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  1. #1
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    Meanwhile, down to the wire on O'Bannon v. NCAA

    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 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. 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, 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.

  2. #2
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    $45,000,000. Sounds like the amount they could fine unc

  3. #3
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    Quote Originally Posted by MarkD83 View Post
    $45,000,000. Sounds like the amount they could fine unc
    Another incentive to come down hard.

  4. #4
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    The basic facts of O'Bannon can be found here. 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.

  5. #5
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    Quote Originally Posted by swood1000 View Post
    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).

  6. #6
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    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?

  7. #7
    Quote Originally Posted by swood1000 View Post
    The basic facts of O'Bannon can be found here. 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.

  8. #8
    Quote Originally Posted by Nosbleuatu View Post
    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.

  9. #9
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    Quote Originally Posted by Indoor66 View Post
    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:
    "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.)

  10. #10
    Quote Originally Posted by swood1000 View Post
    As to whether schools can afford this, here are some statements from the side opposing the NCAA:


    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.

  11. #11
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    Quote Originally Posted by Indoor66 View Post
    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.
    1200. DDMF.

  12. #12
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    Quote Originally Posted by Indoor66 View Post
    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)."

  13. #13
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    Quote Originally Posted by uh_no View Post
    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:

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

  14. #14
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    Quote Originally Posted by swood1000 View Post
    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.

  15. #15
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    Quote Originally Posted by Duvall View Post
    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:

    • 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.

  16. #16
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    Quote Originally Posted by swood1000 View Post
    One opponent of the NCAA supplied these figures:

    • 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.)

  17. #17
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    Quote Originally Posted by Duvall View Post
    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

  18. #18
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    Quote Originally Posted by swood1000 View Post
    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:

    1. serve to increase consumer demand,
    2. integrate student-athletes into the academic communities on their campuses,
    3. promote competitive balance,
    4. 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.

  19. #19
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    The trial court said 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.

  20. #20
    Quote Originally Posted by Indoor66 View Post
    I'm not sure what constitutes "having an impact" but 100 football and basketball players = $500,000. That is real money to most programs.
    Quote Originally Posted by swood1000 View Post
    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.

    Quote Originally Posted by swood1000 View Post
    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...

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