Meanwhile, down to the wire on O'Bannon v. NCAA

[swood1000]

About a year ago the NCAA was sued and lost in the Federal District Court and was ordered, among other things, to allow players to be paid for use of their names, images and likenesses in addition to cost of attendance (and to pay $45,000,000 (http://www.usatoday.com/story/sports/college/2015/07/14/ed-o-bannon-ncaa-likeness-case-attorney-fees/30121059/) to the lawyers on the other side). The NCAA appealed to the 9th Circuit Court of Appeals, which shows the activity in the case here (http://www.ca9.uscourts.gov/content/view.php?pk_id=0000000757). There's been nothing since March. The parties have agreed that the court's order will begin to go into effect on August 1, 2015 (http://www.cbssports.com/collegefootball/writer/jon-solomon/24656087/ncaa-wants-obannon-judge-to-clarify-when-payments-can-start), when written offer letters can first be sent to players who will enroll after July 1, 2016. It would be surprising if we didn't hear something from the Court of Appeals in the next two weeks.

[MarkD83]

$45,000,000. Sounds like the amount they could fine unc

[swood1000]

$45,000,000. Sounds like the amount they could fine unc
Another incentive to come down hard.

[swood1000]

The basic facts of O'Bannon can be found here (http://chronicle.com/article/How-the-OBannon-Ruling-Could/148339/). According to the ruling, colleges could set aside as much as $5,000 per year each for football and men’s-basketball players. Players could tap into the money after completing their eligibility. In its appeal the NCAA uses a figure of about $7,500, the additional $2,500 being for an extra stipend to cover the full cost of attendance. Apparently, schools are not required to set aside the maximum but those who don't would clearly be at a competitive recruiting disadvantage. Maybe small Division I schools can't compete with the majors in recruiting now, but it will be even less so if they don't set aside the same amount.

[swood1000]

It would be surprising if we didn't hear something from the Court of Appeals in the next two weeks.
Especially since the Ninth Circuit Court of Appeals agreed to expedite the case because of the August 1 deadline. Otherwise, we would not even have had oral arguments yet (which were held in March).

[swood1000]

One of the issues in this case is whether "amateurism" has any clear meaning given the changes in the NCAA definition of this since the days when athletic scholarships were not permitted (as they are still not in the Ivy League). Is amateurism an identifiable concept or does it really just amount to whatever the NCAA's latest rule says it is?

Then the question concerns NCAA rules that clearly have the effect of reducing competition in recruiting by disallowing monetary incentives. Is the goal of "amateurism" sufficient to justify these restrictions? The trial court held that allowing universities to compete to the extent of setting aside as much as $5,000 per year in trust for each athlete, to be received after his eligibility is gone, would not negatively affect "amateurism." Others say that this would just be the beginning of a race to the bottom that will destroy the essence of college athletics.

Thoughts?

[Nosbleuatu]

The basic facts of O'Bannon can be found here (http://chronicle.com/article/How-the-OBannon-Ruling-Could/148339/). According to the ruling, colleges could set aside as much as $5,000 per year each for football and men’s-basketball players. Players could tap into the money after completing their eligibility. In its appeal the NCAA uses a figure of about $7,500, the additional $2,500 being for an extra stipend to cover the full cost of attendance. Apparently, schools are not required to set aside the maximum but those who don't would clearly be at a competitive recruiting disadvantage. Maybe small Division I schools can't compete with the majors in recruiting now, but it will be even less so if they don't set aside the same amount.

It's hard to see how the dollar amount would really have much impact on budgets for larger schools and conferences. I wonder if you might see smaller D1 conferences self impose a limit on what member institutions offer for each sport. It wouldn't help them compete with the big guys, but could maintain some equality amongst themselves.

[Indoor66]

It's hard to see how the dollar amount would really have much impact on budgets for larger schools and conferences. I wonder if you might see smaller D1 conferences self impose a limit on what member institutions offer for each sport. It wouldn't help them compete with the big guys, but could maintain some equality amongst themselves.

I'm not sure what constitutes "having an impact" but 100 football and basketball players = $500,000. That is real money to most programs.

[swood1000]

I'm not sure what constitutes "having an impact" but 100 football and basketball players = $500,000. That is real money to most programs.
As to whether schools can afford this, here are some statements from the side opposing the NCAA (http://cdn.ca9.uscourts.gov/datastore/general/2015/01/21/14-16601%20Answering%20Brief.pdf):

"Currently, each DI conference negotiates its own distinct broadcast agreement. Staurowsky estimated that the five largest conferences receive aggregate annual television revenue of $750 million. …The new DI FBS College Football Playoff, for example, directly negotiated a broadcast contract with ESPN that will yield approximately $600 million in annual revenue over the next 14 years. …Additionally, the NCAA has agreements with Turner Broadcasting and CBS to broadcast the DI men's basketball championships, known as "March Madness." In recent years, CBS and Turner Broadcasting paid the NCAA $700-$750 million annually for broadcast rights, and under an escalation clause that amount will increase over time. …Schools spend this substantial revenue on coaching salaries and lavish facilities. Rascher estimated that from 2005-11, basketball coaching pay in NCAA DI schools increased by 11.4% (as opposed to 1.6% for the NBA). His comparable figure for NCAA DI FBS coaches was 9.7% (as opposed to 4.5% for NFL coaches). …Between 1985-86 and 2009-10, salaries for full professors and presidents at 44 universities increased modestly, while coaching salaries increased by 650%. Sixteen of the 32 best-paid coaches in any sport, professional or otherwise, are DI basketball coaches. From 2006 to 2011, head football coaching salaries in major DI conferences grew from an average of $1.5 million to $2.5 million annually. Salaries for DI men's FBS football and basketball strength and conditioning coaches range from $125,000 to $325,000 and those for DI athletic directors average $500,000 annually. Staurowsky noted that since the mid-1990s, colleges have spent $15 billion on salaries of all types, with $6.4 billion of that (or almost 43%) devoted to football. From 2004-12, DI FBS recruiting expenditures increased by 55% overall and by 62% for the SEC." (References omitted)


So they argue that there is plenty of money in the system to cover an expense this size. And the thing that they are after is more competition for the recruits to benefit from. So, if some schools aren't able or choose not to pay it, well that's how competition works. Counter to this, the NCAA argues that the farther down this road we go, the greater injury there is to competitive balance in college sports. They argue that equalizing the amount that can be offered to recruits is really "procompetitive" since even though it reduces competition among recruits it increases competition in the actual games, and if there is no competition in the games there will be no sport. ("Procompetitive" is an antitrust term that describes restrictions on competition such as drafts, without which it is believed that the enterprise cannot function successfully. As a necessary evil they must be kept to a minimum.)

[Indoor66]

As to whether schools can afford this, here are some statements from the side opposing the NCAA (http://cdn.ca9.uscourts.gov/datastore/general/2015/01/21/14-16601%20Answering%20Brief.pdf):


So they argue that there is plenty of money in the system to cover an expense this size. And the thing that they are after is more competition for the recruits to benefit from. So, if some schools aren't able or choose not to pay it, well that's how competition works. Counter to this, the NCAA argues that the farther down this road we go, the greater injury there is to competitive balance in college sports. They argue that equalizing the amount that can be offered to recruits is really "procompetitive" since even though it reduces competition among recruits it increases competition in the actual games, and if there is no competition in the games there will be no sport. ("Procompetitive" is an antitrust term that describes restrictions on competition such as drafts, without which it is believed that the enterprise cannot function successfully. As a necessary evil they must be kept to a minimum.)

So the rich get richer. How about the VAST majority of the 330± schools who do not have the capital to compete. The heck with them. The Gonzaga's and George Mason's of the world can drop dead. Now I get it.

[uh_no]

So the rich get richer. How about the VAST majority of the 330± schools who do not have the capital to compete. The heck with them. The Gonzaga's and George Mason's of the world can drop dead. Now I get it.

i'm all for it. now that they're paid employees we can tax the players for the benefits they receive.

[swood1000]

So the rich get richer. How about the VAST majority of the 330± schools who do not have the capital to compete. The heck with them. The Gonzaga's and George Mason's of the world can drop dead. Now I get it.
You get it that the side opposing the NCAA views the NCAA and the universities as self-serving entities motivated by greed and flying under the false flag of amateurism, who take advantage of college athletes in order to line their own pockets. They would say that every Division I or FBS school can afford $5,000 per year per athlete and that's all we have to be concerned with at this time. If everybody is paying the same amount then the rich aren't getting richer but the athletes are able to benefit from the "dissemination of their “name, image, and likeness” (NIL)."

[swood1000]

i'm all for it. now that they're paid employees we can tax the players for the benefits they receive.
Is that because you believe that the "benefits" of amateurism are illusory and are the construct of entities whose goal is to take advantage of college-athletes? What about the argument that if college sports becomes professional it will begin to resemble minor league baseball and not be able to sustain fan support? The four "procompetitive" justifications for restrictions on paying athletes, according to the NCAA, are that they:


serve to increase consumer demand,
integrate student-athletes into the academic communities on their campuses,
promote competitive balance,
increase output in the college-education market (increase opportunities to participate in FBS football and Division I men’s basketball)

[Duvall]

You get it that the side opposing the NCAA views the NCAA and the universities as self-serving entities motivated by greed and flying under the false flag of amateurism, who take advantage of college athletes in order to line their own pockets. They would say that every Division I or FBS school can afford $5,000 per year per athlete and that's all we have to be concerned with at this time. If everybody is paying the same amount then the rich aren't getting richer but the athletes are able to benefit from the "dissemination of their “name, image, and likeness” (NIL)."

I mean, they can *say* that, but it's factually untrue that every Division I school can afford $5000 per athlete. There are Division I schools that struggling to keep their doors open, let alone expand their athletic budgets.

[swood1000]

I mean, they can *say* that, but it's factually untrue that every Division I school can afford $5000 per athlete. There are Division I schools that struggling to keep their doors open, let alone expand their athletic budgets.
One opponent of the NCAA supplied these figures (http://cdn.ca9.uscourts.gov/datastore/general/2015/02/11/14-16601%20Amicus%20by%20Martin%20Jenkins%20et%20al.p df):


In 2010, the NCAA announced a 14-year agreement with CBS and Turner Sports for the rights to broadcast the NCAA basketball tournament on television. The contract is valued at more than $11 billion, and is worth 41% more than the previous broadcast rights contract.
In November 2012, ESPN agreed to pay $5.64 billion over 12 years-or $470 million annually-to broadcast the College Football Playoff ("CFP"), a college football postseason tournament featuring a grand total of three games.

and finds it inconceivable that the purveyors of a system generating these types of profits say that they cannot afford to share a little bit of it with the football and basketball athletes of each Division I school, who after all are responsible for generating this revenue.

[Duvall]

One opponent of the NCAA supplied these figures (http://cdn.ca9.uscourts.gov/datastore/general/2015/02/11/14-16601%20Amicus%20by%20Martin%20Jenkins%20et%20al.p df):


In 2010, the NCAA announced a 14-year agreement with CBS and Turner Sports for the rights to broadcast the NCAA basketball tournament on television. The contract is valued at more than $11 billion, and is worth 41% more than the previous broadcast rights contract.
In November 2012, ESPN agreed to pay $5.64 billion over 12 years-or $470 million annually-to broadcast the College Football Playoff ("CFP"), a college football postseason tournament featuring a grand total of three games.

and finds it inconceivable that the purveyors of a system generating these types of profits say that they cannot afford to share a little bit of it with the football and basketball athletes of each Division I school, who after all are responsible for generating this revenue.

Of course those are revenues, not profits, and are already being shared with the member institutions to pay for athletic programs and the educations of student-athletes. What does that have do with whether Grambling or South Carolina State has another $500,000 to give to scholarship athletes? (They don't.)

[swood1000]

Of course those are revenues, not profits, and are already being shared with the member institutions to pay for athletic programs and the educations of student-athletes. What does that have do with whether Grambling or South Carolina State has another $500,000 to give to scholarship athletes? (They don't.)
I think they would say that some schools are not as bad off as might be supposed. For example the South Carolina State athletic revenues in 2014 were $12,103,454 and expenses were $9,321,066. Furthermore, they would say that the expenses for some schools are larger than they need be, and perhaps the athletes who generate the revenue should have a higher place in the list of priorities.

Then they would say that it is the other Division I sports that run in the red. Why should the athletes who generated the revenues be denied the opportunity to participate in them simply because other sports can't break even? If the NCAA wants to require Division I schools to offer sports that cannot support themselves then they should adopt rules that require that all schools share the revenue sufficiently to support all of these sports. After all, the NCAA controls March Madness, right? Why can't the shares of those who are successful be trimmed slightly to help out those at the bottom? (One answer is that the ones at the top don't want to do it and will threaten to take their ball and leave.)

Furthermore, it would be argued, the smaller conferences can equalize things by mandating a lower amount to be put into trust for the athletes. At least within those conferences there would not be an advantage for any team. (There is probably an argument that this would not harm competition generally between schools, but I don't know what it is.)

Here are some sites that list athletic revenues and expenses (the second time you go to them your view is partially blocked by a request for money): http://www.bbstate.com/info/teams-revenue http://www.bbstate.com/info/teams-budget

[swood1000]

Is that because you believe that the "benefits" of amateurism are illusory and are the construct of entities whose goal is to take advantage of college-athletes? What about the argument that if college sports becomes professional it will begin to resemble minor league baseball and not be able to sustain fan support? The four "procompetitive" justifications for restrictions on paying athletes, according to the NCAA, are that they:


serve to increase consumer demand,
integrate student-athletes into the academic communities on their campuses,
promote competitive balance,
increase output in the college-education market (increase opportunities to participate in FBS football and Division I men’s basketball)


I misstated this. The first of the NCAA's "procompetitive" justifications for restrictions on paying athletes should be "Promoting amateurism." The trial court accepted the first two as legitimate but rejected the last two.

[swood1000]

The trial court said (http://i.usatoday.net/sports/!Invesitgations-and-enterprise/OBANNONRULING.pdf) that the reason that the restrictions on paying students do not promote competitive balance is that the NCAA appears to be unconcerned with competitive balance. There is no restriction on the amount that high-revenue schools spend on coaching, recruiting and training facilities. The court said:


"The fact that high-revenue schools are able to spend freely in these other areas cancels out whatever leveling effect the restrictions on student-athlete pay might otherwise have. … This same sentiment underlies the NCAA's unequal revenue distribution formula, which rewards the schools and conferences that already have the largest athletic budgets. Revenues generated from the NCAA's annual Division I men's basketball tournament are distributed to the conferences based on how their member schools performed in the tournament in recent years. As a result, the major conferences -- and the highest revenue schools -- typically receive the greatest payouts, which hinders, rather than promotes, competitive balance." (References omitted)

However, isn't equal access to recruits much more important than the other things? The world's best coaches and facilities will not make a silk purse out of a sow's ear.

[SilkyJ]

I'm not sure what constitutes "having an impact" but 100 football and basketball players = $500,000. That is real money to most programs.



Then they would say that it is the other Division I sports that run in the red. Why should the athletes who generated the revenues be denied the opportunity to participate in them simply because other sports can't break even? If the NCAA wants to require Division I schools to offer sports that cannot support themselves then they should adopt rules that require that all schools share the revenue sufficiently to support all of these sports. After all, the NCAA controls March Madness, right? Why can't the shares of those who are successful be trimmed slightly to help out those at the bottom? (One answer is that the ones at the top don't want to do it and will threaten to take their ball and leave.)

Thanks for all the posts, this debate is interesting. Quick question for those more informed and following this--what are the implications of Title IX on this? For example, Indoor66 points out 500k of annual expense for just "the big two," but I'm imagining title IX would force these benefits to be paid to the women's side of the equation. Actually, what I'm really wondering, is if you have to pay 1 athlete or group of athletes at your school, would you effectively have to pay all of them this $5-7.5k stipend/trust. If so, that $500k is going to rapidly become $5M+ and now the costs are going to quite significant, even for major programs.

Now, I agree that there is enough money in the system to fund this (coach K pointed out recently that his starting salary at Duke in '81 was $40k and now he probably makes closer to $4M), but it would require significant changes on a number of fronts. I don't have a strong opinion on it yet, but the implications certainly seem to be massive.


Furthermore, it would be argued, the smaller conferences can equalize things by mandating a lower amount to be put into trust for the athletes. At least within those conferences there would not be an advantage for any team. (There is probably an argument that this would not harm competition generally between schools, but I don't know what it is.)

Here are some sites that list athletic revenues and expenses (the second time you go to them your view is partially blocked by a request for money): http://www.bbstate.com/info/teams-revenue http://www.bbstate.com/info/teams-budget

Thanks for the links here as well. However, if I'm reading your post correctly, you're saying that at mid and low major schools the conference can get involved and mandate lower stipends or whatever to make it a more even playing field for schools within that conference. But that still doesn't solve the OP's point that Gonzaga/George Mason/Butler/etc will be at a disadvantage to the BCS conferences, or whatever we're calling them now...

[Duvall]

I think they would say that some schools are not as bad off as might be supposed. For example the South Carolina State athletic revenues in 2014 were $12,103,454 and expenses were $9,321,066.

It is no longer 2014. The state of play for 2015-2016, more salient than dated info from Department of Education filings: (http://thetandd.com/sports/scsu-bulldog-athletics-will-survive-ad-says/article_f01aafcb-4f6b-5240-80ae-4015307e301e.html)


According to Bryant, every effort is being made to save as many scholarships across all sports as possible, even with a smaller budget of right at $6 million projected for the upcoming school year. The athletic department is dealing with a $2.5 million cut in subsidies from the university for 2015-16, based on recent budget cuts.

From school subsidies of $6.7 million in 2013-14 to $3.6 million in 2014-15, S.C. State athletics is now looking at $1.1 million in 2015-16, plus monies from collected student fees (which in 2014-15 added up to $6.7 million).

I'm sure there's another $500K in there somewhere, though.


Furthermore, they would say that the expenses for some schools are larger than they need be, and perhaps the athletes who generate the revenue should have a higher place in the list of priorities.

Then they would say that it is the other Division I sports that run in the red. Why should the athletes who generated the revenues be denied the opportunity to participate in them simply because other sports can't break even?

They can complain about "other priorities," and they can complain about non-revenue sports failing to break even, but they can't really do both at the same time. Most of the spending that does not go to supporting the student-athletes goes to trying to obtain an edge over other schools in the revenue sports through coaches' salaries and facilities. Shifting focus away from non-revenue programs to the programs that "support themselves" is only going to make that problem worse.[/QUOTE]

[swood1000]

Thanks for all the posts, this debate is interesting. Quick question for those more informed and following this--what are the implications of Title IX on this? For example, Indoor66 points out 500k of annual expense for just "the big two," but I'm imagining title IX would force these benefits to be paid to the women's side of the equation. Actually, what I'm really wondering, is if you have to pay 1 athlete or group of athletes at your school, would you effectively have to pay all of them this $5-7.5k stipend/trust. If so, that $500k is going to rapidly become $5M+ and now the costs are going to quite significant, even for major programs.

Now, I agree that there is enough money in the system to fund this (coach K pointed out recently that his starting salary at Duke in '81 was $40k and now he probably makes closer to $4M), but it would require significant changes on a number of fronts. I don't have a strong opinion on it yet, but the implications certainly seem to be massive.
Will pay-for-play have Title IX implications? One thing is for sure, the question will make many an attorney wealthy. Take your pick:

Yes: http://espn.go.com/college-sports/story/_/id/6769337/title-ix-seen-substantial-roadblock-pay-play-college-athletics and http://digitalcommons.law.wne.edu/cgi/viewcontent.cgi?article=1312&context=facschol

No: http://www.forbes.com/sites/marcedelman/2014/02/04/when-it-comes-to-paying-college-athletes-is-title-ix-more-of-a-red-herring-than-a-pink-elephant/ and http://scholarship.law.marquette.edu/cgi/viewcontent.cgi?article=1560&context=sportslaw

I guess if Title IX applies then all the women get a trust fund. That being the case, all the minor sport men have to have a trust fund too or it's gender discrimination.


