By: Mike Davis
What was the ruling?
A regional director of the National Labor Relations Board ruled that college athletes meet the definition of an employee, and an athletic scholarship counts as compensation. This paves the way in allowing student-athletes to from a union.
Should this ruling come as a shock?
No. The NCAA should have known this was coming for quite awhile. An academic research paper by the Washington Law Review Association in 2006 stated that a scholarship counts as compensation, student-athletes qualify as employees, and the NCAA coined the term “student-athlete” so they could deny players employee status.
This paper mirrors what several legal and labor experts have been saying for over a decade about student-athletes.
How will this impact College Sports?
This ruling does not change anything in the immediate future. This case will continue to be fought through appeals by both sides for quite sometime. The next step is for the Northwestern players to vote on whether or not to form a union.
What happens if the players form a union?
The players can now leverage their way for more benefits. This includes better medical care, player stipends to cover full cost of attendance, or even direct paying of players. The impact of this case depends on how far the players are willing to go with their demands. This could be a minor bump in the road for the status quo, or it could be the biggest game changer since conferences won the right to negotiate their own television contracts in 1984.
What does this mean for the NCAA?
Over the last couple of years the NCAA has been slowly backed into the corner on the issue of paying players. This is just one of three major lawsuits, each of with has the potential to lead to the direct paying of players that the NCAA has to deal with right now.
This case is the first victory for those in opposition to the current student-athlete model. The NCAA so far has attempted to ignore and avoid this issue for quite some time. Now for the first time the NCAA will have to enter into a legitimate discussion and/or negotiation with their student-athletes on this subject and most likely will be forced to give into some of their demands.
What does this mean for scholarships?
The biggest part of this ruling is the precedent being set that a scholarship counts as compensation. This enters in the possibility of scholarships counting towards taxable income, something that would be disastrous for student-athletes. Student-athletes already struggle enough with cost of living expenses. Having the student-athletes on scholarship in any sport -whether field hockey, cross-country, or football- would add thousands of dollars a year in taxes that each student-athlete would have to pay.
The schools will be forced to do something to cover these tax costs or risk taking a big hit to their talent pool. The schools can compensate the players in the form of a stipend to cover these tax costs, but the problem is that not every school in the “Power Five” can afford to do that. The only real option is to lobby congress to give some sort of tax-exempt status to all college scholarships whether they are academic or athletic.
If scholarships become taxable will this change the competitive balance of college athletics?
If the taxing of scholarships issue cannot be resolved a schools cost of tuition will make or break their program. Most private schools will drop scholarships because their cost of tuition is much higher than public schools, meaning they won’t have a chance to land top recruiting classes. The state schools will see a reverse effect where the smaller state schools suddenly gain an advantage on the flagships.
For example in Louisiana schools like LA-Monroe, LA Tech, and LA-Lafayette could suddenly find themselves landing top recruits over LSU and Tulane due to their lower tuition cost. Schools like UCLA, Florida, and Texas will be able to soften the blow by offering in-state tuition to their lucrative in-state talent pools. While schools who do not have an abundance of in-state high school talent like Minnesota, Iowa, Nebraska, and Kansas will be devastated.
Can this lead to more conference realignment?
Absolutely. One of the critical outcomes of this case is that it only affects private schools because the federal labor agency does not have jurisdiction over public schools. This essentially means the private and public schools will be dealing with this issue separately and be subject to change under different timeframes. If the private institutions end up being forced to pay their players before their public counterparts, then there is the potential to see further conference realignment with the private schools aligning together in FBS. Or we could see the private groups drop down to an Ivy League no scholarships format until the issue is resolved to the point where all FBS schools are playing under the same set of rules and conditions.
Could this lead to schools dropping from FBS?
Every school will be faced with the decision of how far they are willing to go on this issue. Some schools may be willing to give in, others will be so repulsed by the concept of paying the players, players unions, etc. that they opt to deemphasize sports.
Former Northwestern President Henry Bienen stated, “If we got into collective bargaining situations, I would not take for granted that the Northwesterns of the world would continue to play Division I sports.”
