. tool, The Journal reports. OpenAI, Alphabet and Meta have also sought agreements with Hollywood studios to license their content for A.I. tools, according to Bloomberg.

For media companies, A.I. companies offer tools that can help them speed up content creation — and save money.

But entertainment talent has been wary of the technology, fearful that it will be used to replace them, potentially without their consent. It was a major point of contention in the strikes by writers and actors last year, and is driving legislation like the NO FAKES Act in Congress and the ELVIS Act in Tennessee.

  • In related reading: Do Silicon Valley institutions like Y Combinator, the start-up incubator that Altman once led, encourage unsavory business practices? The investor Roger McNamee thinks so.


Shares in Live Nation tumbled nearly 8 percent on Thursday after the Justice Department and 29 states sued the $23 billion events colossus that owns Ticketmaster, calling for its breakup.

It’s the latest in a string of antitrust cases brought by the Biden administration, challenging the dominance of companies in Big Tech and beyond.

The Justice Department says Live Nation operates the biggest monopoly in live events, and it plans to cite potentially incriminating emails from Michael Rapino, Live Nation’s C.E.O.

“It is time for fans and artists to stop paying the price for Live Nation’s monopoly,” Attorney General Merrick Garland said at a news conference on Thursday, adding, “The American people are ready for it.”

Here are some of the big numbers to consider in the case:

  • Live Nation owns, operates, and/or has exclusive booking rights in 373 venues globally and more than 60 percent of the top 100 U.S. amphitheaters. No other U.S. company “owns more than a handful of amphitheaters,” according to the complaint.

  • Through Ticketmaster, Live Nation controls roughly 80 percent of major concert venues’ ticketing business, plus a large share of the resales market.

  • In Live Nation’s defense: The Justice Department notes that the “face values of tickets are typically set or approved by artists,” an acknowledgment the company was quick to seize upon. Live Nation said it takes a 5 percent commission on ticket sales, which it says is lower than the booking fees levied by Airbnb and Uber as well as the download commissions charged by Apple’s App Store.

Deals

  • In Elon Musk news: His A.I. start-up, xAI, has secured funding from Andreessen Horowitz, Sequoia and Tribe; and SpaceX is reportedly considering a tender offer that would value the company at roughly $200 billion, up from $180 billion in December. (FT, Bloomberg)

  • The private equity firm Hg has agreed to buy AuditBoard, a cloud-based risk and compliance computing platform, in a deal valued at more than $3 billion. (Bloomberg)

  • A blast from the past: Atari has acquired Intellivision, its one-time fierce rival in console gaming. (The Verge)

Policy

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