Thanks for the links here as well. However, if I'm reading your post correctly, you're saying that at mid and low major schools the conference can get involved and mandate lower stipends or whatever to make it a more even playing field for schools within that conference. But that still doesn't solve the OP's point that Gonzaga/George Mason/Butler/etc will be at a disadvantage to the BCS conferences, or whatever we're calling them now...
Yes, I'm sorry I can't provide you with what I think is a viable argument for why that doesn't make any difference. The ruling of the trial judge was that competitive balance is not a result of the existing system (of not allowing pay-for-play). The judge said that this was the judgment of the experts. She also said that since there already is such a huge disparity in the amount each university receives in revenue and thus is able to spend on its athletic program, that equalizing the talent is just a drop in the bucket compared to it. I am still trying to understand this. It seems to me that talent is so important that if a school can't afford $500,000 to put in trust for its athletes the detriment to them (in reduced recruiting results) would be way more than the benefit to another school of being able to pay its coaches an additional $500,000. I'll let you know if I come up with anything.

[SilkyJ]

Yes, I'm sorry I can't provide you with what I think is a viable argument for why that doesn't make any difference. The ruling of the trial judge was that competitive balance is not a result of the existing system (of not allowing pay-for-play). The judge said that this was the judgment of the experts. She also said that since there already is such a huge disparity in the amount each university receives in revenue and thus is able to spend on its athletic program, that equalizing the talent is just a drop in the bucket compared to it. I am still trying to understand this. It seems to me that talent is so important that if a school can't afford $500,000 to put in trust for its athletes the detriment to them (in reduced recruiting results) would be way more than the benefit to another school of being able to pay its coaches an additional $500,000. I'll let you know if I come up with anything.

When you say "make a difference" do you mean for the trial or for the college sports in general? I guess I agree in either case, but I wasn't talking about the implications for the trial, nor was the OP (I think). This definitely would help the larger schools/programs, and give them a greater advantage, but whether that advantage is incremental or substantial, I don't know...my guess is its only incremental.

That said, 99% of mid/low majors are already at a significant disadvantage to the BCS programs and 5-20k isn't really game changing money, so maybe you're right, it doesn't really make a difference.

[swood1000]

When you say "make a difference" do you mean for the trial or for the college sports in general? I guess I agree in either case, but I wasn't talking about the implications for the trial, nor was the OP (I think). This definitely would help the larger schools/programs, and give them a greater advantage, but whether that advantage is incremental or substantial, I don't know...my guess is its only incremental.

That said, 99% of mid/low majors are already at a significant disadvantage to the BCS programs and 5-20k isn't really game changing money, so maybe you're right, it doesn't really make a difference.
OK, we're talking about a situation where there is a $5,000 cap on the amount that can be put into trust per year for each athlete, and what the effect would be if one conference decided that for them the cap was going to be $1,000 (if they were even allowed to do that) because their members couldn't afford more. It seems clear to me that this conference is going to be at a competitive disadvantage in recruiting, on top of difficulties it might already have in competing with the other conferences.

The trial judge said that competitive balance is not a significant result of the existing system (which does not allow pay-for-play). In other words, she said that allowing pay-for-play would not harm competitive balance. However, it seems to me that if one conference is able to pay significantly more than another it has to affect competitive balance. The judge said that allowing pay-for-play wouldn't make a difference but it's hard for me to find a justification for the judge's reasoning. Maybe, as you suggest, the idea is that the large conferences already get the best players and that wouldn't change if they also were able to pay more money, but I just can't buy it. Maybe her reasoning was that $5,000 is a low enough figure that all Division I schools could afford it, or that rules could be put in place to require the high-revenue schools to help out the low-revenue schools.

[swood1000]

It is no longer 2014. The state of play for 2015-2016, more salient than dated info from Department of Education filings: (http://thetandd.com/sports/scsu-bulldog-athletics-will-survive-ad-says/article_f01aafcb-4f6b-5240-80ae-4015307e301e.html)


According to Bryant, every effort is being made to save as many scholarships across all sports as possible, even with a smaller budget of right at $6 million projected for the upcoming school year. The athletic department is dealing with a $2.5 million cut in subsidies from the university for 2015-16, based on recent budget cuts.

From school subsidies of $6.7 million in 2013-14 to $3.6 million in 2014-15, S.C. State athletics is now looking at $1.1 million in 2015-16, plus monies from collected student fees (which in 2014-15 added up to $6.7 million).

I'm sure there's another $500K in there somewhere, though.
Those cynical of the good intentions of the NCAA and universities might say that if the athletic revenues in 2014 were $12,103,454 and this year they have an athletic budget of $6,000,000, then what happened to the other $6,000,000? Is South Carolina taking from student-athletes in order to pay for spending elsewhere? How is that justifiable?




Furthermore, they would say that the expenses for some schools are larger than they need be, and perhaps the athletes who generate the revenue should have a higher place in the list of priorities.

Then they would say that it is the other Division I sports that run in the red. Why should the athletes who generated the revenues be denied the opportunity to participate in them simply because other sports can't break even?

They can complain about "other priorities," and they can complain about non-revenue sports failing to break even, but they can't really do both at the same time. Most of the spending that does not go to supporting the student-athletes goes to trying to obtain an edge over other schools in the revenue sports through coaches' salaries and facilities. Shifting focus away from non-revenue programs to the programs that "support themselves" is only going to make that problem worse.

I don't see why they can't complain about "other priorities" and about non-revenue sports not breaking even at the same time. They would say that the non-revenue sports are just another drain on the revenue generated by the revenue sport athletes. They would say that if you make a priority list of how the revenues should be used, the SAs who generated the revenues should be higher on the list than the ones who did not, even if that results in having fewer non-revenue sports. Or, if there are educational reasons to have the other non-revenue sports, the NCAA should require a larger percentage of total sports revenues to go to support the non-revenue sports of the schools who are less well off.

[swood1000]

It is no longer 2014. The state of play for 2015-2016, more salient than dated info from Department of Education filings: (http://thetandd.com/sports/scsu-bulldog-athletics-will-survive-ad-says/article_f01aafcb-4f6b-5240-80ae-4015307e301e.html)

The article you quoted contains this:

In 2013-14, S.C. State athletics brought in total revenue of $9,816,895, while spending that same amount. Total subsidies for S.C. State that school year totaled $6,635,852 (nearly 68 percent of its budget).
But how do we get from that to the 2014 figures I got from the other source, showing a $3,000,000 excess of revenues over expenses for 2014? Again, the cynical would argue that numbers such as these can be self-serving. For example, when do you count an expenditure as an expense and when as an addition to capital? The decision makes a big difference on how the balance sheet looks. (I never liked government accounting but it is way different from the accounting used in for-profit enterprises. Which version should be used?)

Edit: Oh I see. The listing I used only showed basketball revenues and expenses. But the revenue for baskball was listed as $9,321,066 for 2014. So other revenue sources were only $500,000?

[-jk]

I've posted to this point before - the numbers schools report suit their purposes. As most campus sports facilities have multiple uses between NCAA sports and club, IM, and PE sports, schools can allocate money as they see fit.

My favorite example: Does the Duke golf team pay rent for use of the Washington Duke's course, or does the WD pay athletics to use the course? Either could be justified. And where does golf as a PE course fit? Duke can shuffle money around to get almost any result they want.

-jk

[swood1000]

The article you quoted contains this:

But how do we get from that to the 2014 figures I got from the other source, showing a $3,000,000 excess of revenues over expenses for 2014? Again, the cynical would argue that numbers such as these can be self-serving. For example, when do you count an expenditure as an expense and when as an addition to capital? The decision makes a big difference on how the balance sheet looks. (I never liked government accounting but it is way different from the accounting used in for-profit enterprises. Which version should be used?)

Edit: Oh I see. The listing I used only showed basketball revenues and expenses. But the revenue for baskball was listed as $9,321,066 for 2014. So other revenue sources were only $500,000?
Here's another listing of S. Carolina State: http://www.bbstate.com/teams/SCST by the same organization.

So it looks like the $9,321,066 is revenue for all athletics. But does that represent inflows to the athletic department from all sources, including state subsidies? Not clear at this point.

[swood1000]

Another factor here, similar to this O'Bannon one of the $5,000 annually in compensation for NIL (name, image, likeness) is that of an additional stipend to cover the full cost-of-attendance. From an article on 1/18/2015:


The discussion and vote Saturday outside Washington, D.C., thrust fully into the spotlight the ACC, Big 12, Big Ten, SEC and Pac-12 after the Division I Board of Directors granted autonomy to the Power 5 conferences last August to create rules free of the full NCAA membership.

"It's a big day for student-athletes," Big 12 commissioner Bob Bowlsby said. "... This is a big step forward and a response to a changing circumstance for the 21st-century athlete."

Full cost of attendance passed on a 79-1 vote from the panel comprised of 15 student-athletes -- a historic event in its own right -- and the 65 schools of the football-driven leagues.

Boston College cast the lone dissenting vote, according to NCAA tabulations.

Stipends, determined by institutions under federally created guidelines, have been estimated at $2,000 to $4,000 annually. They are designed to cover the cost-of-living expenses that fall outside athletic scholarships.

Group of Five and other non-football playing Division I conferences can opt to enact the proposals passed Saturday as early as next fall. http://espn.go.com/college-sports/story/_/id/12185230/power-5-conferences-pass-cost-attendance-measure-ncaa-autonomy-begins


So this clearly has the same effect in terms of an expense that may not be affordable by all. The NCAA has pledged $18,900,000 to help schools with cost-of-attendance. http://sports.yahoo.com/blogs/ncaaf-dr-saturday/ncaa-pledges--18-9-million-to-help-schools-with-cost-of-attendance-211422431.html

The NCAA has asked the Court of Appeals to delay the O'Bannon injunction set to go into effect on August 1, 2015. http://www.cbssports.com/collegefootball/writer/jon-solomon/25243954/ncaa-asks-appeals-court-to-delay-ed-obannon-injunction

However, apparently not everyone is on the same page here. NCAA Division I board of directors chairman Harris Pastides said he is not inclined to have the NCAA try to get the US Supreme Court to hear the Ed O'Bannon case if the 9th US Circuit Court of Appeals rules unfavorably against the association. http://www.cbssports.com/collegefootball/writer/jon-solomon/25200396/top-ncaa-board-member-doesnt-want-obannon-appealed-to-supreme-court-

From that interview with Pastides:


CBSSports.com: To be fair, that's what the players are saying. They're saying they've been restricted and their value is capped at zero after a scholarship.
Pastides: I know, but I would say 90 percent or more of NCAA members -- even the 65 universities in the five autonomy conferences -- are not going to find it easy to find the extra money because you can't divert it from the coaches. The only thing you really can do is either in the best case defer projects that are of value to the university and the players themselves, or increase tuition or take state appropriations away in order to pay the athletes more. There's not a huge treasury that allows us to do that. We're fortunate with the [SEC] Network we have some new income. That's where we're going to get the money.
CBSSports.com: Some members of Congress want to create a presidential commission to examine issues in college sports. Do you think that is going to happen and what do you believe Congress' role should be in college sports?
Pastides: I don't think it's going to happen. I think there will be a constant din. There will probably be a minority of people wanting this anytime there is a flagrant problem [in college sports], because there will be these problems, I'm sure, every year. Congress' role ought to be inquiring, to be interested, to be observant, but not to be managing or legislating because I think we've done very well all these years.

[swood1000]

Here's a study (http://college.holycross.edu/RePEc/spe/MathesonOConnor_CollegeAccounting.pdf) that tried to find actual college athletic revenues by defining the concept "generated revenues" that excluded "subsidies" such as (a) student fees assessed to students, (b) direct support from the institution or the state government, and (c) indirect support from the institution, which are all normally included in revenues, they said. They studied 164 schools:


While the 164 schools examined in this paper represent only a fraction of the total number of colleges with athletic programs, it does include a majority of the schools with what would normally be considered "big-time" programs. The sample includes 51 of the 72 teams in one of the six largest athletics conferences in the country, Big Ten, Big 12, Pac-10, Southeast Conference, Big East, and Atlantic Coast Conference, also known as the Bowl Championship Series (BCS) conferences. The sample also includes 46 of the 50 largest schools in terms of average football attendance and 37 of the 50 largest schools in terms of average basketball attendance.
First, the picture before subsidies are excluded from revenues:

5325

When subsidies are excluded from revenues:


The second measure of profitability shown in Table 4 excludes these subsidies from revenues. The NCAA designates the remaining revenues as "generated revenues". The exclusion of subsidies paints an entirely different picture of the profitability of college athletics. Football and basketball programs at BCS schools still tend to be highly profitable at nearly every school, but athletic programs overall lose money at even the largest institutions. Even with football generating in excess of $50 million per year at the highest revenue institutions, athletic departments only broke even at 15 of the 166 schools in the sample and overall lost nearly $6 million on average. At non-BCS schools, even football and basketball rarely break even, and athletics overall show a deficit at every school.

5324

Then they looked at it with alumni contributions also excluded from revenues:

5326

I think that the NCAA's opponents would not be deterred by this. They would say "tax the rich." In other words, they apparently believe that there would be enough if the huge windfalls such as that from March Madness were distributed in a different manner to a wider number of schools. The single profitable program in the final graph was the University of Michigan.

[lotusland]

Here's another listing of S. Carolina State: http://www.bbstate.com/teams/SCST by the same organization.

So it looks like the $9,321,066 is revenue for all athletics. But does that represent inflows to the athletic department from all sources, including state subsidies? Not clear at this point.

SC State seems a curious choice to consider since the school is in danger of being taken over by the state and is dire financial straights.

[swood1000]

SC State seems a curious choice to consider since the school is in danger of being taken over by the state and is dire financial straights.
I think it was originally put forward as an example of a school that couldn't afford to put $500,000/year into trust for athletes, not as an example of a typical school. I was just trying to figure out the facts of its athletic revenues but that is easier said than done since it's hard to break out subsidies from the state and school, as well as student fees, and consider only revenue generated from sports.

[swood1000]

Here's the NCAA version (http://www.ncaapublications.com/productdownloads/D1REVEXP2013.pdf) showing "generated revenue" (excluding subsidies, etc.):

5328

Again, the opponents of the NCAA would say that the question is not whether expenses exceed revenues but whether the reported expenses are realistic and accurate. They would no doubt question very high salaries paid to the coaching staff, costly high-tech equipment, and other expenditures they would refer to as "lavish." Also they might say that if minor sports are needed for educational reasons then they should be financed the same as other educational expenses and the total cost not taken from the revenue of the profitable sports, to the detriment of the SAs who generated that revenue.

This graph shows median whereas the previous ones showed mean, which may account for the difference.

[swood1000]

Here's another view of the NCAA data (http://www.ncaapublications.com/productdownloads/D1REVEXP2013.pdf) of "generated revenue," this one showing the largest reported amounts:

5329

It might be asked whether the schools at the top, starting with the one showing a generated revenue of $169,000,000 could make do with only $100,000,000, with the remainder distributed to those Division I schools not so fortunate. The largest reported expense is $146,000,000. That's a lot of expense.

The NCAA defines "generated revenue" as:
Those revenues generated independently by the athletics program, such as ticket sales, concessions, alumni/booster contributions, and NCAA and conference distributions.

[Richard Berg]

I don't see why it's on us to pore over financial documents and estimate how much the "typical" D1 school can afford. Even if we did a perfect job, the answer will obviously be different for each school.

Just let them negotiate, like everyone else involved does. Fans (and Federal judges for that matter) shouldn't have to determine player salaries any more than they determine coach salaries, equipment contracts, TV deals, etc etc. Price discovery is the one thing markets are actually good at; use it!

If players choose to bargain collectively, or hire agents to represent their interests, fine. If not, fine. Hopefully the judge will allow enterprising players to move forward (however they so choose) and tell the NCAA to move their meddling, price-fixing, antiquated cartel rules out of the way -- or else.

[swood1000]

I don't see why it's on us to pore over financial documents and estimate how much the "typical" D1 school can afford. Even if we did a perfect job, the answer will obviously be different for each school.

Just let them negotiate, like everyone else involved does. Fans (and Federal judges for that matter) shouldn't have to determine player salaries any more than they determine coach salaries, equipment contracts, TV deals, etc etc. Price discovery is the one thing markets are actually good at; use it!

If players choose to bargain collectively, or hire agents to represent their interests, fine. If not, fine. Hopefully the judge will allow enterprising players to move forward (however they so choose) and tell the NCAA to move their meddling, price-fixing, antiquated cartel rules out of the way -- or else.
Well, if most of them really can't afford it and would have to cut into bone to do so, that might affect the view of many people as to whether they should be required to do so.

So, do you believe that the supposed benefits of amateurism are illusory and that college athletes should be under no such restrictions? Recruits sign with the team willing to pay the highest salary?

[Duvall]

I don't see why it's on us to pore over financial documents and estimate how much the "typical" D1 school can afford. Even if we did a perfect job, the answer will obviously be different for each school.

Just let them negotiate, like everyone else involved does. Fans (and Federal judges for that matter) shouldn't have to determine player salaries any more than they determine coach salaries, equipment contracts, TV deals, etc etc. Price discovery is the one thing markets are actually good at; use it!

If players choose to bargain collectively, or hire agents to represent their interests, fine. If not, fine. Hopefully the judge will allow enterprising players to move forward (however they so choose) and tell the NCAA to move their meddling, price-fixing, antiquated cartel rules out of the way -- or else.

Or else...what? That's the question that self-righteous sports bloggers and preening talking heads never bother to try to answer - what happens after the NCAA is gone? How many programs will be dissolved and scholarships lost in their new capitalist paradise? Do they care?

[swood1000]

I don't see why it's on us to pore over financial documents and estimate how much the "typical" D1 school can afford. Even if we did a perfect job, the answer will obviously be different for each school.

Just let them negotiate, like everyone else involved does. Fans (and Federal judges for that matter) shouldn't have to determine player salaries any more than they determine coach salaries, equipment contracts, TV deals, etc etc. Price discovery is the one thing markets are actually good at; use it!

If players choose to bargain collectively, or hire agents to represent their interests, fine. If not, fine. Hopefully the judge will allow enterprising players to move forward (however they so choose) and tell the NCAA to move their meddling, price-fixing, antiquated cartel rules out of the way -- or else.
What's wrong with having a professional route and an amateur route? Those who want to be paid go the professional route.

[crimsondevil]

Again, the opponents of the NCAA would say that the question is not whether expenses exceed revenues but whether the reported expenses are realistic and accurate. They would no doubt question very high salaries paid to the coaching staff, costly high-tech equipment, and other expenditures they would refer to as "lavish." Also they might say that if minor sports are needed for educational reasons then they should be financed the same as other educational expenses and the total cost not taken from the revenue of the profitable sports, to the detriment of the SAs who generated that revenue.

I agree with the first part of this, sorta. The comparison of revenue and expenses is not really relevant. All the institutions we're talking about are non-profit, so revenue and expenses have to equal out eventually. If schools are forced to shell out extra money to something, it has to come out of somewhere else. If it can come out of "lavish" spending on other things, okay, but it's not clear that will (or can, for many schools) happen. It's really tricky to determine what is fair here.

I don't agree with the last part of swood's statement either. Every company (and non-profit organizations even more so) has to take money generated from one area and spend it on another - why are athletic departments not allowed to do this? And frankly, only a few players (the stars of the team) add most of the total value added by the players, but the $5000 proposal is for everyone to be paid equally, which is doing the same thing. Seems like a terrible argument to me. And I don't know where the additional subsidies for non-revenue sports would come from - state appropriations have continued to be cut year after year (even as state revenues have turned around, but that's another story). It's not like cutting (even deeper) on the academic side would go over well, not when academic departments already don't have enough money in their teaching budgets to cover things like office supplies.

[Richard Berg]

Or else...what? That's the question that self-righteous sports bloggers and preening talking heads never bother to try to answer - what happens after the NCAA is gone? How many programs will be dissolved and scholarships lost in their new capitalist paradise? Do they care?
Or else the NCAA will be forced (sooner or later) to put the money toward anti-trust lawyers and 9-figure fines. If they give up their quixotic fight for "amateurism", it could go to students instead. I prefer the latter.

On solvency: I doubt there are more than ~50 mbball athletes/year whose collegiate play is worth significant $$$. Universities could recoup their investment by taking an equity stake in their future earnings, in return for fronting them a salary + national exposure.