This issue is indeed very real and the result of a buildup of private frustrations by university administrators. Their frustrations are the result of numerous changes impacting college football both currently and within the past couple of years. For some institutions this very well could be the final straw. From a university presidents perspective he/she could be thinking something along the lines of:
You know what, we had a nice run going for quite some time with big money athletics. But we are about to get hit by a tsunami and it is better for us to get out now while we are still ahead.
In some ways the business decision of doing so make sense. These schools are huge name brands and it would be better to make a change from the perception that they want to be on the right side of history, rather than because they are trying to save face. They also have tremendous resources as things stand now and it would be the most efficient to make changes when they have all the momentum on their side and riding high rather than while they are beaten down and having to shell out millions to student-athletes.
Are the players at fault here?
Looking at the reaction to this ruling it is apparent that the majority of fans disagree with what the players are doing here. People are mad that these guys already receive upwards of $50,000 in free tuition and now they are asking for more.
While the anger is understandable what people need to look at is the player safety aspect of the situation. There is currently a concussion epidemic in the NFL and we are naive if we believe that college athletics are immune to this problem. On top of that we have seen serious issues being raised about abuses of painkillers by university training staff at a number of schools in 2009. In 2011 twelve football players had to be hospitalized following “extremely strenuous offseason workouts.”
After taking all of this into account it is more than fair for the players to ask for a union to help look out for their safety. While their actions may lead to players being paid, that is not an excuse to overlook the larger issues at play here regarding safety. All these players have asked for so far is the right to form a union. We have not seen them demanding a salary or a percentage of TV revenues and anyone saying that money is their true motive is jumping to conclusions.
When I look at Northwestern I see a program and a group of players that have done more than enough to warrant the respect of football fans in general. In the last fifteen years this program has been a leader in GSR (graduation success rate). Former Northwestern quarterback Kain Colter took the leading role in this lawsuit despite being in the final year of his eligibility. Plenty of people seem willing to criticize these young men but what gets overlooked is that these guys are currently the textbook example of a true student-athlete and are fighting for the rights/safety of future college football players knowing they will not see the benefit of all their time and effort.
Does this mean we should blame the schools?
It is only a matter of time before a student-athlete uses this case to lead the way for players being paid. Until that happens the only players that should be blamed are the ones who decide to file a lawsuit or use a union to leverage exactly that.
In the meantime we have to focus on how we got here and the reality is that it was indeed the schools that put themselves in this situation. There is a reason why we are not seeing the Division II, Division III, or even FCS getting boggled up with so many lawsuits over this issue.
It was the schools that accelerated spending by the millions, particularly over the last 15 years. College football has essentially become a de facto pro league with pro style stadiums, and pro style practice facilities. Oregon just built a 68 million dollar football center that would put some NFL facilities to shame. The schools were the ones who ultimately put more emphasis on the athlete and less on the student over the last 3 decades. The average football player spends 41.6 hours per week on football and 38.2 hours on academics.
So when players see their coaches getting paid millions, their jersey number being sold for over $100, and having to commit more time to college football than to academics, should we really be surprised that they are now asking for a cut?
Even putting all of that aside, the schools had their “Waterloo moment” when they handed out scholarships on a yearly basis requiring them to be renewed at the end of the year rather than guaranteeing the scholarship throughout a student-athlete’s career.
By doing this the schools set the precedent that scholarships were tied directly to athletic performance and that was a key reason why the NRLB ruled the way it did. The NCAA had numerous options to reform this issue and they dragged their feet every time.
So where do we go from here?
We don’t know. It all comes down to what the players decide to do with their collectively bargaining power.
The 1984 decision was a total game changer for college football when the conferences won the right to negotiate their own television contracts. Back then people knew that it meant change but it wasn’t widely understood just how much change would come. What happened in 1984 set the stage for massive conference realignment and a massive influx of cash into the system (for 1984 standards at least).
Today we could very well see major change, but it all comes down to how the players conduct themselves, how the schools conduct themselves, what lawmakers/judges decide to do, and the timeframe it takes for these changes to occur.