[Indoor66]

Or else the NCAA will be forced (sooner or later) to put the money toward anti-trust lawyers and 9-figure fines. If they give up their quixotic fight for "amateurism", it could go to students instead. I prefer the latter.

On solvency: I doubt there are more than ~50 mbball athletes/year whose collegiate play is worth significant $$$. Universities could recoup their investment by taking an equity stake in their future earnings, in return for fronting them a salary + national exposure.

Now, that ain't gonna happen!

[Richard Berg]

ain't gonna happen!
Why? It's pretty similar to how professors are hired: comfortable salary + access to university facilities & staff, knowing that the good performers will eventually bring millions of $$ in grant money, from which the university takes its cut.

Basketball stars-in-training wouldn't need nearly as much money, of course. Only a tiny # of Okafors nationwide could command a salary on par with a full-time researcher. The Amile Jeffersons of the world are more like TAs.

If the concern is oversight over expenses, well, universities already have those processes in place too. If Amile wants to attend a summer camp for big men, he can apply for reimbursement thru the same channels that a grad student would use to attend a conference / workshop in his field. Amile's market value can't be more than a few thousand bucks; it's crazy that we'd force him to pay for travel out of such a tiny salary (let alone out-of-pocket, as in the status quo).

[swood1000]

I agree with the first part of this, sorta. The comparison of revenue and expenses is not really relevant. All the institutions we're talking about are non-profit, so revenue and expenses have to equal out eventually. If schools are forced to shell out extra money to something, it has to come out of somewhere else. If it can come out of "lavish" spending on other things, okay, but it's not clear that will (or can, for many schools) happen. It's really tricky to determine what is fair here.


My point is this: people say that there's plenty of athletic revenue out of which the $5,000/person can be paid. The university counters that by claiming that after subtracting the athletic expenses from the athletic revenue there's really nothing left, so the $5,000 can't be paid out of athletic revenues. The question is whether this is true or whether they have "padded" the athletic expenses to make it seem like they have already used up all the athletic revenues, or whether they have paid the coaching staff more than was necessary, giving the appearance that all the athletic revenue has already been used up.


I don't agree with the last part of swood's statement either. Every company (and non-profit organizations even more so) has to take money generated from one area and spend it on another - why are athletic departments not allowed to do this? And frankly, only a few players (the stars of the team) add most of the total value added by the players, but the $5000 proposal is for everyone to be paid equally, which is doing the same thing. Seems like a terrible argument to me. And I don't know where the additional subsidies for non-revenue sports would come from - state appropriations have continued to be cut year after year (even as state revenues have turned around, but that's another story). It's not like cutting (even deeper) on the academic side would go over well, not when academic departments already don't have enough money in their teaching budgets to cover things like office supplies.
The argument being made here is similar to the above. The school says that after subtracting athletic expenses from athletic revenue there is no athletic revenue left out of which to pay into the trust fund. Those arguing on behalf of SAs who want a share of the revenue might say that the costs of the non-revenue sports should not be subtracted as expenses in this calculation since they really were not expenses necessary to generate that revenue (as basketball and football coach salaries were). The argument is that the costs of non-revenue sports should not be subtracted any more than costs of maintaining the chemistry lab should be subtracted. And when you don't subtract these expenses the athletic revenues exceed the athletic expenses by enough to be able to pay into the trust fund.

If there is enough athletic net revenue to pay into the trust fund without having to draw money from some other part of the university then it's easier to make the argument that the university should pay into the trust fund.

[Richard Berg]

The school says that after subtracting athletic expenses from athletic revenue there is no athletic revenue left out of which to pay into the trust fund. Those arguing on behalf of SAs who want a share of the revenue might say that the costs of the non-revenue sports should not be subtracted as expenses in this calculation since they really were not expenses necessary to generate that revenue (as basketball and football coach salaries were). The argument is that the costs of non-revenue sports should not be subtracted any more than costs of maintaining the chemistry lab should be subtracted. And when you don't subtract these expenses the athletic revenues exceed the athletic expenses by enough to be able to pay into the trust fund.
It's simpler than that, really. Every organization (universities included) has way more potential expenses than available budget. It's all a matter of priorities.

Some universities will pay athletes by cutting back on fancy buildings and 7-figure coaches (yay). Others will pay athletes by cutting back on chemistry labs (boo). Top destinations like Duke might sidestep the accounting game, preferring to convince recruits that a Duke degree alone is worth more than a Kentucky degree + $20K trust fund. Bottom-feeders like SC State should probably drop out of D1, which is fine.

Bottom line: good schools will put their students first. Bad ones won't...which is sad, but no different from today: as we've seen in this very thread, most athletic departments are already budget sinks, i.e. suck money away from the educational departments. And no, I don't think the NCAA (or any other regulator short of the .gov's purse strings) can force universities to prioritize education over athletics.

[Indoor66]

My point is this: people say that there's plenty of athletic revenue out of which the $5,000/person can be paid. The university counters that by claiming that after subtracting the athletic expenses from the athletic revenue there's really nothing left, so the $5,000 can't be paid out of athletic revenues. The question is whether this is true or whether they have "padded" the athletic expenses to make it seem like they have already used up all the athletic revenues, or whether they have paid the coaching staff more than was necessary, giving the appearance that all the athletic revenue has already been used up.


The argument being made here is similar to the above. The school says that after subtracting athletic expenses from athletic revenue there is no athletic revenue left out of which to pay into the trust fund. Those arguing on behalf of SAs who want a share of the revenue might say that the costs of the non-revenue sports should not be subtracted as expenses in this calculation since they really were not expenses necessary to generate that revenue (as basketball and football coach salaries were). The argument is that the costs of non-revenue sports should not be subtracted any more than costs of maintaining the chemistry lab should be subtracted. And when you don't subtract these expenses the athletic revenues exceed the athletic expenses by enough to be able to pay into the trust fund.

If there is enough athletic net revenue to pay into the trust fund without having to draw money from some other part of the university then it's easier to make the argument that the university should pay into the trust fund.

From what pot of gold does the money for the non-revenue sports come from. Or are we going to do away with them? Bye Bye soccer, tennis, golf, track, cross country, swimming, fencing, etc. Also, who pays for the intramural athletic fields and facilities? Ah, the darn intricacies of it all. I know, just increase student fees.:mad::cool:

[Richard Berg]

From what pot of gold does the money for the non-revenue sports come from. Or are we going to do away with them? Bye Bye soccer, tennis, golf, track, cross country, swimming, fencing, etc. Also, who pays for the intramural athletic fields and facilities? Ah, the darn intricacies of it all. I know, just increase student fees.:mad::cool:
The same way we fund scholarships for exceptional talents in music or science or community service or whatever. Donors give money. Some of the money has strings attached ("the Joe Blow Fellowship in Basket-Weaving"). Most does not, allowing the university to prioritize as it sees fit (in accordance with Title IX etc).

If the end result is a smaller ratio of full-ride athletes to full-ride mathletes, I'm ok with that.

[Duvall]

The same way we fund scholarships for exceptional talents in music or science or community service or whatever. Donors give money. Some of the money has strings attached ("the Joe Blow Fellowship in Basket-Weaving"). Most does not, allowing the university to prioritize as it sees fit (in accordance with Title IX etc).

If the end result is a smaller ratio of full-ride athletes to full-ride mathletes, I'm ok with that.

Okay, but that ratio isn't changing because there are more academic scholarships, it's because schools are shifting their focus from supporting non-revenue sports with scholarships to supporting the revenue sports - because if those sports are going to have payrolls they had better damned well be successful and profitable. It won't mean the end of seven-figure salaries for college football and basketball coaches, it will mean the beginning of eight-figure salaries for those coaches.

If you're okay with that, then that's fine. I'm just frustrated by the lack of candor from the Bilases of the world about what they are actually proposing.

[swood1000]

From what pot of gold does the money for the non-revenue sports come from. Or are we going to do away with them? Bye Bye soccer, tennis, golf, track, cross country, swimming, fencing, etc. Also, who pays for the intramural athletic fields and facilities? Ah, the darn intricacies of it all. I know, just increase student fees.:mad::cool:
Universities don't use profit/loss accounting like for-profit entities do. But a for-profit entity, in order to determine whether a division of the company is profitable, will take the revenues of the division and subtract from them the expenses necessary to generate that revenue. MBB athletes might say the same thing. Take the basketball revenue and subtract the expenses necessary to generate that revenue (coach's salaries, gym maintenance, etc.) After you have done that, is there enough left to create a trust fund for the MBB athletes? If so, then they would say that we have enough revenue to do so and that it is appropriate to do so since that was an expense necessary to generate that revenue.

As far as the pot of gold from which we are going to fund archery, they would ask why we even have archery, and what claim archery has on MBB revenue. Why does archery have a claim on MBB revenue but the expenses of the chemistry lab are not a claim on MBB revenue? From what pot of gold are we going to fund the chemistry lab? If that fund is limited then we need to decide our priorities and determine whether we want to have a chemistry lab or an archery team, or so they would argue.

[Richard Berg]

Okay, but that ratio isn't changing because there are more academic scholarships, it's because schools are shifting their focus from supporting non-revenue sports with scholarships to supporting the revenue sports - because if those sports are going to have payrolls they had better damned well be successful and profitable. It won't mean the end of seven-figure salaries for college football and basketball coaches, it will mean the beginning of eight-figure salaries for those coaches.

If you're okay with that, then that's fine. I'm just frustrated by the lack of candor from the Bilases of the world about what they are actually proposing.
I'm skeptical they'd find it cost-effective to spend that kind of money. Sports victories are a zero-sum game, after all. You're talking about NBA level salaries, for a talent pool where only a select few even make it into the D-League (5-figure salary).

But hey, if athletic depts discover that's what it takes to balance their books, fine. If D1 swimming reverts to intramural in the process, fine. What matters is that they contribute (net) funds to the university pot of gold, rather than taking away from it like almost everyone does today.

[swood1000]

I'm skeptical they'd find it cost-effective to spend that kind of money. Sports victories are a zero-sum game, after all. You're talking about NBA level salaries, for a talent pool where only a select few even make it into the D-League (5-figure salary).

But hey, if athletic depts discover that's what it takes to balance their books, fine. If D1 swimming reverts to intramural in the process, fine. What matters is that they contribute (net) funds to the university pot of gold, rather than taking away from it like almost everyone does today.
So, do you believe that the supposed benefits of amateurism are illusory and that college athletes should be under no such restrictions? Recruits sign with the team willing to pay the highest salary?

[swood1000]

But hey, if athletic depts discover that's what it takes to balance their books, fine. If D1 swimming reverts to intramural in the process, fine. What matters is that they contribute (net) funds to the university pot of gold, rather than taking away from it like almost everyone does today.
But the mission of the university is education, not profit. Whether a class or program should be offered depends on whether the educational value exceeds the cost. Otherwise, why not just use the university facilities for factories or other uses with profit as the principal criterion?

Why should D1 swimming be required to generate a profit and the Department of Romance Languages not? The answer would have to be that swimming does not have as much educational value, but is that true? A person who believes that the worth of university programs is to be primarily judged by whether they make a profit has abandoned the historical understanding of the purpose of a university.

[Richard Berg]

So, do you believe that the supposed benefits of amateurism are illusory and that college athletes should be under no such restrictions? Recruits sign with the team willing to pay the highest salary?
Yes, I think the benefits of amateurism are illusory (and for the most part, always were). Regardless, I don't think revenue-sport athletes can be called "amateur" by any credible definition.

I don't think salary will tip the needle that much, actually. Average D1 players will be hard pressed to field offers that vary by more than a couple grand -- probably not enough to keep a HS kid from choosing his hometown favorite / the coach he clicked with / his preferred degree program. For a select few with elite skills and/or desperate family finances, the difference could be life changing; hopefully nobody will begrudge those kids from chasing the highest bid.

Endorsements might prove a bigger factor. Local advertisers know that Kentucky players have their state's undivided loyalty, while they'd have to tread carefully before putting a Texas player's face in an A&M-leaning media market. Would be interesting to see this play out. Even so I think the best recruits would still end up at (roughly) the same schools they do today.


But the mission of the university is education, not profit.
Completely agree. Unfortunately, nothing prevents a university from slashing educational budgets in order to prop up sports. Most D1 athletics run at a loss (i.e. are siphoning funds from the university's operating budget), yet the NCAA doesn't even pretend to care. Labor negotiations within the athletics world, O'Bannon included, will not (and indeed cannot) change this. It will only stop if the DoE threatens to withdraw Federal funds from those schools...which will never happen.

Best we can do is advocate (as fans and donors) for our schools to do the right thing. Namely: give fair offers to our athletic recruits, collect the fruit of their labor, and direct those profits back to education. For an elite private school like Duke, I'd define "education" as need-based scholarships. For a struggling school like SC State, it might just mean instructor payroll. In both cases, swimming scholarships are WAY down on the priority list, sorry.

[swood1000]

Yes, I think the benefits of amateurism are illusory (and for the most part, always were). Regardless, I don't think revenue-sport athletes can be called "amateur" by any credible definition.
Here's the NCAA short definition of amateurism (http://www.ncaa.org/amateurism):

Amateur competition is a bedrock principle of college athletics and the NCAA. Maintaining amateurism is crucial to preserving an academic environment in which acquiring a quality education is the first priority. In the collegiate model of sports, the young men and women competing on the field or court are students first, athletes second.

The NCAA membership has adopted amateurism rules to ensure the students' priority remains on obtaining a quality educational experience and that all of student-athletes are competing equitably.

All incoming student-athletes must be certified as amateurs. With global recruiting becoming more common, determining the amateur status of prospective student-athletes can be challenging. All student-athletes, including international students, are required to adhere to NCAA amateurism requirements to remain eligible for intercollegiate competition.

In general, amateurism requirements do not allow:

Contracts with professional teams
Salary for participating in athletics
Prize money above actual and necessary expenses
Play with professionals
Tryouts, practice or competition with a professional team
Benefits from an agent or prospective agent
Agreement to be represented by an agent
Delayed initial full-time collegiate enrollment to participate in organized sports competition

Why is this not a credible definition?

[Richard Berg]

Young men cannot be "students first, athletes second" when there are tens of billions of dollars riding on their athletic performance. The fact they must also follow a 500-page rulebook does not change the fundamental nature of their labor.

Simply because they employ (well compensated) compliance officers to dot their i's and cross their t's does not make them "amateurs", any more than Exxon's EPA paperwork makes them an "environmental company".

edit: to be clear, this is not a criticism of either. I like sports. I like energy. I simply reserve the right to call a spade a spade.

[swood1000]

Young men cannot be "students first, athletes second" when there are tens of billions of dollars riding on their athletic performance.I don't follow this.Take an average Duke MBB player from this past season and suppose instead that Duke did not receive millions of dollars from broadcasting the games and from winning the tournament. What change would this have produced in the average Duke player? Would he have approached things differently? Can you clarify your point?

[swood1000]

Young men cannot be "students first, athletes second" when there are tens of billions of dollars riding on their athletic performance. The fact they must also follow a 500-page rulebook does not change the fundamental nature of their labor.

Simply because they employ (well compensated) compliance officers to dot their i's and cross their t's does not make them "amateurs", any more than Exxon's EPA paperwork makes them an "environmental company".

edit: to be clear, this is not a criticism of either. I like sports. I like energy. I simply reserve the right to call a spade a spade.
My city has a city championship golf tournament that does not allow professional golfers to compete. Is there something wrong with this? Suppose they televised the tournament locally and had some revenue which they used to run the tournament or hire some staff or invested for some future use. Would there be something wrong with this? Would you argue that some of the revenue must be distributed to the amateur golfers? If an amateur golfer doesn't like the fact that there is going to be some revenue generated in part by his golf, and that he will not share in it, he can refuse to participate, right? Or he can organize his own tournament with a different set of rules. What's wrong with this? Have his rights been abridged?

[Richard Berg]

I don't follow this.Take an average Duke MBB player from this past season and suppose instead that Duke did not receive millions of dollars from broadcasting the games and from winning the tournament. What change would this have produced in the average Duke player? Would he have approached things differently? Can you clarify your point?
Is this a serious question? Without outside money, Duke basketball would look radically different. Players would join & quit frequently, uninhibited by conditional scholarships, like any other volunteer / student club. No 80 hour work weeks. The small army of conditioning coaches, physical therapists, nutritionists, academic advisers, tutors, etc that currently shepherd them thru their daily routine would all be working in the private sector somewhere. No wood paneled varsity-only weight rooms, study lounges, or video booths. No SportsVue or Blue Planet. The team would travel by school bus. The ACC would replace Syracuse and Miami with Elon and Davidson. Final Four tickets would cost $50 and fit comfortably into Reynolds Coliseum.

Our 2015 starters would've played for European club teams. Most of our role players would've pursued degrees near their hometown, at jucos or Div 3 schools you've never heard of. MP3 would be 1st Team ACC. Coach K would have roughly the same number of championship rings, but they would say "Lakers" on them.

[Richard Berg]

My city has a city championship golf tournament that does not allow professional golfers to compete. Is there something wrong with this? Suppose they televised the tournament locally and had some revenue which they used to run the tournament or hire some staff or invested for some future use. Would there be something wrong with this? Would you argue that some of the revenue must be distributed to the amateur golfers? If an amateur golfer doesn't like the fact that there is going to be some revenue generated in part by his golf, and that he will not share in it, he can refuse to participate, right? Or he can organize his own tournament with a different set of rules. What's wrong with this? Have his rights been abridged?
Nothing wrong with that.

Get back to me when your city has conspired with 1000 other cities across the USA, made utter dedication to golf a condition of city residence, dictated what outside contacts a resident may & may not have, and threatened to blackball them from the other 999 cities if they disobey.

[bob blue devil]

...
Our 2015 starters would've played for European club teams. Most of our role players would've pursued degrees near their hometown, at jucos or Div 3 schools you've never heard of.

so you're saying these athletes who deserve to be paid actually do have alternatives to get paid, but are freely choosing the terribly unfair package offered by a member of the ncaa "cartel"? i wonder how the schools are pulling this off - must be some sort of evil magic, because certainly the deal is not fair.

apologies for the sarcasm - couldn't help myself as i am emotionally vested on the other side of the argument. simply put, if duke (or any school) competed for athletes on salary, i'd probably lose all interest and advocate converting to a div2 program or whatever the alternative would be. you think keeping athletes eligible was a conflict before, well wait until you start paying someone a hefty salary...

[swood1000]

Is this a serious question? Without outside money, Duke basketball would look radically different. Players would join & quit frequently, uninhibited by conditional scholarships, like any other volunteer / student club.
Really don't follow this. We're just saying that Duke does not receive millions of dollars from this. The games are still televised and the championships are still held. One of the reasons recruits come to Duke is for the national exposure. Most games are televised nationally. There's plenty of attention from the national press. There's a significant chance of winning a national championship. All this exposure allows them to be noticed by the NBA scouts and to build a following. Why would they join and quit frequently? Do you think that's what they did back in 1900. They were undisciplined and didn't really care? Harvard didn't care whether they beat Yale and so the Harvard athletes wouldn't show up for practice?


The small army of conditioning coaches, physical therapists, nutritionists, academic advisers, tutors, etc that currently shepherd them thru their daily routine would all be working in the private sector somewhere. No wood paneled varsity-only weight rooms, study lounges, or video booths. I agree with this. The staff would be reduced significantly but so what? Would the athletes be less motivated because of that? No country club setting but no other team would have it any better. Would that make them less motivated?


No SportsVue or Blue Planet.Why not? There would still be fan interest.


The team would travel by school bus. The ACC would replace Syracuse and Miami with Elon and Davidson.Even if it were true that team travel could not be accommodated, which I don't think would have to be the case, is there an insufficient number of worthy opponents within a bus ride from Duke? Back in the days of Babe Ruth did sports teams lack fan support because airlines were not available to fly them to distant cities?


Final Four tickets would cost $50 and fit comfortably into Reynolds Coliseum.Because of a lack of fan interest? Why?


Coach K would have roughly the same number of championship rings, but they would say "Lakers" on them.Back in the early years of Adolph Rupp there were no competent college coaches because the big bucks were not there?

So I asked what change would be produced in the average Duke player if Duke did not receive millions of dollars, and is it your answer that the average Duke player would no longer be interested in playing basketball, and the fans would no longer care about the team, even if the team were just as successful?

[swood1000]

Nothing wrong with that.

Get back to me when your city has conspired with 1000 other cities across the USA, made utter dedication to golf a condition of city residence, dictated what outside contacts a resident may & may not have, and threatened to blackball them from the other 999 cities if they disobey.Could you explain what "made utter dedication to golf a condition of city residence" is analogous to for college athletes? They can turn pro any time they want to. The D-League and other options are there for those just graduating.

Consider the National Amateur Golf Tournament. Does this involve a national conspiracy to dictate to amateur golfers and threaten to blackball them if they disobey? There are no doubt hefty revenues from televising that tournament. Do you have a principled reason for saying that those revenues need not be distributed to the athletes but that the revenues of March Madness must be? What is the principle?

[swood1000]

so you're saying these athletes who deserve to be paid actually do have alternatives to get paid, but are freely choosing the terribly unfair package offered by a member of the ncaa "cartel"? i wonder how the schools are pulling this off - must be some sort of evil magic, because certainly the deal is not fair.

apologies for the sarcasm - couldn't help myself as i am emotionally vested on the other side of the argument. simply put, if duke (or any school) competed for athletes on salary, i'd probably lose all interest and advocate converting to a div2 program or whatever the alternative would be. you think keeping athletes eligible was a conflict before, well wait until you start paying someone a hefty salary...
I guess there would also have to be a kind of high-school draft, so that the top players would have no choice but would have to go to the university that drafted them. Otherwise, the top talent would be bought up by the team with the deepest pockets. But perhaps the proponents of paying college athletes would have no problem with this since it's just a job, the same as when the pros get drafted.

So, Kenpom lists 351 Division I basketball teams, with Grambling St. bringing up the rear. Does Grambling St. get first pick in the draft? What if Grambling St. doesn't offer as much as Kentucky? Or, if recruits will be permitted to choose any school they want, then a wealthy alumnus of Grambling St. can supply them with next year's national championship team, perhaps with the understanding that he will share in the proceeds. I agree with you about the effect that this will have on the popularity of college basketball.

[sagegrouse]

I am not sure I should step into this discussion, but I do have a point of view: Let me posit a "strategic landscape" of sports in America that is wildly different from almost all other countries: "revenue sports" and Olympic sports for those under 21 or 22 tend to occur at colleges and universities, not at athletic clubs like Real Madrid, as in Spain and elsewhere, or other sports entities.

A few observations are appropriate: this is a huge "business," whether it obeys all the rules of normal business practice . ("More than 460,000 NCAA student-athletes – more than ever before – compete in 23 sports every year.")

The economic model is full of contradictions: the athletes are "amateurs," but actually they are compensated for their college expenses and expected to make normal academic progress. (And don't get me started on the "pure-as-the-driven slush" Ivy League -- it's basically a "recruited athlete model" just like everyone else.)

Also, the most important university programs, including Duke, generate more than $50 million in athletic revenue every year. (The semi-authoritative USA Today annual study shows 55 public universities above $50 million, omitting private schools like Duke, Notre Dame, Stanford, USC, etc.) Definitions differ, but "revenue" includes gate receipts, TV and other media fees, contributions by individual donors, subsidies from the university or its students ("athletic fees").

Clearly, this model faces some challenges in the courts and elsewhere, such as in proposals that the athletes be compensated somehow for use of their personal images.

If we decide to change fundamentally the basic student-athlete model, either through de-emphasis of athletics or through a fully professional college model with salaries, I expect the magnitude of the earthquake resulting would destroy college athletics as we know it.

And maybe we should do that, but as a consumer and fan, I think there are some real positives in the current model.

[swood1000]

If we decide to change fundamentally the basic student-athlete model, either through de-emphasis of athletics or through a fully professional college model with salaries, I expect the magnitude of the earthquake resulting would destroy college athletics as we know it.What do you mean by a de-emphasis of athletics?

[sagegrouse]

What do you mean by a de-emphasis of athletics?

Division II (partial scholarship) or Division III (no scholarship) models would qualify. also, limits on athletic spending, coaches salaries, etc.

[swood1000]

Division II (partial scholarship) or Division III (no scholarship) models would qualify. also, limits on athletic spending, coaches salaries, etc.
What would be wrong with limits on athletic spending or coaches salaries, so that all Division I programs would spend roughly the same amount, or up to a certain limit? It doesn't seem that that would destroy college athletics as we know it. How does the Ivy League get around the supposed restriction on athletic scholarships? Suppose we truly banished athletic scholarships. The quality of play would be reduced but to what level? To that of Nick Pagliuca? Would that really cause the fans to lose interest? Isn't it possible that it would increase fan interest since the players would seem more like "real students"?

[acdevil]

No disrespect to Nick Pagliuca, but Yes.

[swood1000]

No disrespect to Nick Pagliuca, but Yes.
I'm not so sure. I think that people look at these things relatively. The quality of college play is well below that in the NBA but that doesn't make people less enthusiastic about college games. We're not talking about substituting some players who are klutzes, just players who are a little bit slower. But since all the players would be a little bit slower it wouldn't stand out.

In any event, there would be enough Ryan Kellys to keep things interesting.

[lotusland]

Wait I'm confused. Why do we have to do a way with scholarships and play with walk-ons again?

[sagegrouse]

What would be wrong with limits on athletic spending or coaches salaries, so that all Division I programs would spend roughly the same amount, or up to a certain limit? It doesn't seem that that would destroy college athletics as we know it. How does the Ivy League get around the supposed restriction on athletic scholarships? Suppose we truly banished athletic scholarships. The quality of play would be reduced but to what level? To that of Nick Pagliuca? Would that really cause the fans to lose interest? Isn't it possible that it would increase fan interest since the players would seem more like "real students"?

I am not supporting or opposing any such moves. My position is that college athletics today, warts and all, is a powerful economic model that brings pleasure and enjoyment to the American people. I'd be careful about making major changes, whether piecemeal or across the board.

If I were to respond to your proposal on spending and coaches salaries, I would say that the major schools would never stand for the changes and would leave the NCAA and found their own set of super conferences. Duke would be among them.

WRT the Ivy League, which I did not attend but did help pay for a student there, all athletes in the major and most minor sports are recruited. They have to meet Ivy League academic minimums (which can differ a bit by school); then, if they are really good and have no other flaws, they are admitted -- subject only to a limit on athletic exceptions by sport. I had a friend whose son went for a recruiting visit to Penn and a group of prospective athletic recruits was told by an Asst. Admissions Director (presumably inexperienced) that they would never be considered for Penn EXCEPT for their athletics. The kid was totally insulted and went elsewhere.

Ah, yes, the lack of an athletic scholarship fund? Of course, athletic scholarships are paid from the general scholarship fund. And it's getting easier every day: the Ivy Leagues schools have a commitment to meet the total financial needs of their admitted applicants. Helps a lot, doesn't it?

[swood1000]

Wait I'm confused. Why do we have to do a way with scholarships and play with walk-ons again?
The question is whether that would destroy college athletics as we know it.

[Bluedog]

What would be wrong with limits on athletic spending or coaches salaries, so that all Division I programs would spend roughly the same amount, or up to a certain limit? It doesn't seem that that would destroy college athletics as we know it. How does the Ivy League get around the supposed restriction on athletic scholarships? Suppose we truly banished athletic scholarships. The quality of play would be reduced but to what level? To that of Nick Pagliuca? Would that really cause the fans to lose interest? Isn't it possible that it would increase fan interest since the players would seem more like "real students"?

A Duke scholarship is worth a lot more in $$ amounts than a school like UK. That would seriously put Duke at a disadvantage because giving 10 scholarships is considerably more money at Duke than a state school. On the other hand, going to a no scholarship model would probably help a school like Duke (and Stanford) that are committed to meeting the financial needs of the ENTIRE student body and have significant financial resources pouring into financial aid (Duke isn't Harvard level, for sure, but is much better than 95% of DI with regards to generosity of financial aid). (Would likely also help state schools securing in state talent since tuition is much less.)

[swood1000]

I'd be careful about making major changes, whether piecemeal or across the board. Agree absolutely.


If I were to respond to your proposal on spending and coaches salaries, I would say that the major schools would never stand for the changes and would leave the NCAA and found their own set of super conferences. Duke would be among them.I could see them doing that if they were faced with losing their revenue, but not necessarily if they were faced with spending caps.


And it's getting easier every day: the Ivy Leagues schools have a commitment to meet the total financial needs of their admitted applicants. Helps a lot, doesn't it?Yes, there were some hidden benefits in the decision to do that.

[lotusland]

The question is whether that would destroy college athletics as we know it.
Yes. Yes it would. However college sports would be fine without athletes who are pro-ready. If there were no age restrictions on pro ball, the effect, if any, on college sports would be minimal.

[swood1000]

A Duke scholarship is worth a lot more in $$ amounts than a school like UK. That would seriously put Duke at a disadvantage because giving 10 scholarships is considerably more money at Duke than a state school. On the other hand, going to a no scholarship model would probably help a school like Duke (and Stanford) that are committed to meeting the financial needs of the ENTIRE student body and have significant financial resources pouring into financial aid (Duke isn't Harvard level, for sure, but is much better than 95% of DI with regards to generosity of financial aid). (Would likely also help state schools securing in state talent since tuition is much less.)
I was assuming that the limits on athletic spending would not take into consideration the amount charged for tuition but would say that each school is permitted X number of scholarships and in addition to that is permitted to spend $Y on coach salaries and other expenses of the program.

[swood1000]

Yes. Yes it would. However college sports would be fine without athletes who are pro-ready. If there were no age restrictions on pro ball, the effect, if any, on college sports would be minimal.
Why would it destroy college athletics as we know it? You wouldn't be interested in watching a team made up of Ryan Kellys and Nick Pagliucas, assuming all the other teams had similar talent?

[swood1000]

Wait I'm confused. Why do we have to do a way with scholarships and play with walk-ons again?
But they needn't play solely with walk-ons. They could still recruit players, but there would be no athletic scholarships. Academic scholarships would still be available and I'm not sure how the mechanism would work by which the NCAA would determine that player X would not have been given an academic scholarship but for his basketball aptitude, so the scholarship is termed an athletic one and player is ineligible. I guess that while such attributes as musical ability could qualify one for entrance or for a scholarship the same would not be true of athletic ability.

[ChillinDuke]

First off, I've enjoyed reading your continued analysis of the legal battle here - so thank you. Your recent posts have taken a turn toward asking questions regarding opinions on certain hypothetical situations. I'm not sure I necessarily follow where you're going with these hypotheticals. But I'll play.


What would be wrong with limits on athletic spending or coaches salaries, so that all Division I programs would spend roughly the same amount, or up to a certain limit? It doesn't seem that that would destroy college athletics as we know it.

Nothing would be "wrong" with it, but it would undeniably change the, let's call it, "marketplace." Marketplace for what? Marketplace for development of athletic skill. By imposing an artificial spending cap on the current framework (at the discretion of universities to decide where to make any required spending cuts within the program), do you agree that in theory my so-called marketplace will offer comparatively less to the athlete from which he can develop his skill. I think that point is more or less clear. The part that gets less clear is the ramifications of the "less"-ness. I'm sure many different possibilities could be envisioned, but I'll offer the first theory that pops into my head. It starts with the decreased resources that the spending cap produces, let's assume it's a somewhat significant decrease or at least not insignificant. So, for example, you'd have a scenario where if schools decide to reduce coaching salaries to stay under the cap, you'd presumably have some coaches departing for other places where they can make more money that isn't artificially capped. As such, coaching suffers. Or apply the scenario I just hypothesized to any other spending stream: gyms, travel, workout facilities, etc. As a result of this, at least directionally I have to assume a subset of athletes will substitute away from the college route and a new market will either be created or an existing market will increase in size which can absorb athletes that believe they have a chance to go professional (which is probably a much larger amount of athletes than actually does go pro) in order to maximize their potential via maximal facilities, coaching, etc.

Now based on my hypothetical outlined above, and depending on the "not insignificant"-ness of any imposed cap, the playing pool may become considerably weaker. Enough so, that I would say it could absolutely "destroy college athletics as we know it." I won't say it would, but it absolutely could. Especially if the cap was so punitive that it was trying to level the playing field across the entirety of Division I.


How does the Ivy League get around the supposed restriction on athletic scholarships?

Sage took care of this part.


Suppose we truly banished athletic scholarships. The quality of play would be reduced but to what level? To that of Nick Pagliuca? Would that really cause the fans to lose interest? Isn't it possible that it would increase fan interest since the players would seem more like "real students"?

This is a trickier one - and I'm not sure if it was meant as more of a follow up on the Ivy League question. But I agree the quality of play would be reduced. And I think there is a materially different level of quality that you are estimating by lumping Nick Pagliuca and Ryan Kelly into the same sentence, one a walk-on the other an NBA player. Why would there be enough Ryan Kelly's to keep things interesting? If Ryan Kelly, the consensus #14 recruit in 2009 and 48th pick in the 2013 NBA Draft, found college basketball an attractive route to develop his presumably best money-earning skill despite either (a) not receiving a scholarship or (b) receiving less resources in the form of coaching / gyms / etc, I'd be pretty surprised. It's possible there would be some Ryan Kelly's that chose college in this new hypothetical you describe. But I can't agree that it would be "enough to keep it interesting."

So, in my eyes, we're back to Nick Pagliuca. And yes, I think that would materially affect fan interest. Why? Because the allure of college basketball, to me and probably others, is a sweet spot. It's the intersection of reminiscence (for your college), nostalgia (for your younger days, perhaps playing a sport), excitement (of enjoying the actual sport), familiarity (of a product you've followed for many years, like I have and many of us on the board have), fandom (being part of a loyal group), relatability (for understanding that these are not professionals that are so incredible at their sport that it's nearly unbelievable), following (beginning to follow a player through the maturation process from teenager to adult to (sometimes) professional adult and following them through their career progression and throughout their life), and many other factors. If you give me Nick Pagliuca's on the court, I lose excitement because the sport is certainly less impressive and enjoyable when played at a lower level. I lose familiarity because you've altered my understanding of the product. I lose following because they ain't going professional anymore. And as a result of these, I will highly likely lose some of the group of fans and run the risk of losing fandom. I don't think you maintain enough of the key tenets that fan interest would stay substantially the same. I'd go so far as to say I don't think fan interest would be even close. Of course, your mileage may vary and your reasons for following college sports may be different. But I think the gist of my point holds across most mileages.

So, in summary, I enjoy your posts. Keep 'em coming. At least for me. The legal battle is an interesting one to me, as was conference realignment. Deep topics with a labyrinth of complexity to navigate through. That said, if where you were going in your line of questioning was that we may have some ideas here that could, to some extent, "solve" the problem, well I am clearly not seeing it.

- Chillin

[crimsondevil]

My point is this: people say that there's plenty of athletic revenue out of which the $5,000/person can be paid. The university counters that by claiming that after subtracting the athletic expenses from the athletic revenue there's really nothing left, so the $5,000 can't be paid out of athletic revenues. The question is whether this is true or whether they have "padded" the athletic expenses to make it seem like they have already used up all the athletic revenues, or whether they have paid the coaching staff more than was necessary, giving the appearance that all the athletic revenue has already been used up.

Again, there may be a lot of revenue (for some schools), but there isn't any "leftover" money - it all gets spent, by definition, as a non-profit organization. To spend money on something either requires a new source of funds or cutting something else. I don't agree with Richard Berg's conclusions, but he's absolutely right to say it's really about priorities.


Universities don't use profit/loss accounting like for-profit entities do. But a for-profit entity, in order to determine whether a division of the company is profitable, will take the revenues of the division and subtract from them the expenses necessary to generate that revenue. MBB athletes might say the same thing. Take the basketball revenue and subtract the expenses necessary to generate that revenue (coach's salaries, gym maintenance, etc.) After you have done that, is there enough left to create a trust fund for the MBB athletes? If so, then they would say that we have enough revenue to do so and that it is appropriate to do so since that was an expense necessary to generate that revenue.

As you said, universities don't use profit/loss accounting. So why should they do this for revenue sports? Athletic departments do not suddenly become for-profit entities because they choose to pay players.


As far as the pot of gold from which we are going to fund archery, they would ask why we even have archery, and what claim archery has on MBB revenue. Why does archery have a claim on MBB revenue but the expenses of the chemistry lab are not a claim on MBB revenue? From what pot of gold are we going to fund the chemistry lab?

Why does archery NOT have a claim on MBB revenue? Chemistry could as well, for that matter, but archery is part of the same unit, the athletic department, so its claim is somewhat better, organizationally if not morally. Why is the revenue from basketball and football sancrosanct that it needs to be kept within the same team? This just makes no sense to me.

As people have said, there is no pot of gold to fund this, so it comes from something else. I agree with others who think wrestling, track, etc. are likely targets.


If that fund is limited then we need to decide our priorities and determine whether we want to have a chemistry lab or an archery team or pay the players. FIFY

[sagegrouse]

Again, there may be a lot of revenue (for some schools), but there isn't any "leftover" money - it all gets spent, by definition, as a non-profit organization. To spend money on something either requires a new source of funds or cutting something else. I don't agree with Richard Berg's conclusions, but he's absolutely right to say it's really about priorities.



As you said, universities don't use profit/loss accounting. So why should they do this for revenue sports? Athletic departments do not suddenly become for-profit entities because they choose to pay players.



Why does archery NOT have a claim on MBB revenue? Chemistry could as well, for that matter, but archery is part of the same unit, the athletic department, so its claim is somewhat better, organizationally if not morally. Why is the revenue from basketball and football sancrosanct that it needs to be kept within the same team? This just makes no sense to me.

As people have said, there is no pot of gold to fund this, so it comes from something else. I agree with others who think wrestling, track, etc. are likely targets.

FIFY

I haven't followed this subthread closely, but surely we aren't arguing over whether major universities with large athletic budgets (>$50 M) can afford to pay $5,000 extra to 100 players (roughly football plus hoops scholarships)? It's one percent or less of the budgets, and the management reserves are bigger than that for entities that large. Moreover, you can probably raise a bit more money given the intended use (directly to the players).

I think complaints from the bigger schools are cases of "crying wolf." For schools with much smaller budgets -- Furman, Citadel, SC State, Presbyterian, Wofford -- that's another matter entirely.

[Indoor66]

I haven't followed this subthread closely, but surely we aren't arguing over whether major universities with large athletic budgets (>$50 M) can afford to pay $5,000 extra to 100 players (roughly football plus hoops scholarships)? It's one percent or less of the budgets, and the management reserves are bigger than that for entities that large. Moreover, you can probably raise a bit more money given the intended use (directly to the players).

I think complaints from the bigger schools are cases of "crying wolf." For schools with much smaller budgets -- Furman, Citadel, SC State, Presbyterian, Wofford -- that's another matter entirely.

Another issue that seems to be being avoided is what about the other sports at the schools? Where do we draw the line or, even more important, can we draw the line in the day of equality and parity? Where does Title IX and its ramifications come into play? Has our need for a "pot" now increased to 200 athletes and $1 million or are we dealing with some other number? Or maybe we eliminate all sports other than those which pay for themselves. If so, how we pay for intramurals? Please tell me how this can or will work.

[swood1000]

First off, I've enjoyed reading your continued analysis of the legal battle here - so thank you. Your recent posts have taken a turn toward asking questions regarding opinions on certain hypothetical situations. I'm not sure I necessarily follow where you're going with these hypotheticals. But I'll play.


Originally Posted by swood1000
What would be wrong with limits on athletic spending or coaches salaries, so that all Division I programs would spend roughly the same amount, or up to a certain limit? It doesn't seem that that would destroy college athletics as we know it.

I am not proposing that there should be such a cap. Sagegrouse had said that the "de-emphasis of athletics" would destroy college athletics as we know it. I asked him what he meant by that and he said


Division II (partial scholarship) or Division III (no scholarship) models would qualify. also, limits on athletic spending, coaches salaries, etc.

I was disagreeing that this kind of a "de-emphasis" would have such a profound effect. (This is partially a by-product of the what-is-there-to-talk-about-in-the-off-season syndrome.)


Nothing would be "wrong" with it, but it would undeniably change the, let's call it, "marketplace." Marketplace for what? Marketplace for development of athletic skill. By imposing an artificial spending cap on the current framework (at the discretion of universities to decide where to make any required spending cuts within the program), do you agree that in theory my so-called marketplace will offer comparatively less to the athlete from which he can develop his skill. I think that point is more or less clear. The part that gets less clear is the ramifications of the "less"-ness. I'm sure many different possibilities could be envisioned, but I'll offer the first theory that pops into my head. It starts with the decreased resources that the spending cap produces, let's assume it's a somewhat significant decrease or at least not insignificant. So, for example, you'd have a scenario where if schools decide to reduce coaching salaries to stay under the cap, you'd presumably have some coaches departing for other places where they can make more money that isn't artificially capped. As such, coaching suffers.


OK, but take that super-sophisticated system Duke purchased to enable them to analyze each MBB player in tenth of a second increments. It's nice to have but not necessary. Take the staff of conditioning, diet, academic, etc. coaches. If you don't pay a conditioning coach $500,000 per year then you can't get a competent conditioning coach? Coaching salaries have expanded in response to the greater amount of money that is available now, but we had competent coaches before all that money was available, and players were content in the days before locker rooms looked like country clubs. It would no doubt be difficult to move back to those times now that they have had a taste of this.


Or apply the scenario I just hypothesized to any other spending stream: gyms, travel, workout facilities, etc. As a result of this, at least directionally I have to assume a subset of athletes will substitute away from the college route


But athletes are not going to leave college sports because the locker rooms don't look like country clubs. Neither did their high school locker rooms and they would have no expectation of such a thing if the big programs did not offer it. And if their workout facilities and conditioning coaches resembled what is available down at the Y, I don't think they would think it a sufficient reason to leave college.


and a new market will either be created or an existing market will increase in size which can absorb athletes that believe they have a chance to go professional (which is probably a much larger amount of athletes than actually does go pro) in order to maximize their potential via maximal facilities, coaching, etc.

The "new market" would look a lot like minor league baseball. It reminds me of when Michael Jordon left to play minor league baseball and ended up buying his team a new bus because the existing one was so uncomfortable. The minor league players are not swimming in luxury and ease. Nor do they receive extravagant salaries. Nor are they in the media spotlight, as many college basketball players are. Nor do their conditioning coaches get paid $500,000 per year. If I were a Duke MBB player who is on national television twice a week and who is constantly pursued by the media, it would take more than a cap on expenditures to make we want to switch to the minor league baseball model.


Now based on my hypothetical outlined above, and depending on the "not insignificant"-ness of any imposed cap, the playing pool may become considerably weaker. Enough so, that I would say it could absolutely "destroy college athletics as we know it." I won't say it would, but it absolutely could. Especially if the cap was so punitive that it was trying to level the playing field across the entirety of Division I.

Originally Posted by swood1000
Suppose we truly banished athletic scholarships. The quality of play would be reduced but to what level? To that of Nick Pagliuca? Would that really cause the fans to lose interest? Isn't it possible that it would increase fan interest since the players would seem more like "real students"?

This is a trickier one - and I'm not sure if it was meant as more of a follow up on the Ivy League question. But I agree the quality of play would be reduced. And I think there is a materially different level of quality that you are estimating by lumping Nick Pagliuca and Ryan Kelly into the same sentence, one a walk-on the other an NBA player.

What they share in common is that neither one needs an athletic scholarship in order to be accepted at and attend Duke. Both of Ryan Kelly's parents attended Ivy League schools and his academic aptitude showed it. People like Nick Pagliuca are excellent players, even though not up to the level of the best players.


Why would there be enough Ryan Kelly's to keep things interesting? If Ryan Kelly, the consensus #14 recruit in 2009 and 48th pick in the 2013 NBA Draft, found college basketball an attractive route to develop his presumably best money-earning skill despite either (a) not receiving a scholarship or (b) receiving less resources in the form of coaching / gyms / etc, I'd be pretty surprised. It's possible there would be some Ryan Kelly's that chose college in this new hypothetical you describe. But I can't agree that it would be "enough to keep it interesting."

I found college attractive enough to attend even though I did not receive an athletic scholarship. Both of Ryan Kelly's parents attended college without receiving an athletic scholarship, and like many of us he grew up with the expectation that he would attend college. (In any event, the true academic scholarship route might still be a possibility.) So on the plus side he (a) gets a Duke education, (b) pleases his parents, and (c) gets to play basketball for an elite program, constantly in the national media spotlight. On the down side he (a) has to pay for his college education like everyone else, (b) has to put up with training facilities similar to what is available at the Y, and (c) has to have a coach who doesn't demand millions of dollars of salary per year. (But wouldn't these be the same coaches in most cases? The NBA can absorb only so many coaches. Who else is going to be paying extravagant salaries?) Given these choices, do you think that Ryan Kelly would choose minor-league basketball, with its poor salaries and absence of media attention?


So, in my eyes, we're back to Nick Pagliuca. And yes, I think that would materially affect fan interest. Why? Because the allure of college basketball, to me and probably others, is a sweet spot. It's the intersection of reminiscence (for your college), nostalgia (for your younger days, perhaps playing a sport), excitement (of enjoying the actual sport), familiarity (of a product you've followed for many years, like I have and many of us on the board have), fandom (being part of a loyal group), relatability (for understanding that these are not professionals that are so incredible at their sport that it's nearly unbelievable), following (beginning to follow a player through the maturation process from teenager to adult to (sometimes) professional adult and following them through their career progression and throughout their life), and many other factors. If you give me Nick Pagliuca's on the court, I lose excitement because the sport is certainly less impressive and enjoyable when played at a lower level.

But look, do you find college basketball less enjoyable than pro basketball by reason of the fact that it is played at a lower level? I think that most people do not. Instead, they begin with lowered expectations but then find the game at least as enjoyable, and often more so since the college players often play with greater intensity and as if more is at stake.


I lose familiarity because you've altered my understanding of the product. I lose following because they ain't going professional anymore. And as a result of these, I will highly likely lose some of the group of fans and run the risk of losing fandom. I don't think you maintain enough of the key tenets that fan interest would stay substantially the same. I'd go so far as to say I don't think fan interest would be even close. Of course, your mileage may vary and your reasons for following college sports may be different. But I think the gist of my point holds across most mileages.

I think that fan interest would remain the same for the very reasons that fans like college sports - the players seem fresher and less jaded. There is an intensity in college games that is just missing in pro games.


So, in summary, I enjoy your posts. Keep 'em coming. At least for me.

Thanks. Appreciate the feedback!


The legal battle is an interesting one to me, as was conference realignment. Deep topics with a labyrinth of complexity to navigate through. That said, if where you were going in your line of questioning was that we may have some ideas here that could, to some extent, "solve" the problem, well I am clearly not seeing it.

No, I wasn't recommending this as a solution to the problem. But could it still be in our future? Currently the courts are saying that college basketball and football have to allow a limited type of delayed compensation to the players. There seems to be no question that those who won this battle do not intend to stop here. Suppose down the road they get a court to mandate a straightforward professional model for college sports, including salaries. There are those who believe that that would truly destroy the popularity of college sports (and with it the profitability). If you were faced with either (a) the straightforward professional model or (b) disallowing athletic scholarships and capping expenditures (don't ask me the legal reasoning that would produce only these two options) which one would you choose?

[lotusland]

I think stud ball players would have distant relatives who'd be willing to help them attend the university of Kentucky.

[swood1000]

Again, there may be a lot of revenue (for some schools), but there isn't any "leftover" money - it all gets spent, by definition, as a non-profit organization. To spend money on something either requires a new source of funds or cutting something else. I don't agree with Richard Berg's conclusions, but he's absolutely right to say it's really about priorities.

As you said, universities don't use profit/loss accounting. So why should they do this for revenue sports? Athletic departments do not suddenly become for-profit entities because they choose to pay players.

Why does archery NOT have a claim on MBB revenue? Chemistry could as well, for that matter, but archery is part of the same unit, the athletic department, so its claim is somewhat better, organizationally if not morally. Why is the revenue from basketball and football sancrosanct that it needs to be kept within the same team? This just makes no sense to me.

As people have said, there is no pot of gold to fund this, so it comes from something else. I agree with others who think wrestling, track, etc. are likely targets.

FIFY
Normally, since the mission of the university is education, expenses are judged by their effect on education. When a university program also generates revenue we look at the expense also in terms of its effect on the revenue. So if a faculty member makes a discovery and had an agreement with the university to share the proceeds of any new discovery, expenses related to patenting and marketing that discovery would be appropriate. Since those expenses have no direct educational purpose they are not justifiable if they exceed the amount of revenue that they are likely to produce.

You can say that "it all gets spent, by definition, as a non-profit organization," but in this situation the university has an asset like all the other assets in its investment portfolio, and has the responsibility to manage it in order to maximize revenue (consistent with its underlying educational mission), in order to realize a profit according to for-profit principles. For-profit principles require us to associate expenses with the revenues that they are intended produce. So since the costs of the archery program are not intended to maximize the revenue of the above discovery we don't subtract those expenses when determining whether or not the discovery will be profitable and should be developed.

So universities who for years conducted athletic programs for educational purposes suddenly found themselves in possession also of a revenue-generating asset. Expenditures can have both educational and revenue-generating purposes, and those that have only a revenue-generating purpose cannot be justified if they result in negative net revenue. Many people see the creation of trust funds for athletes as expenses having a revenue-generating purpose. As such, they can be justified only if they do not exceed the revenue. Otherwise, an educational purpose must be found.

[swood1000]

I haven't followed this subthread closely, but surely we aren't arguing over whether major universities with large athletic budgets (>$50 M) can afford to pay $5,000 extra to 100 players (roughly football plus hoops scholarships)? It's one percent or less of the budgets, and the management reserves are bigger than that for entities that large. Moreover, you can probably raise a bit more money given the intended use (directly to the players).

I think complaints from the bigger schools are cases of "crying wolf." For schools with much smaller budgets -- Furman, Citadel, SC State, Presbyterian, Wofford -- that's another matter entirely.
As I see it, the question is not whether the major universities can afford to spend $500,000 per year. Here are some of the arguments (many of them from the NCAA court brief):


This gives the majors yet another advantage over the schools who can't afford this and who, thus, will be out of the market (even more than they currently are) for these players, further concentrating the talent within a small group of schools.
This will have the effect of forcing athletes to sit on the bench of the major university, who might otherwise have chosen to play for one of the smaller schools.
This is just professionalism getting its foot in the door - how long will they be satisfied to keep it at $5,000? Once we have allowed this, what principle prevents greater and greater compensation and a race to the bottom?
The rules as they exist promote competitive balance among schools.
Amateurism

Introducing pay-for-play will fundamentally change how athletes approach the sport, and cause fans to lose interest, in a manner similar to the lack of interest in minor league baseball.
The commercial side of college sports, as it has for over a century, exerts pressures that could undermine college sports' nature and value as a component of the educational experience, by driving college sports away from higher education and towards professionalization. The NCAA thus remains committed to the principle of amateurism, the "basic purpose" of which "is to maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body and, by so doing, retain a clear line of demarcation between intercollegiate athletics and professional sports."
Student participation in intercollegiate athletics is an avocation, and student-athletes should be protected from exploitation by professional and commercial enterprises.
Integrating student-athletes into the academic community improves their educational experience. Full participation in that experience-not just meeting academic requirements, but also studying, interacting with faculty and diverse classmates, and receiving academic support such as tutoring and mentoring-generally leads student-athletes, especially those from disadvantaged backgrounds, to reap more from their education, including enjoying higher graduation rates and better job prospects. It also creates a unique experience that many young men and women seek-one that combines athletics, academics, and a shared sense of tradition, community, and mission. Such payments might also "create a wedge" between them and their classmates. The NCAA's strategy has been successful; for example, most FBS football players and Division I men's basketball players see themselves as part of their school's educational community.
According to the trial court, a world in which student-athletes receive deferred payments and a further amount that the court incorrectly labeled "grant-in-aid" is good enough to preserve amateurism. But Those who are paid to play are not amateurs, whether they are paid $30,000 or $300,000; the courts are not free to simply redefine the essential procompetitive characteristics of products (and principles).
Intercollegiate sports involve contests between amateur student representatives of competing schools, not contestants playing as a job, i.e., professionals. The NCAA's commitment to collegiate athletics as an amateur endeavor creates a distinct game that many fans enjoy as such. Paying the athletes will reduce the popularity of the sport.
The NCAA's commitment to amateur collegiate athletics makes available the only opportunity that young men and women have to obtain a college education while playing competitive sports as students.


The NCAA and its members, not the courts, should get to establish the rules of the athletic competitions they sponsor, including who is eligible to play. That is what it means to sponsor a distinct form of competition. Are we going to have every eligibility rule challenged in court and approved or modified by a judge?
The Supreme Court said in the case of NCAA v. Board of Regents (1984):

that the NCAA "needs ample latitude" to protect amateurism in intercollegiate sports.
that "identification of [the NCAA's] 'product' with an academic tradition differentiates college [sports] from and makes it more popular than professional sports to which it might otherwise be comparable"; that "[i]n order to preserve the character and quality of the 'product,' athletes must not be paid"; and that by maintaining such amateurism rules, the NCAA's "actions widen consumer choice … and hence can be viewed as procompetitive."
that by "differentiat[ing] college [sports] from … professional sports," amateurism "widen[s] consumer choice-not only [for] … fans but also [for] … athletes."
that "the preservation of the student-athlete in higher education … is entirely consistent with the goals of the Sherman Act."
that the NCAA "plays a critical role in the maintenance of a revered tradition of amateurism in college sports."
that "the NCAA plays a vital role in enabling college football to preserve its character, and as a result enables a product to be marketed which might otherwise be unavailable." In doing so, it "widen[s] consumer choice-not only the choices available to sports fans but also those available to athletes-and hence can be viewed as procompetitive." Indeed, the Court admonished, "[t]here can be no question but that … the preservation of the student-athlete in higher education … is entirely consistent with the goals of the Sherman Act."


This case is in the 9th Circuit Court of Appeals. According to the 7th Circuit Court of Appeals, "Rather than intending to provide the NCAA with a commercial advantage," the court reasoned, "the eligibility rules primarily seek to ensure fair competition in intercollegiate athletics."

[swood1000]

Another issue that seems to be being avoided is what about the other sports at the schools? Where do we draw the line or, even more important, can we draw the line in the day of equality and parity? Where does Title IX and its ramifications come into play? Has our need for a "pot" now increased to 200 athletes and $1 million or are we dealing with some other number? Or maybe we eliminate all sports other than those which pay for themselves. If so, how we pay for intramurals? Please tell me how this can or will work.
Some non-revenue generating sports are mandated by the NCAA for any school that wishes to participate in Division I athletics. As such, without them there can't be any revenue sports. I guess that gives them a special right to be supported by the revenue sports. As for those those sports not mandated (e.g. archery) the question would seem to be the same as the traditional one asked of every university program that does not generate revenue: whether it is deemed to provide sufficient educational value.

[sagegrouse]

As I see it, the question is not whether the major universities can afford to spend $500,000 per year. Here are some of the arguments (many of them from the NCAA court brief):


This gives the majors yet another advantage over the schools who can't afford this and who, thus, will be out of the market (even more than they currently are) for these players, further concentrating the talent within a small group of schools.
This will have the effect of forcing athletes to sit on the bench of the major university, who might otherwise have chosen to play for one of the smaller schools.
This is just professionalism getting its foot in the door - how long will they be satisfied to keep it at $5,000? Once we have allowed this, what principle prevents greater and greater compensation and a race to the bottom?
The rules as they exist promote competitive balance among schools.
Amateurism

Introducing pay-for-play will fundamentally change how athletes approach the sport, and cause fans to lose interest, in a manner similar to the lack of interest in minor league baseball.
The commercial side of college sports, as it has for over a century, exerts pressures that could undermine college sports' nature and value as a component of the educational experience, by driving college sports away from higher education and towards professionalization. The NCAA thus remains committed to the principle of amateurism, the "basic purpose" of which "is to maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body and, by so doing, retain a clear line of demarcation between intercollegiate athletics and professional sports."
Student participation in intercollegiate athletics is an avocation, and student-athletes should be protected from exploitation by professional and commercial enterprises.
Integrating student-athletes into the academic community improves their educational experience. Full participation in that experience-not just meeting academic requirements, but also studying, interacting with faculty and diverse classmates, and receiving academic support such as tutoring and mentoring-generally leads student-athletes, especially those from disadvantaged backgrounds, to reap more from their education, including enjoying higher graduation rates and better job prospects. It also creates a unique experience that many young men and women seek-one that combines athletics, academics, and a shared sense of tradition, community, and mission. Such payments might also "create a wedge" between them and their classmates. The NCAA's strategy has been successful; for example, most FBS football players and Division I men's basketball players see themselves as part of their school's educational community.
According to the trial court, a world in which student-athletes receive deferred payments and a further amount that the court incorrectly labeled "grant-in-aid" is good enough to preserve amateurism. But Those who are paid to play are not amateurs, whether they are paid $30,000 or $300,000; the courts are not free to simply redefine the essential procompetitive characteristics of products (and principles).
Intercollegiate sports involve contests between amateur student representatives of competing schools, not contestants playing as a job, i.e., professionals. The NCAA's commitment to collegiate athletics as an amateur endeavor creates a distinct game that many fans enjoy as such. Paying the athletes will reduce the popularity of the sport.
The NCAA's commitment to amateur collegiate athletics makes available the only opportunity that young men and women have to obtain a college education while playing competitive sports as students.


The NCAA and its members, not the courts, should get to establish the rules of the athletic competitions they sponsor, including who is eligible to play. That is what it means to sponsor a distinct form of competition. Are we going to have every eligibility rule challenged in court and approved or modified by a judge?
The Supreme Court said in the case of NCAA v. Board of Regents (1984):

that the NCAA "needs ample latitude" to protect amateurism in intercollegiate sports.
that "identification of [the NCAA's] 'product' with an academic tradition differentiates college [sports] from and makes it more popular than professional sports to which it might otherwise be comparable"; that "[i]n order to preserve the character and quality of the 'product,' athletes must not be paid"; and that by maintaining such amateurism rules, the NCAA's "actions widen consumer choice … and hence can be viewed as procompetitive."
that by "differentiat[ing] college [sports] from … professional sports," amateurism "widen[s] consumer choice-not only [for] … fans but also [for] … athletes."
that "the preservation of the student-athlete in higher education … is entirely consistent with the goals of the Sherman Act."
that the NCAA "plays a critical role in the maintenance of a revered tradition of amateurism in college sports."
that "the NCAA plays a vital role in enabling college football to preserve its character, and as a result enables a product to be marketed which might otherwise be unavailable." In doing so, it "widen[s] consumer choice-not only the choices available to sports fans but also those available to athletes-and hence can be viewed as procompetitive." Indeed, the Court admonished, "[t]here can be no question but that … the preservation of the student-athlete in higher education … is entirely consistent with the goals of the Sherman Act."


This case is in the 9th Circuit Court of Appeals. According to the 7th Circuit Court of Appeals, "Rather than intending to provide the NCAA with a commercial advantage," the court reasoned, "the eligibility rules primarily seek to ensure fair competition in intercollegiate athletics."


#1. What's new? Actually, I think we will be surprised how many Div 1A and 1AA schools will come up with the money.
#2. Seems like pettifoggery to me, but then I don't know what that means -- I just like to use the word. I wonder how many recruits are viewed as unlikely to play by the coaches. In my era, the guys I knew who got scholarships but didn't play much in college hated college football -- it was pretty brutal.
#3. "Foot in the door" -- heck it's been in the door as long as there are athletic scholarships. I can remember when British athletes couldn't accept athletic scholarships to American universities because they would lose their amateur status.
#4. "Competitive balance" argument seems weak to me.
#5. Looks to be the meat of the arguments against.
#6. "NCAA should get to set its own rules." Depends on the law, doesn't it? Can't comment.

[swood1000]

#3. "Foot in the door" -- heck it's been in the door as long as there are athletic scholarships. I can remember when British athletes couldn't accept athletic scholarships to American universities because they would lose their amateur status.
Yes, but we're crossing an important line here when we move from trying to make sure that college athletics is not a net negative out-of-pocket experience to it becoming a positive into-the-pocket experience. Although a college education certainly has value it is far different from being paid money. Furthermore, since the NCAA requires SAs to be students, by not charging tuition the school is simply taking care of an expense that the SA would not have had if he had not been recruited, thus keeping him in his original financial position. Once we cross the line and say that a small indirect payment is OK, where does it stop?

[swood1000]

2. This will have the effect of forcing athletes to sit on the bench of the major university, who might otherwise have chosen to play for one of the smaller schools.
#2. Seems like pettifoggery to me, but then I don't know what that means -- I just like to use the word. I wonder how many recruits are viewed as unlikely to play by the coaches. In my era, the guys I knew who got scholarships but didn't play much in college hated college football -- it was pretty brutal.
SAs know up-front (or can guess) what the likelihood is that they will get much playing time. Is it better to sit on the bench at Duke or to play at the school with the lesser program? Once optional payments are authorized, which Duke is willing to pay but the other school may not be able (or willing) to pay, then to choose the other school carries a $30,000 penalty. So the money forces him to sit when otherwise he would have chosen to play. And there may be other reasons the SA might have chosen the other school (educational, cultural, family, distance from home, friends attending) but the money incentive becomes too powerful. The NCAA has already opened the door to this kind of differential by deciding to allow optional cost-of-attendance payments, which are meant to cover incidental expenses that the SA would not have had if he had not been recruited, but adding potentially a $30,000 additional differential will have the effect of supplanting many of the traditional considerations in choosing a college, and forcing the SA to sell out.

[sagegrouse]

SAs know up-front (or can guess) what the likelihood is that they will get much playing time. Is it better to sit on the bench at Duke or to play at the school with the lesser program? Once optional payments are authorized, which Duke is willing to pay but the other school may not be able (or willing) to pay, then to choose the other school carries a $30,000 penalty. So the money forces him to sit when otherwise he would have chosen to play. And there may be other reasons the SA might have chosen the other school (educational, cultural, family, distance from home, friends attending) but the money incentive becomes too powerful. The NCAA has already opened the door to this kind of differential by deciding to allow optional cost-of-attendance payments, which are meant to cover incidental expenses that the SA would not have had if he had not been recruited, but adding potentially a $30,000 additional differential will have the effect of supplanting many of the traditional considerations in choosing a college, and forcing the SA to sell out.

swood1000, I don't have a particular view on whether this is good for college athletics or not. As to recruiting players to sit on the bench for four years, I don't think it happens very often. It used to in the years before scholarship limits. I can remember Darrell Royal at Texas admitting that UT took players they didn't need so they wouldn't have to play against them. The limit of 82 scholarships for football ended that practice. In hoops at Duke, Andre Buckner was recruited as a practice player; Justin Robinson isn't the same case, although that may be his limit. You have to think that the late growth pattern of his seven-foot, HOF father had something to do with his recruitment.

[swood1000]

I think stud ball players would have distant relatives who'd be willing to help them attend the university of Kentucky.
Right, there would be all kinds of ways around the prohibition of athletic scholarships. One of the more common would probably be the college loan, which is then forgiven after college. They have rules currently against payments disguised as loans, which are easy to spot because they are of the type that college students ordinarily do not take out and which lenders ordinarily do not grant. However, loans to attend college are commonplace and could not be prohibited.

[swood1000]

As to recruiting players to sit on the bench for four years, I don't think it happens very often.
True but there are players who come to Duke expecting that they are going to get little if any playing time their freshman and maybe sophomore years, and knowing that they are not assured of extensive play thereafter. They come for reasons they find sufficient. It would be regrettable if those choices were being made for trust fund reasons.

[swood1000]

#1. What's new? Actually, I think we will be surprised how many Div 1A and 1AA schools will come up with the money.I'm not so sure that the Court of Appeals/Supreme Court is going to uphold this. The trial judge's decision seems to be just a little too far removed from principles that the Supreme Court laid down only thirty years ago in NCAA v. Board of Regents. The trial judge ignored that statement of principles (which supports the NCAA's current position) saying that "times have changed" and also saying that those statements by the Supreme Court in 1986 were "dicta" (incidental statements made by a court in deciding a case, upon a matter not essential to the decision, and therefore not binding as precedent). The NCAA countered by claiming the statements were not dicta and that "times have changed" is not a question for the trial court to decide. The trial judge's decision departs as well as from the position held by many other federal courts.

[Olympic Fan]

Another issue that seems to be being avoided is what about the other sports at the schools? Where do we draw the line or, even more important, can we draw the line in the day of equality and parity? Where does Title IX and its ramifications come into play? Has our need for a "pot" now increased to 200 athletes and $1 million or are we dealing with some other number? Or maybe we eliminate all sports other than those which pay for themselves. If so, how we pay for intramurals? Please tell me how this can or will work.

Title IX is federal law and it mandates that every woman's scholarship athlete receives exactly the same compensation as any male athlete. The courts have never been willing to acknowledge that there's a difference in revenue and non-revenue sports under Title IX.

So any benefit for football/men's basketball would have to be duplicated on the women's side -- greatly increasing the cost of the new additions.

[swood1000]

Title IX is federal law and it mandates that every woman's scholarship athlete receives exactly the same compensation as any male athlete. The courts have never been willing to acknowledge that there's a difference in revenue and non-revenue sports under Title IX.

So any benefit for football/men's basketball would have to be duplicated on the women's side -- greatly increasing the cost of the new additions.
There seems to be quite a bit of disagreement as to whether pay-for-play will have Title IX implications. For example:

Yes: http://espn.go.com/college-sports/st...lege-athletics (http://espn.go.com/college-sports/story/_/id/6769337/title-ix-seen-substantial-roadblock-pay-play-college-athletics) and http://digitalcommons.law.wne.edu/cg...ntext=facschol (http://digitalcommons.law.wne.edu/cgi/viewcontent.cgi?article=1312&context=facschol)

No: http://www.forbes.com/sites/marcedel...pink-elephant/ (http://www.forbes.com/sites/marcedelman/2014/02/04/when-it-comes-to-paying-college-athletes-is-title-ix-more-of-a-red-herring-than-a-pink-elephant/) and http://scholarship.law.marquette.edu...text=sportslaw (http://scholarship.law.marquette.edu/cgi/viewcontent.cgi?article=1560&context=sportslaw)

[Indoor66]

There seems to be quite a bit of disagreement as to whether pay-for-play will have Title IX implications. For example:

Yes: http://espn.go.com/college-sports/st...lege-athletics (http://espn.go.com/college-sports/story/_/id/6769337/title-ix-seen-substantial-roadblock-pay-play-college-athletics) and http://digitalcommons.law.wne.edu/cg...ntext=facschol (http://digitalcommons.law.wne.edu/cgi/viewcontent.cgi?article=1312&context=facschol)

No: http://www.forbes.com/sites/marcedel...pink-elephant/ (http://www.forbes.com/sites/marcedelman/2014/02/04/when-it-comes-to-paying-college-athletes-is-title-ix-more-of-a-red-herring-than-a-pink-elephant/) and http://scholarship.law.marquette.edu...text=sportslaw (http://scholarship.law.marquette.edu/cgi/viewcontent.cgi?article=1560&context=sportslaw)

If you think that there wouldn't be Title IX ramifications you live in a different world than I do.

[swood1000]

Title IX is federal law and it mandates that every woman's scholarship athlete receives exactly the same compensation as any male athlete. The courts have never been willing to acknowledge that there's a difference in revenue and non-revenue sports under Title IX.

So any benefit for football/men's basketball would have to be duplicated on the women's side -- greatly increasing the cost of the new additions.

Title IX (http://www.dol.gov/oasam/regs/statutes/titleix.htm) states that "[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance." It seems to me that if we are to be paying college athletes, then basing the pay on the amount of revenue that is generated by that athlete's sport would not be discriminating on the basis of sex, especially since many male athletes also would receive no payment.

[swood1000]

If you think that there wouldn't be Title IX ramifications you live in a different world than I do.How does basing athlete pay on the revenue generated by the sport constitute discrimination on the basis of sex? It's discrimination on the basis of revenue generation.

[Indoor66]

How does basing athlete pay on the revenue generated by the sport constitute discrimination on the basis of sex? It's discrimination on the basis of revenue generation.

Just wait for the screamin' howler monkeys to come out of the woodwork.

[swood1000]

Just wait for the screamin' howler monkeys to come out of the woodwork.
I have no doubt. But what argument will they make that will be accepted by the courts?

[swood1000]

If you think that there wouldn't be Title IX ramifications you live in a different world than I do.
It seems that male coaches get paid more than female (http://www.nytimes.com/2012/04/03/sports/ncaabasketball/pay-for-womens-basketball-coaches-lags-far-behind-mens-coaches.html?pagewanted=all&_r=1), and this has not so far been declared sex discrimination.

[swood1000]

So here we are July 29, 2015, with the injunction allowing $5,000 per athlete payments into a trust fund set to go into effect August 1. The NCAA has requested (http://cdn.ca9.uscourts.gov/datastore/general/2015/07/27/14-16601%20motion%207-17.pdf) that the Court of Appeals stay the injunction until it has issued its decision on the appeal. The other side has, of course, denied that a stay is warranted (http://cdn.ca9.uscourts.gov/datastore/general/2015/07/27/14-16601%20response%207-27.pdf). In order to stay an injunction four factors are considered:


whether the stay applicant has made a strong showing that he is likely to succeed on the merits;
whether the applicant will be irreparably injured absent a stay;
whether issuance of the stay will substantially injure the other parties interested in the proceeding; and
where the public interest lies.

If the Court of Appeals grants the stay, then, it will mean that the court believes that the NCAA is likely to win its appeal. It would be kind of like the situation last year when federal courts were ordering states to allow same-sex marriages and the Supreme Court refused to stay those orders, giving us a forecast of its eventual ruling that laws against same-sex marriage were unconstitutional.

So in the next few days the Court of Appeals will grant or deny the request for a stay of the injunction and we will discover the likely outcome of the appeal (although it could then be appealed to the Supreme Court).

[swood1000]

So here we are July 29, 2015, with the injunction allowing $5,000 per athlete payments into a trust fund set to go into effect August 1. The NCAA has requested (http://cdn.ca9.uscourts.gov/datastore/general/2015/07/27/14-16601%20motion%207-17.pdf) that the Court of Appeals stay the injunction until it has issued its decision on the appeal. The other side has, of course, denied that a stay is warranted (http://cdn.ca9.uscourts.gov/datastore/general/2015/07/27/14-16601%20response%207-27.pdf). In order to stay an injunction four factors are considered:


whether the stay applicant has made a strong showing that he is likely to succeed on the merits;
whether the applicant will be irreparably injured absent a stay;
whether issuance of the stay will substantially injure the other parties interested in the proceeding; and
where the public interest lies.

If the Court of Appeals grants the stay, then, it will mean that the court believes that the NCAA is likely to win its appeal. It would be kind of like the situation last year when federal courts were ordering states to allow same-sex marriages and the Supreme Court refused to stay those orders, giving us a forecast of its eventual ruling that laws against same-sex marriage were unconstitutional.

So in the next few days the Court of Appeals will grant or deny the request for a stay of the injunction and we will discover the likely outcome of the appeal (although it could then be appealed to the Supreme Court).
The legal briefs are still flying. For those of you who are glad you didn't become lawyers I'll just provide one more detail in order to reassure you of the correctness of your decision. The NCAA claims (http://cdn.ca9.uscourts.gov/datastore/general/2015/07/29/14-16601%207-28%20Reply.pdf) that making a "strong showing" that it is likely to succeed on the merits can be accomplished even when it has less than a 50% chance of success, so its burden is lower than the other side might suggest, and that the Court of Appeals should grant the stay because it just maintains the status quo, which has been in place for decades. The other side argues that the NCAA has a 'heavy burden.' Maybe all we can say is that the refusal to grant a stay would indicate that the NCAA is likely to lose its appeal.

[swood1000]

There apparently are many who believe that most “amateur” athletes take money surreptitiously and avoid penalties. In a recent nationally syndicated cartoon, "The Small Society," one character is asked, "What is the difference between an amateur and professional athlete?" His reply was that "the pros get paid by check."

How many posters here believe that in Division I MBB today there is a significant amount of money, beyond the officially approved benefits, finding its way into the pockets of players or their families (including payments to be delivered after the athlete turns pro)? The argument is that it's happening anyway and we might as well be honest about it.

[-jk]

There apparently are many who believe that most “amateur” athletes take money surreptitiously and avoid penalties. In a recent nationally syndicated cartoon, "The Small Society," one character is asked, "What is the difference between an amateur and professional athlete?" His reply was that "the pros get paid by check."

How many posters here believe that in Division I MBB today there is a significant amount of money, beyond the officially approved benefits, finding its way into the pockets of players or their families (including payments to be delivered after the athlete turns pro)? The argument is that it's happening anyway and we might as well be honest about it.

I suspect it's still the exception in D1 and pretty much non-existent in the rest of the ncaa. There are some schools where it might not be, though.

-jk

[Lar77]

I suspect it's still the exception in D1 and pretty much non-existent in the rest of the ncaa. There are some schools where it might not be, though.

-jk

I agree.

Differing perceptions have a lot to do with it. $60k tuition is a lot of money for the right to go to class, but an 18 year old might not appreciate the difference between that and free public high school. But give that same kid $5,000 in cash - that can be big.

[swood1000]

I agree.

Differing perceptions have a lot to do with it. $60k tuition is a lot of money for the right to go to class, but an 18 year old might not appreciate the difference between that and free public high school. But give that same kid $5,000 in cash - that can be big.
The trial court in O'Bannon believed that by putting the $5,000 in trust and not making it available until the student-athlete is no longer a student, it no longer has the same feel as an in-hand $5,000 payment, and that this insulates the transaction from some of the issues that come with professionalism. But no doubt SAs will receive periodic financial reports showing interest earned, etc. I don't know how others feel, but when I look at financial statements showing the contents of my savings accounts it feels like real money to me, even if I can't get at it immediately. Also, if the student-athlete is certain to receive an amount in no more than X years there would be many people willing to pay him the discounted present value in exchange for transferring the right to receive the money in the future.

[bob blue devil]

The trial court in O'Bannon believed that by putting the $5,000 in trust and not making it available until the student-athlete is no longer a student, it no longer has the same feel as an in-hand $5,000 payment, and that this insulates the transaction from some of the issues that come with professionalism. But no doubt SAs will receive periodic financial reports showing interest earned, etc. I don't know how others feel, but when I look at financial statements showing the contents of my savings accounts it feels like real money to me, even if I can't get at it immediately. Also, if the student-athlete is certain to receive an amount in no more than X years there would be many people willing to pay him the discounted present value in exchange for transferring the right to receive the money in the future.

Right. And imagine the outcry with the first hardship story.

[grad_devil]

I think I just saw that the NCAA stay was granted.

It was from bleacher report, so take it for what you will.

Edit:

Here (http://collegebasketballtalk.nbcsports.com/2015/07/31/ncaas-request-for-stay-of-injunction-in-obannon-lawsuit-granted/) is a slightly more reputable source reporting that the courts have granted a 1 week stay of the injunction.

[swood1000]

Here is the language the court used (http://cdn.ca9.uscourts.gov/datastore/general/2015/07/31/14-16601%207-31%20Order.pdf):

Without expressing a view as to either party’s likelihood of success on the merits, the court grants a stay of the district court’s injunction in this case, dated August 8, 2014, to preserve the status quo until this court’s mandate has issued.Not sure where the "one week" came from. Maybe they misread it to say that there was a stay until August 8, 2015.

[swood1000]

They said they were not expressing a view as to either party's likelihood of success on the merits. Nevertheless, to grant the stay the court had to find that the NCAA


made a strong showing that [it] is likely to succeed on the merits...All of these formulations indicate that, "at a minimum," a petitioner must show that there is a "substantial case for relief on the merits." ...The standard does not require the petitioners to show that "it is more likely than not that they will win on the merits." http://www.leagle.com/decision/In%20FCO%2020121016216.xml/LAIR%20v.%20BULLOCK;

[lotusland]

There apparently are many who believe that most “amateur” athletes take money surreptitiously and avoid penalties. In a recent nationally syndicated cartoon, "The Small Society," one character is asked, "What is the difference between an amateur and professional athlete?" His reply was that "the pros get paid by check."

How many posters here believe that in Division I MBB today there is a significant amount of money, beyond the officially approved benefits, finding its way into the pockets of players or their families (including payments to be delivered after the athlete turns pro)? The argument is that it's happening anyway and we might as well be honest about it.
http://www.sbnation.com/college-football/2014/4/10/5594348/college-football-bag-man-interview

This article about and unamed SEC "bag man" is over a year old but I found it illuminating. I'm inclined to believe that nearly all, if not all, SEC football programs have boosters who perform this role. Ditto for any program that has a rabid fan base including some boosters who's identity is a little too tied up in the ball team. Boosters with cash-intensive businesse who are willing to part with $5K-$25K a year in exchange for feeling like part of the team. I think we've seen glimpses of this at UNC with Fat's cars, the mouth guards, etc.

After ruminatig on this article for a few months I decided that it's not entirely bad. Because the payments are made so that there can never be any evidence other than one person's word against another, you're not talking about millions or even hundreds of thousands of dollars over the course of a player's career.


Rather than dole out large sums of money, the bag man usually prefers to hand over frequent payments of $200 to $500. It prevents the player from overspending, losing the money or getting robbed, and ...

"I don't like to run around with thousands in cash on my person, either. This isn't 'Scarface.'"

So I'd be in favor of player stipends but not allowing players to go to the highest bidder whether it be a booster or endorsement company. I'd prefer the bag man to either.

[cspan37421]

Just a reminder ...

every person, whether athlete or laborer, cheats our country - and by extension, all of us - if they don't pay taxes on their income.

And I'm guessing that money from "bag men" etc. isn't declared as income.

Perhaps not all, or even many, are bothered by this. But I am.

And I expect cheating on taxes has other corrosive effects on character and behavior. It's not a victimless crime.

[swood1000]

http://www.sbnation.com/college-football/2014/4/10/5594348/college-football-bag-man-interview

This article about and unamed SEC "bag man" is over a year old but I found it illuminating. I'm inclined to believe that nearly all, if not all, SEC football programs have boosters who perform this role. Ditto for any program that has a rabid fan base including some boosters who's identity is a little too tied up in the ball team. Boosters with cash-intensive businesse who are willing to part with $5K-$25K a year in exchange for feeling like part of the team. I think we've seen glimpses of this at UNC with Fat's cars, the mouth guards, etc.

After ruminatig on this article for a few months I decided that it's not entirely bad. Because the payments are made so that there can never be any evidence other than one person's word against another, you're not talking about millions or even hundreds of thousands of dollars over the course of a player's career.

So I'd be in favor of player stipends but not allowing players to go to the highest bidder whether it be a booster or endorsement company. I'd prefer the bag man to either.
By 'stipends' do you mean the $2,000-4,000 cost-of-attendance payments? (The amount of the payment for each school can be found by going to http://www.collegedata.com/ and typing in the name of the school. After hitting enter put the cursor over the school name and select Money Matters. The COA figure is apparently the 'Other Expenses' amount.) I guess that one problem with this is that it doesn't put a stop to the "bag man" but only supplements that source. From a university cost standpoint it seems pretty clear that Title IX would require equal COA amounts to be paid to all student-athletes, whereas the O'Bannon-type payments into trust would seem to have a decent chance of being considered of the type that could be limited to the sports that generate a profit.

[swood1000]

From a university cost standpoint it seems pretty clear that Title IX would require equal COA amounts to be paid to all student-athletes, whereas the O'Bannon-type payments into trust would seem to have a decent chance of being considered of the type that could be limited to the sports that generate a profit.
Maybe this is one reason that NCAA Division I board of directors chairman Harris Pastides said (http://www.cbssports.com/collegefootball/writer/jon-solomon/25200396/top-ncaa-board-member-doesnt-want-obannon-appealed-to-supreme-court-) he is not inclined to have the NCAA try to get the US Supreme Court to hear the Ed O'Bannon case if the 9th US Circuit Court of Appeals rules unfavorably against the association. If they really only want to supplement the athletes in the revenue sports the O'Bannon-type payments could give them some cover for that whereas COA payments probably couldn't be so restricted because of Title IX. Maybe they think that they could keep the O'Bannon payment amounts under control, and somewhere near the amount that COA payments would be. Maybe some of the schools that begin making COA payments this coming year will stop doing that if O'Bannon is finally confirmed.

Edit: On the other hand, the schools that continue making the COA payments would then have an advantage with the revenue sport athletes, especially since COA payments are in-hand now.

[swood1000]

The 9th Circuit Court of Appeals finally came out with their opinion today, which reversed (http://cdn.ca9.uscourts.gov/datastore/general/2015/09/30/14-16601%20Opinion.pdf) the trial court on the question of whether schools could pay student-athletes up to $5,000 per year in deferred compensation, to be held in trust until after they leave college. They affirmed the trial court on the question of allowing schools to give scholarships up to the full cost of attendance. The court's summary:


After a bench trial and in a thorough opinion, the district court concluded that the NCAA’s compensation rules were an unlawful restraint of trade. It then enjoined the NCAA from prohibiting its member schools from giving student-athletes scholarships up to the full cost of attendance at their respective schools and up to $5,000 per year in deferred compensation, to be held in trust for student-athletes until after they leave college. As far as we are aware, the district court’s decision is the first by any federal court to hold that any aspect of the NCAA’s amateurism rules violate the antitrust laws, let alone to mandate by injunction that the NCAA change its practices.

We conclude that the district court’s decision was largely correct. Although we agree with the Supreme Court and our sister circuits that many of the NCAA’s amateurism rules are likely to be procompetitive, we hold that those rules are not exempt from antitrust scrutiny; rather, they must be analyzed under the Rule of Reason. Applying the Rule of Reason, we conclude that the district court correctly identified one proper alternative to the current NCAA compensation rules—i.e., allowing NCAA members to give scholarships up to the full cost of attendance—but that the district court’s other remedy, allowing students to be paid cash compensation of up to $5,000 per year, was erroneous. We therefore affirm in part and reverse in part.

Still reading the opinion...

[swood1000]

The Court of Appeals on the payments into trust that had been allowed by the district (trial) court:


Both we and the district court agree that the NCAA's amateurism rule has procompetitive benefits. But in finding that paying students cash compensation would promote amateurism as effectively as not paying them, the district court ignored that not paying student-athletes is precisely what makes them amateurs. ...

The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap. Once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point; we have little doubt that plaintiffs will continue to challenge the arbitrary limit imposed by the district court until they have captured the full value of their NIL [names, images, and likenesses]. At that point the NCAA will have surrendered its amateurism principles entirely and transitioned from its "particular brand of football" to minor league status.

[TampaDuke]

Interesting decision (https://assets.documentcloud.org/documents/2435988/obannoncaseruling.pdf). At first blush, I'd imagine that the NCAA is more pleased than the plaintiffs, even though the Court rejected the NCAA's argument that the antitrust laws essentially don't apply to it.

Of note, as summarized by the court, at p. 63 of the opinion:


The [antitrust law] requires that the NCAA permit its schools to provide up to the cost of attendance to their student athletes. It does not require more.

So, essentially the NCAA must continue to allow what it already implemented awhile back (full cost grant in aid scholarships), but it can prohibit schools from paying additional cash payments.

I would think the plaintiffs will ask for either a rehearing by the full Ninth Circuit or will seek to appeal to the Supreme Court, or both.

I'm not sure the NCAA would want to appeal, since they can likely live with the result and any appeal might result in the original trial court decision being upheld in full. That said, there is some language in the opinion which seems (to me at least) to suggest that the NCAA might have a more difficult time prohibiting certain other benefits, such as cash payments made by someone other than the school itself.

[Nugget]

Interesting decision (https://assets.documentcloud.org/documents/2435988/obannoncaseruling.pdf). At first blush, I'd imagine that the NCAA is more pleased than the plaintiffs, even though the Court rejected the NCAA's argument that the antitrust laws essentially don't apply to it.

Having read it, I tend to agree that the NCAA would view this decision as very favorable to them -- much "less bad" than it could have been.

The Ninth Circuit adopted/applied/reaffirmed the continuing validity of the Supreme Court's decision 30 years ago in Board of Regents that the restraints are subject to the Rule of Reason, rather the rule of "per se" illegality generally applicable to this type of price-fixing between horizontal competitors.

The Ninth Circuit also reaffirmed Board of Regents acceptance of promoting amateurism as a "pro-competitive justification" under the Rule of Reason (and that much of the value of the collegiate sports market is exactly because the players aren't paid and that this is not the equivalent of MLB's minor leagues).

And, the heart of the rationale for the ruling overturning the decision allowing a $5,000 trust payment for name/likeness rights for video games would, seemingly, apply to the far more threatening to the NCAA question of whether in a subsequent suit players could challenge for a right to a share of the TV contracts, which I'll quote at length (taking out the case citations):

“The third step in the Rule of Reason analysis is whether there are substantially less restrictive alternatives to the NCAA’s current rules. We bear in mind that—to be viable under the Rule of Reason—an alternative must be ‘virtually as effective’ in serving the procompetitive purposes of the NCAA’s current rules, and ‘without significantly increased cost.’

In our judgment, however, the district court clearly erred in finding it a viable alternative to allow students to receive NIL cash payments untethered to their education expenses. . . . The question is whether the alternative of allowing students to be paid NIL compensation unrelated to their education expenses, is “virtually as effective” in preserving amateurism as not allowing compensation. . . .

Having found that amateurism is integral to the NCAA’s market, the district court cannot plausibly conclude that being a poorly-paid professional collegiate athlete is “virtually as effective” for that market as being as amateur. Or, to borrow the Supreme Court’s analogy, the market for college football is distinct from other sports markets and must be ‘differentiate[d]’ from professional sports lest it become ‘minor league [football].’ . . .

Aside from the self-evident fact that paying students for their NIL rights will vitiate their amateur status as collegiate athletes, the court relied on threadbare evidence in finding that small payments of cash compensation will preserve amateurism as well the NCAA’s rule forbidding such payments. Most of the evidence elicited merely indicates that paying students large compensation payments would harm consumer demand more than smaller payments would—not that small cash payments will preserve amateurism. Thus, the evidence was addressed to the wrong question. Instead of asking whether making small payments to student-athletes served the same procompetitive purposes as making no payments, the evidence before the district court went to a different question: Would the collegiate sports market be better off if the NCAA made small payments or big payments? . . .

But there is a stark difference between finding that small payments are less harmful to the market than large payments—and finding that paying students small sums is virtually as effective in promoting amateurism as not paying them.”


Bybee has a reputation of being a bit of an "out there" judge, but if this stands, I think the NCAA would (at least internally) be breathing a big sigh of relief.

[swood1000]

I would think the plaintiffs will ask for either a rehearing by the full Ninth Circuit or will seek to appeal to the Supreme Court, or both.

The conditions exist for the Supreme Court to accept an appeal, since there is now a conflict between the Ninth Circuit and the Seventh Circuit Court of Appeals, over how to interpret the NCAA v Board of Regents (https://supreme.justia.com/cases/federal/us/468/85/case.html) case, which was the Supreme Court's statement on the applicability of antitrust law to the NCAA's activities. The decision of the Seventh Circuit in Agnew v NCAA (http://caselaw.findlaw.com/us-7th-circuit/1603708.html) was a lot closer to what the NCAA was asking for in this case, basically exempting the NCAA from antitrust scrutiny, but here the Ninth Circuit rejected that, saying that they didn't think that was what the Supreme Court had meant in Board of Regents.

[swood1000]

This also opens the question as to a reduction in the $46 million in legal fees and expenses that the NCAA was ordered to pay as a result of having been sued successfully for an antitrust violation.

[swood1000]

The conditions exist for the Supreme Court to accept an appeal, since there is now a conflict between the Ninth Circuit and the Seventh Circuit Court of Appeals, over how to interpret the NCAA v Board of Regents (https://supreme.justia.com/cases/federal/us/468/85/case.html) case, which was the Supreme Court's statement on the applicability of antitrust law to the NCAA's activities. The decision of the Seventh Circuit in Agnew v NCAA (http://caselaw.findlaw.com/us-7th-circuit/1603708.html) was a lot closer to what the NCAA was asking for in this case, basically exempting the NCAA from antitrust scrutiny, but here the Ninth Circuit rejected that, saying that they didn't think that was what the Supreme Court had meant in Board of Regents.
There is also now a conflict between the Ninth Circuit and the Sixth Circuit, which held in Bassett v. NCAA (http://www.ca6.uscourts.gov/opinions.pdf/08a0209p-06.pdf), that the NCAA's rules against giving recruits "improper inducements" were "explicitly noncommercial." The Sixth Circuit put it this way:

In fact, th[e]se rules are anti-commercial and designed to promote and ensure competitiveness amongst NCAA member schools. Violation of the applicable NCAA rules gives the violator a decided competitive advantage in recruiting and retaining highly prized student athletes. It also violates the spirit of amateur athletics by providing remuneration to athletes in exchange for their commitments to play for the violator's football program. Finally, violators of these rules harm the student-athlete academically when coaches and assistants complete coursework on behalf of the student-athlete.
In this case the Ninth Circuit said that the Sixth Circuit had been "simply wrong" and rejected their reasoning that certain of these rules are non-commercial, and therefore not subject to the Sherman Antitrust Act:


Bassett's reasoning, in fine, is that rules that seek to combat commercialism in college sports by preventing schools from competing to pay student-athletes cannot be considered restraints on "commerce." We simply cannot understand this logic. Rules that are "anti-commercial and designed to promote and ensure competitiveness," surely affect commerce just as much as rules promoting commercialism. The intent behind the NCAA's compensation rules does not change the fact that the exchange they regulate—labor for in-kind compensation—is a quintessentially commercial transaction. [References omitted]

[grad_devil]

I received the below boilerplate email yesterday from Donald Remy, Chief Legal Officer of the NCAA. It has some talking points for member institutions, but I thought I'd copy/paste it here for discussion purposes.


Colleagues:
As you may know, a US Ninth Circuit Court of Appeals panel issued its decision for the O’Bannon v. NCAA case. The panel dismissed the terms of the injunction that would have allowed student-athletes to receive up to $5,000 beyond cost of attendance. But it upheld the circuit court’s ruling that NCAA rules limiting below COA what college athletes can receive violates antitrust laws. We are currently reviewing the details of the decision and will advise you on any developments.

Below are talking points for your use with your constituents:

We remain committed to meeting the evolving needs of college athletes, including recent changes to provide full cost-of-attendance scholarships, unlimited meals and four-year scholarships, because our priority is to provide educational and life opportunities through college sports.
We agree with the US Ninth Circuit Court of Appeals that the injunction “allowing students to be paid cash compensation of up to $5,000 per year was erroneous.”
We are pleased the court has reaffirmed our position that college athletes are students and not paid professionals.
The court endorsed amateurism as integral to the NCAA and noted that not paying student-athletes is precisely what makes them amateurs.
Since August 1, the NCAA has allowed Division I member schools to provide up to full cost of attendance; however, we disagree that it should be mandated by the courts.
The panel decision is at odds with how other federal circuit courts have analyzed amateurism rules under antitrust laws.
We will continue to review the decision to determine what, if any, next steps are appropriate.

A link to opinion is provided below. We will provide updates as available.

Donald

http://cdn.ca9.uscourts.gov/datastore/opinions/2015/09/30/14-16601.pdf

[Indoor66]

I received the below boilerplate email yesterday from Donald Remy, Chief Legal Officer of the NCAA. It has some talking points for member institutions, but I thought I'd copy/paste it here for discussion purposes.

What, nobody has an opinion without talking points? These are supposed to be educated people. Each institution has its own issues and priorities. Why sound like the talkin heads and "political stratigists" that hover around on the TV shows who only spout talking points? I guess the NCAA also has to issue marching orders.

[grad_devil]

What, nobody has an opinion without talking points? These are supposed to be educated people. Each institution has its own issues and priorities. Why sound like the talkin heads and "political stratigists" that hover around on the TV shows who only spout talking points? I guess the NCAA also has to issue marching orders.

I agree that these are educated people, but being educated doesn't necessarily mean one can digest/synthesize legal briefs (the writings, not the underwear. That's just weird).

I saw yesterday where several conferences released statements regarding the most recent decision. I'm curious if they're full of any additional opinions, or pull directly from these talking points (or a different set sent to conference offices).

[Indoor66]

I agree that these are educated people, but being educated doesn't necessarily mean one can digest/synthesize legal briefs (the writings, not the underwear. That's just weird).

I saw yesterday where several conferences released statements regarding the most recent decision. I'm curious if they're full of any additional opinions, or pull directly from these talking points (or a different set sent to conference offices).

Your bolded response illustrates my point. People respond about issues while doing no critical thinking - just regurgitate talking points. Sort of like getting your news from comedians.

[swood1000]

I received the below boilerplate email yesterday from Donald Remy, Chief Legal Officer of the NCAA. It has some talking points for member institutions, but I thought I'd copy/paste it here for discussion purposes.


Since August 1, the NCAA has allowed Division I member schools to provide up to full cost of attendance; however, we disagree that it should be mandated by the courts.

In its opinion in this case the Court of Appeals acknowledged that the NCAA had, prior to the decision in this case, already allowed schools to pay full COA. However, the court said that the NCAA had done this voluntarily and could decide to reverse it at any time. Therefore the court order was appropriate in that it removed the NCAA's discretion on this. One reason the NCAA would like this order to be reversed is that without it, and without the order allowing the trust payments, the argument of the other side that it had "prevailed" in the antitrust case would have some of its force removed, and with it the rationale for the NCAA to have to pay the $46 million in attorney fees and expenses.

[swood1000]

In the federal court of appeals cases are heard by a panel of three of the judges. The panel decided mostly in favor of the NCAA. The other side (O'Bannon) requested a rehearing "en banc" or in front of the full court. That was just denied. (http://cdn.ca9.uscourts.gov/datastore/general/2015/12/22/14-16601%20PFR%20order.pdf) Now they can see if the U.S. Supreme Court will hear the matter.

Edit: which it might do since there is now a conflict between the Ninth Circuit and the Sixth Circuit, which held in Bassett v. NCAA (http://www.ca6.uscourts.gov/opinions.pdf/08a0209p-06.pdf), that the NCAA's rules against giving recruits "improper inducements" were "explicitly noncommercial," and part of the job of the Supreme Court is to settle conflicts between circuits.

[swood1000]

The Supreme Court denied certiorari in O'Bannon today, so they will not be hearing the case. This means that on both issues the lower courts will remain split.

The first issue concerned how easy it is to sue the NCAA for an anti-trust violation. Normally, two business competitors are not permitted to make agreements between themselves that have the effect of reducing competition. An example is the case back in 1991 (http://www.nytimes.com/1991/05/23/us/ivy-universities-deny-price-fixing-but-agree-to-avoid-it-in-the-future.html) in which the Ivy League and other elite northeast schools used to meet each year in order to decide how much financial aid to offer each student, and to collaborate on tuition increases. The Justice Department threatened them with a price-fixing antitrust suit and they stopped.

There is an exception, though, for enterprises that cannot even exist without restrictions on competition, an example of which is the sports league. "Procompetitive" is an antitrust term that describes restrictions on competition such as drafts, without which it is believed that the enterprise cannot function successfully. As a necessary evil they must be kept to a minimum.

In this case the Ninth Circuit decided that the NCAA can be sued under the anti-trust laws if an alternative to one of its rules restricting competition can be found that is "substantially" less restrictive of competition, and "'virtually as effective' in serving the procompetitive purposes of the NCAA's current rules, 'without significantly increased cost.'" The restriction in question was the limitation on payments to college athletes, and in this case the Ninth Circuit said that the NCAA must allow schools to give aid to athletes up to the COA (cost of attendance), which is a figure each school calculates according to standard rules defined by the federal government. It includes tuition and fees, room and board, required books, supplies, transportation, and other expenses related to attendance at the institution.

The NCAA claimed that under a prior Supreme Court case (http://caselaw.findlaw.com/us-supreme-court/468/85.html), NCAA amateurism rules were declared procompetitive as a matter of law, and that such restrictions should be upheld if they are plausibly designed to preserve amateurism. The NCAA argued that the approach adopted by the Ninth Circuit allows the courts to micromanage the activities of the enterprise. For example, suppose a dog breeder sues a kennel club because his dog is an inch shorter than the standard set for that breed. Should courts be in the business of deciding questions at this level? If so, according to the NCAA, this will result in a rash of lawsuits against the NCAA, each one hoping to find a judge to agree that its alternative to an NCAA rule is "substantially less restrictive of competition" and "virtually as effective" in achieving the purpose "without significantly increased cost." There will be a great incentive to bringing these cases because a plaintiff who prevails is awarded triple damages. (In the O'Bannon case the plaintiffs were awarded $42.3 million (http://www.usatoday.com/story/sports/college/2016/03/31/federal-judge-ncaa-must-pay-423-million-obannon-anti-trust-case/82493298/).)

The lower courts remain split. The Third and Fifth and Sixth Circuits agree with the NCAA, so these cases will be brought in the Ninth Circuit. Maybe the Supreme Court will hear one of them as soon as a ninth justice is confirmed.

6695

[swood1000]

The other O'Bannon issue that the lower courts are split over is the one concerning a person's "right-of-publicity" over the use of his or her name/image in a video game. In this case the video game used the names, images, and likenesses (NILs) of Division I athletes without compensating them. The question becomes more difficult because the Supreme Court has held (https://en.wikipedia.org/wiki/Brown_v._Entertainment_Merchants_I'm a real wanker for saying this.I'm a real wanker for saying this.I'm a real wanker for saying this.%27n) that video games are "speech," protected by the First Amendment.

The test used in this case was "a balancing test between the First Amendment and the right of publicity based on whether the work in question adds significant creative elements so as to be transformed into something more than a mere celebrity likeness or imitation." The court held here that the videogame at issue was not protected by the First Amendment because it "realistically portrays college football players in the context of college football games."

The NCAA (which no longer licenses NILs to video games) argued for the rule used in four circuits and two state high courts. Under that test, using a person's NIL in an expressive work is protected by the First Amendment unless the underlying work is (1) "'wholly unrelated' to the individual" or (2) a "disguised advertisement for the sale of goods or services or a collateral commercial product." They say that the rule used by the court requires a "transformation" but a biography, for example, tries to depict the subject as realistically as possible.

The cases in the lower courts have been all over the place. For example, both Manuel Noriega and Lindsay Lohan lost in the lower courts when their NILs were used in video games.

6696 6697

The issue is not an easy one. For example:

• If Sports Illustrated does a cover story on athlete X, resulting in an edition that doubles their normal circulation, can athlete X sue them for appropriating his NIL? That's certainly why people bought it.

• The Social Network was about the founders of Facebook. Do they need to first get the permission of those people? Does the movie Selma need to get the permission of Coretta Scott King, Andrew Young, John Lewis, Harry Belafonte, and the heirs of Martin Luther King, Jr., J. Edgar Hoover, Lyndon Johnson, and others?

• Are unauthorized biographies not to be permitted?

• Is it OK to sell a coffee mug with a celebrity's image on it without his permission?

• Can Andy Warhol sell an image of Marilyn Monroe without asking her permission?

• When Simon & Garfunkel's Mrs. Robinson asked "Where have you gone, Joe DiMaggio?" did they infringe Joe DiMaggio's right of publicity?

What is the correct dividing line in these cases? The lower courts are split and the Supreme Court decided not to decide the question at this time.

[swood1000]

The other O'Bannon issue that the lower courts are split over is the one concerning a person's "right-of-publicity" over the use of his or her name/image in a video game. In this case the video game used the names, images, and likenesses (NILs) of Division I athletes without compensating them. The question becomes more difficult because the Supreme Court has held (https://en.wikipedia.org/wiki/Brown_v._Entertainment_Merchants_I'm a real wanker for saying this.I'm a real wanker for saying this.I'm a real wanker for saying this.%27n) that video games are "speech," protected by the First Amendment.

The test used in this case was "a balancing test between the First Amendment and the right of publicity based on whether the work in question adds significant creative elements so as to be transformed into something more than a mere celebrity likeness or imitation." The court held here that the videogame at issue was not protected by the First Amendment because it "realistically portrays college football players in the context of college football games."

The NCAA (which no longer licenses NILs to video games) argued for the rule used in four circuits and two state high courts. Under that test, using a person's NIL in an expressive work is protected by the First Amendment unless the underlying work is (1) "'wholly unrelated' to the individual" or (2) a "disguised advertisement for the sale of goods or services or a collateral commercial product." They say that the rule used by the court requires a "transformation" but a biography, for example, tries to depict the subject as realistically as possible.

The cases in the lower courts have been all over the place. For example, both Manuel Noriega and Lindsay Lohan lost in the lower courts when their NILs were used in video games.

6696 6697

The issue is not an easy one. For example:
• If Sports Illustrated does a cover story on athlete X, resulting in an edition that doubles their normal circulation, can athlete X sue them for appropriating his NIL? That's certainly why people bought it.

• The Social Network was about the founders of Facebook. Do they need to first get the permission of those people? Does the movie Selma need to get the permission of Coretta Scott King, Andrew Young, John Lewis, Harry Belafonte, and the heirs of Martin Luther King, Jr., J. Edgar Hoover, Lyndon Johnson, and others?

• Are unauthorized biographies not to be permitted?

• Is it OK to sell a coffee mug with a celebrity's image on it without his permission?

• Can Andy Warhol sell an image of Marilyn Monroe without asking her permission?

• When Simon & Garfunkel's Mrs. Robinson asked "Where have you gone, Joe DiMaggio?" did they infringe Joe DiMaggio's right of publicity?

What is the correct dividing line in these cases? The lower courts are split and the Supreme Court decided not to decide the question at this time.
The censor for this site is a little too earnest. This post included a link to a Wikipedia site that discussed a Supreme Court case called Brown v. Entertainment Merchants Association, with the last word abbreviated as "A S S ' N" (without spaces). The linked site was changed to:

"https://en.wikipedia.org/wiki/Brown_v._Entertainment_Merchants_I'm a real wanker for saying this.I'm a real wanker for saying this.I'm a real wanker for saying this.'n"

[Richard Berg]

Thanks for the (always well researched) updates, swood.

[swood1000]

Speaking of expecting additional lawsuits against the NCAA, there is currently another one going on in the courtroom of the same trial judge who ruled in favor of O'Bannon: Jenkins v. NCAA. Like O'Bannon, Jenkins is claiming that the NCAA violated the antitrust laws by limiting the amount of compensation that can be paid to athletes. In August the NCAA argued that in O'Bannon the Court of Appeals disallowed monetary payments to athletes above and beyond the cost of attendance (COA) as being incompatible with amateurism, and therefore the issue in Jenkins has already been decided.

The trial judge disagreed (https://docs.justia.com/cases/federal/district-courts/california/candce/4:2014cv02758/278361/245). She said that O'Bannon only dealt with cash compensation and this case deals also with the prohibition of other "benefits" and "in-kind" compensation. So Jenkins is targeting the prohibition of "extra benefits" by By-laws 13 and 16 if not available to the students generally.
 
On this point the Court of Appeals said (http://cdn.ca9.uscourts.gov/datastore/general/2015/09/30/14-16601%20Opinion.pdf):


Both we and the district court agree that the NCAA's amateurism rule has procompetitive benefits. But in finding that paying students cash compensation would promote amateurism as effectively as not paying them, the district court ignored that not paying student-athletes is precisely what makes them amateurs. …

The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap. Once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point; we have little doubt that plaintiffs will continue to challenge the arbitrary limit imposed by the district court until they have captured the full value of their NIL. At that point the NCAA will have surrendered its amateurism principles entirely and transitioned from its "particular brand of football" to minor league status. In light of that, the meager evidence in the record, and the Supreme Court's admonition that we must afford the NCAA "ample latitude" to superintend college athletics, we think it is clear the district court erred in concluding that small payments in deferred compensation are a substantially less restrictive alternative restraint. We thus vacate that portion of the district court's decision and the portion of its injunction requiring the NCAA to allow its member schools to pay this deferred compensation. [Citations removed]


The Court of Appeals was not impressed with the evidence and testimony at the O'Bannon trial that was intended to prove that additional cash payments would not be incompatible with amateurism. The trial judge, who seems clearly not to be sympathetic to the NCAA's position, obviously believes that perhaps more convincing testimony might be able to produce a different result with respect to extra benefits. Jenkins will be trying to show that relaxing the rules on extra benefits will be "substantially" less restrictive of competition, and "'virtually as effective' in serving the procompetitive purposes of the NCAA's current rules, 'without significantly increased cost.'"

Cash not allowed but some jewelry might be OK? I'm looking forward to a definition of "extra benefits" that does not equate with cash.

[MarkD83]

I'm looking forward to a definition of "extra benefits" that does not equate with cash.

(This is too easy.) How about giving credit for non-existent classes.

[swood1000]

The Jenkins v. NCAA complaint (http://a.espncdn.com/pdf/2014/0317/NCAA_lawsuit.pdf) argued that competitive balance is completely lacking in D-I men's basketball. One of the examples they gave was the dominance of Duke, illustrated by the fact that in the ten years ending in the 2012-13 season Duke had 31 losses in games away from its home court (an average of just three per season) and that in 25 of those 31 games the opposing fans "rushed the court in jubilation because an upset was so unlikely."

[sagegrouse]

The Jenkins v. NCAA complaint (http://a.espncdn.com/pdf/2014/0317/NCAA_lawsuit.pdf) argued that competitive balance is completely lacking in D-I men's basketball. One of the examples they gave was the dominance of Duke, illustrated by the fact that in the ten years ending in the 2012-13 season Duke had 31 losses in games away from its home court (an average of just three per season) and that in 25 of those 31 games the opposing fans "rushed the court in jubilation because an upset was so unlikely."

Anyone need a new signature on DBR? How about this: "Duke has been dominant in hoops, losing only 31 games away from Cameron in ten years, and in 25 of those, the opposing fans 'rushed the court because an upset was so unlikely.'"

[NSDukeFan]

The Jenkins v. NCAA complaint (http://a.espncdn.com/pdf/2014/0317/NCAA_lawsuit.pdf) argued that competitive balance is completely lacking in D-I men's basketball. One of the examples they gave was the dominance of Duke, illustrated by the fact that in the ten years ending in the 2012-13 season Duke had 31 losses in games away from its home court (an average of just three per season) and that in 25 of those 31 games the opposing fans "rushed the court in jubilation because an upset was so unlikely."


Anyone need a new signature on DBR? How about this: "Duke has been dominant in hoops, losing only 31 games away from Cameron in ten years, and in 25 of those, the opposing fans 'rushed the court because an upset was so unlikely.'"

The great thing about that awesome stat is that wasn't a particularly great 10 year stretch in that there was only one title and included the season with Duke's worst win-loss record of the last 20 years, (2006-7, 22-11, still made the tournament). Wow, are we as fans spoiled much?

[swood1000]

When last we met, U.S. District Judge Claudia Wilken had decided in the O’Bannon case that the NCAA had violated antitrust laws and must allow its members (a) to give scholarships up to the full cost of attendance, and (b) to pay cash compensation up to $5,000 per year in deferred compensation, to be held in trust for student-athletes. The NCAA appealed and in September of 2015 the Ninth Circuit Court of Appeals reversed (b), saying that “The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap.”

Judge Wilken on March 8 issued another opinion on a similar matter in which she again found the NCAA to be in violation of antitrust laws. She concluded that since the Court of Appeals had not prohibited payments that were “tethered” to education she ordered (https://t.co/S9FBsMwQcI) that the NCAA is “permanently restrained and enjoined from agreeing to fix or limit compensation or benefits related to education that may be made available from conferences or schools to Division I women's and men's basketball and FBS football student-athletes on top of a grant-in-aid.”

Under this ruling recruits will be able to receive athletic scholarship offers that exceed a “full ride” to college, as long as the additional benefits are education-related. What kind of benefits? According to the opinion (https://t.co/ag8Rtvtk2b),


The types of education-related benefits that could not be capped by the NCAA would include those that it currently prohibits or limits in some fashion. These include computers, science equipment, musical instruments and other items not currently included in the cost of attendance calculation but nonetheless related to the pursuit of various academic studies. Also included would be post-eligibility scholarships to complete undergraduate or graduate degrees at any school; scholarships to attend vocational school; expenses for pre- and post-eligibility tutoring; expenses related to studying abroad that are not covered by the cost of attendance; and paid post-eligibility internships. … There may be other education-related benefits that the NCAA, in an exercise of its good faith judgment, would allow. Payment for these benefits would be limited to their actual value and could be provided in kind. For that reason, they would not be a vehicle for potentially unlimited cash payments.

The NCAA could continue to restrict cash academic or graduation awards and incentives. Individual conferences could vote to set or maintain limits on education-related benefits that the NCAA will not be allowed to cap.

The NCAA issued a statement (http://www.ncaa.org/about/resources/media-center/news/ncaa-statement-alston-decision) saying


Although the court rejected the plaintiffs’ desire for a free market system, we will explore our next steps as appropriate. We believe the ruling is inconsistent with the decision by the 9th Circuit Court of Appeals in O’Bannon. That decision held that the rules governing college athletics would be better developed outside the courtroom, including rules around the education-related support that schools provide.

[swood1000]

So, how about “If you play for us we’ll agree to pay all your education expenses for the rest of your life, no matter what kind”? You probably will not graduate (since in reality you’re not college-ready) but just hang in there and after your eligibility expires we’ll pay for you to go to a trade school (I think this kind of this is already allowed to some degree). After the pros we’ll foot the bill for you to be trained as an announcer, or as a real estate agent. Every year for the rest of your life we’ll pay for a trip to Europe where you’ll be signed up for some educational program but really will just have a European vacation. Whenever you want to go to New York or LA we’ll arrange for some instruction there and pay your way. We’ll send you to Aspen each year to receive ski instruction. We’ll send you to the Bahamas for scuba instruction every year starting your freshman year. What? Team X is only promising you that? We’ll double it. I wonder if it would be limited to the athlete’s education. How about “We’ll pay for college for your kids”?

I guess there would be a graduated scale of educational compensation, with the bench warmers being promised less. The NCAA argued that this would create tensions among student-athletes to the extent that the additional compensation is not proved equally, and would be a wedge between the athletes and the rest of the student body. The judge said that this is outweighed by the fact that income disparities inevitably exist as a result of family background or wealth derived from other sources, and that levels of student-athlete compensation vary already and already provide a difference from the non-athletes.

Clearly if all these things are allowed the schools with the greatest sports revenue would have a serious advantage over the others, creating a snowball effect. Also sets up the courts as permanent NCAA supervisors determining which expenses must be allowed.

[Skydog]

..You probably will not graduate (since in reality you’re not college-ready) ...

Broad brush much? I hope this doesn't come across as PC-policing but just pointing out that many NCAA athletes, including in the revenue sports of football and basketball, are not only college ready - some are honors students. They aren't all the same.

[Stray Gator]

I'm sure some eyes are lighting up at the part of the ruling that lists among the "education-related benefits that cannot be capped by the NCAA" such items as "musical instruments." So, let's say some scholarship basketball player is encouraged to sign up for introductory guitar lessons, which require both an acoustic and an electric guitar as "course materials"; if the school provides the player a vintage Martin D-45 and a 1958 Custom Gibson Les Paul, will anyone notice if the young man shows up for class carrying a couple of used Epiphones -- and wearing a shiny new Rolex? :rolleyes:

(I know, I know . . . for some schools, the hypothetical positing that the player shows up for class may be objectionable on the ground of assuming facts not in evidence.)

[Wahoo2000]

Broad brush much? I hope this doesn't come across as PC-policing but just pointing out that many NCAA athletes, including in the revenue sports of football and basketball, are not only college ready - some are honors students. They aren't all the same.

I would imagine he was just "playing the percentages". In other words, what percentage of rev athletes could be admitted to the school of their choice if they were NOT an athlete?

[ritz]

Jumping in late here, but does anyone know what the firm rule is on players being able to monetize their social media? For instance, could a player run an ad (not necessarily like a Nike ad or anything, just the generic ones you see running before clips) on their twitter/insta and make money off of that? Could they have done it in High School and not College?

How is this governed? I haven't been able to find anything definitive other than I don't actually seeing it taking place but what exactly would make it explicitly prohibited?

[kmspeaks]

Jumping in late here, but does anyone know what the firm rule is on players being able to monetize their social media? For instance, could a player run an ad (not necessarily like a Nike ad or anything, just the generic ones you see running before clips) on their twitter/insta and make money off of that? Could they have done it in High School and not College?

How is this governed? I haven't been able to find anything definitive other than I don't actually seeing it taking place but what exactly would make it explicitly prohibited?

I'm pretty sure there was a football player who was ruled ineligible for monetizing his YouTube channel. Checks google.....yep, a kicker at UCF. (https://www.nydailynews.com/sports/college/ucf-kicker-eligibility-money-youtube-videos-article-1.3372494)

[ritz]

I'm pretty sure there was a football player who was ruled ineligible for monetizing his YouTube channel. Checks google....yep, a kicker at UCF. (https://www.nydailynews.com/sports/college/ucf-kicker-eligibility-money-youtube-videos-article-1.3372494)

Thanks for the link - just goes to show how backwards the NCAA is at this point, honestly

[PackMan97]

I'm pretty sure there was a football player who was ruled ineligible for monetizing his YouTube channel. Checks google....yep, a kicker at UCF. (https://www.nydailynews.com/sports/college/ucf-kicker-eligibility-money-youtube-videos-article-1.3372494)

You have it a bit backwards, there was a person with a monetized youtube channel who was ruled ineligible because of it. He didn't become an NCAA athelte and then start making money off his channel. He was making money from youtube and then he became and NCAA athlete.

This brings up an interesting question, if a kid starts a business in high school...what happens then if he becomes an NCAA athlete.

[swood1000]

Jumping in late here, but does anyone know what the firm rule is on players being able to monetize their social media? For instance, could a player run an ad (not necessarily like a Nike ad or anything, just the generic ones you see running before clips) on their twitter/insta and make money off of that? Could they have done it in High School and not College?

How is this governed? I haven't been able to find anything definitive other than I don't actually seeing it taking place but what exactly would make it explicitly prohibited?
Clearly the use of an athlete’s name and image has monetary value. People will buy the shoe that Michael Jordan recommends. And there are rules, like them or not, that say that receiving payment for the use of one’s image is incompatible with amateurism. Is there any practical difference between an increase in wealth through licensing one’s image to Nike and an increase in wealth as a result of associating one’s image with a private business one owns? You weren’t trying to cash in on your image? Then why did you publicly associate it with the enterprise you own?

[swood1000]

I'm sure some eyes are lighting up at the part of the ruling that lists among the "education-related benefits that cannot be capped by the NCAA" such items as "musical instruments." So, let's say some scholarship basketball player is encouraged to sign up for introductory guitar lessons, which require both an acoustic and an electric guitar as "course materials"; if the school provides the player a vintage Martin D-45 and a 1958 Custom Gibson Les Paul, will anyone notice if the young man shows up for class carrying a couple of used Epiphones -- and wearing a shiny new Rolex? :rolleyes:

(I know, I know . . . for some schools, the hypothetical positing that the player shows up for class may be objectionable on the ground of assuming facts not in evidence.)
Actually, the courts might allow the NCAA to set up rules such that these things (computers, musical instruments) are only loaned for the duration of the education, or at least set up a cap on the cost of the instrument, above which the amount is presumed not to be for educational purposes.

[swood1000]

A Sports Illustrated article (https://www.si.com/college-football/2019/03/08/ncaa-antitrust-lawsuit-claudia-wilken-alston-jenkins) proposes that since only about twenty D-I schools report a profit on athletics (http://www.ncaa.org/about/resources/media-center/news/growth-division-i-athletics-expenses-outpaces-revenue-increases), most colleges will likely decline to offer athletic scholarships that exceed the current levels. The problem with this is that associating expenses with revenue in order to report a profit or a loss is arbitrary. They can report a loss if they want to. It doesn’t necessarily reflect the economic reality of the situation. Furthermore, even if expenses do exceed revenues they don’t want the revenues to go down which is what might happen if they miss out on all the good players. It often makes sense to spend X in order to avoid a reduction in revenue of 2X, or in order to keep school spirit at a high level. Finally, it still leaves the high rollers in an arms race.

[swood1000]

A Sports Illustrated article (https://www.si.com/college-football/2019/03/08/ncaa-antitrust-lawsuit-claudia-wilken-alston-jenkins) proposes that since only about twenty D-I schools report a profit on athletics (http://www.ncaa.org/about/resources/media-center/news/growth-division-i-athletics-expenses-outpaces-revenue-increases), most colleges will likely decline to offer athletic scholarships that exceed the current levels. The problem with this is that associating expenses with revenue in order to report a profit or a loss is arbitrary. They can report a loss if they want to. It doesn’t necessarily reflect the economic reality of the situation.
I mean in the context of revenues and expenses of a college sports program (https://sports.vice.com/en_us/article/ez33bj/heres-how-the-ncaas-black-magic-accounting-turns-profit-into-loss). The rules with respect to for-profit enterprises that may be using their income statement to induce investment are designed to more clearly reflect economic realities. However, it is claimed (https://www.researchgate.net/publication/228624230_The_Bottom_Line_Accounting_for_Revenues_ and_Expenditures_in_Intercollegiate_Athletics) that while football and men’s basketball programs are generally highly profitable at BCS schools, below this top tier fewer than 10% of football programs and 15% of men’s basketball programs show a profit by any reasonable accounting measures.

[sagegrouse]

You have it a bit backwards, there was a person with a monetized youtube channel who was ruled ineligible because of it. He didn't become an NCAA athelte and then start making money off his channel. He was making money from youtube and then he became and NCAA athlete.

This brings up an interesting question, if a kid starts a business in high school...what happens then if he becomes an NCAA athlete.

Possibly the most famous case is that of Jeremy Bloom, many times world ski champion and two- time Olympian; footballer at U. of Colorado for one season; then NFL wide receiver for four years.

The NCAA ruled in 2004 that, while it was legal for a college athlete to accept a professional salary for another sport (e.g., Trajan Langdon playing the in the San Diego Padres farm system), he or she could not accept endoresement money, which, of course, is how skiers make a living.


From AP story September 4, 2004.

BOULDER, Colo. -- Jeremy Bloom's college football career is officially over.

The junior receiver lost a last-ditch effort to keep his college
eligibility Tuesday when an NCAA panel turned down his appeal to be
allowed to receive endorsements as a professional skier and still
play football for Colorado.

.......
Bloom, the reigning world champion in freestyle moguls and a
2002 Olympian, has been battling the NCAA for two years. He started
accepting endorsements last winter, claiming he can't afford to
prepare for the 2006 Torino Olympics without financial support.

NCAA rules allow athletes to accept salaries as professionals in
other sports, but they aren't allowed to accept money from
sponsors. The NCAA has held firm in its stance, ruling last week
that Bloom willfully violated NCAA rules by accepting endorsements.

[HereBeforeCoachK]

I mean in the context of revenues and expenses of a college sports program (https://sports.vice.com/en_us/article/ez33bj/heres-how-the-ncaas-black-magic-accounting-turns-profit-into-loss). The rules with respect to for-profit enterprises that may be using their income statement to induce investment are designed to more clearly reflect economic realities. However, it is claimed (https://www.researchgate.net/publication/228624230_The_Bottom_Line_Accounting_for_Revenues_ and_Expenditures_in_Intercollegiate_Athletics) that while football and men’s basketball programs are generally highly profitable at BCS schools, below this top tier fewer than 10% of football programs and 15% of men’s basketball programs show a profit by any reasonable accounting measures.

.....and FB is not profitable at Duke or WF or BC - except for the ACC revenue share, a lot of which is generated by Clemons FB and Duke BB.
And in a related topic - someone is going to find out what the true market value of the athletes are.....without the name on the front of the jersey. My hunch is they will be surprised.
https://www.wralsportsfan.com/david-west-the-historical-basketball-league-is-aiming-to-be-a-new-model-for-elite-college-athletes/18254947/

[Pghdukie]

Who was the Notre Dame walk-on basketball player that was selling the "Catholics vs Convicts" tshirts ? ND made him forfeit all of his profits, then kicked him off the team.