NCAA Football

College sports deserve to collapse

College sports deserve to collapse

However, if Baker asks legal counsel to assess this business model for regulatory risks, they could easily conclude that the situation is much more dire than Hill suggests. They could look past Monday night’s Texas Christian-Georgia championship game and past reports that the College Football Playoff’s annual television revenue could soon soar from $470 million to 2 billion dollars. They could conclude that sports’ for-profit business model has turned higher education into a caustic shell of the social force it could have been, and make a strong case for dismantling it. why? As a lawyer who assesses regulatory risk for clients, I see the NCAA’s business model as being on the side of too many facts and too many laws to defend.

Lessons of educational compromise

In the case of 2021 NCAA vs. Alston, the Supreme Court made it clear that, given the opportunity, it may well rule that the association’s business model violates federal antitrust laws. Those laws prohibit agreements in restraint of trade in interstate commerce and the longstanding policy of 1,100 schools forbidding each other from paying the player a salary is likely prohibited by the contract.

So consider Baker’s predicament when the university’s trustees ask him to go to Congress to renew his predecessor’s plea for new laws to help the trustees support the business model.

First, the list of facts he would like to avoid discussing at such a hearing is long.

He is unlikely to talk much about labor exploitation, for example. No mention of sharing Texas A&M’s annual income with the football players. Calculating the drop in players as the value of their scholarships, I calculated the split to be approx 143 million dollars to 3.8 million dollarsor 38 to 1.

No mention of sharing the University of Kentucky’s annual income with men’s basketball. In a world where the owner and player’s annual income is split between them NBA and NFL about 1 to 1, the split in Kentucky seems to be about 55 million dollars to $600,000or 91 to 1.

Probably a little discussion on how to use the players’ love for the game as a quality lever for evading salary payments, the trustees’ business model veers into the territory of stealing players’ souls.

University of Alabama football coach Nick Saban has a contract that pays him an average of $11 million per season.Butch Dill/Associated Press

When he goes to Capitol Hill, Baker likely won’t talk much about commercial excess. A little discussion of how 40 of the 50 states the highest paid individual on the public payroll – a person who teaches football at a public university. A little discussion UCLAwhich in 2020 paid the football coach $4.3 million, the basketball coach $3.6 million, the football coach fired in 2017 another $3 million and the basketball coach fired in 2018 another $1.2 million. The school recently announced that its athletic department 103 million dollars in debt.

In a congressional hearing, Baker is likely to gloss over his education. No mention of the 2018 Institute for Collegiate Athletic Research report showing that men’s basketball players from the nation’s 65 biggest basketball universities graduated at a rate of 35 percentage points lower than the rate for other men in these schools.

No mention of the Institute’s 2019 report showing that football players from the nation’s top 10 football universities graduated at a rate of 27 percentage points lower than the rate for other men.

No mention of how University of Georgia and his peers in the NCAA fire people who lead profitable sports teams, not because the players don’t do well in school, but because the teams lose games. There is no mention of how people who coach football and basketball teams at lesser-known schools know this win-oriented reality and know that their current job could be a stepping stone to a seven-figure salary. There is no mention of the three men who retired from coaching in the Valdosta Statewhose production of footballers in recent years averaged 40 percent at Southeastern Conference schools everything paying a multi-million dollar annual salary to the man who runs the football department. There is no mention of how, in part because of these hiring and firing practices, the educational compromise extends to all levels of the NCAA’s 1,100 schools.

Baker would also likely avoid detailing how the trustees’ business model teaches 20 million students depraved lesson in prime time every fall Saturday and every weekend in March. The lesson is simple: it’s fine to talk about integrity and values ​​at Dr. Faustus seminars, but when billions of dollars are on the table, exploiting those who need to be used to line their pockets is okay.

Life outside the law

Now consider all the legislation Baker can convince Congress to pass to keep the business model legal. It’s also a long list.

In addition to certain antitrust relaxations to protect against the risk arising from the Supreme Court’s Alston decision, the NCAA’s business model may also need protection from workers’ compensation laws and tax laws. The National Labor Relations Board recently handled complaints by USC athletic players that they are employees of the university, its conference and the NCAA, and that they therefore deserve fair market compensation for their work. The Board decided that the complaints “have merit.”

If the Board determines that the players are employees and they begin receiving compensation, it increases the likelihood that the schools will have to pay the players under the state workers compensation laws. Similarly, the likelihood that earnings from football and men’s basketball will be taxed under federal tax law increases. Schools will have to collect such taxes because the income will be treated as business income not related to each other educational goals of schools. The NCAA itself would have to pay the taxes, because then it would be seen as encouraging competition among wage earners, not lovers.

Left as is, these laws can have a staggering financial impact on a business model. An antitrust ruling in favor of pro players could require schools to allow each other to pay players. An agreement to pay the players a pittance would likely not comply with such a ruling. A reasonable distribution of income with them will almost certainly lead to the fact that the total financial costs of football and basketball players will increase.

Compliance with Chapter IX, which prohibits discrimination in higher education on the basis of sex, would then require a corresponding increase in the amount of aid and/or benefits provided to players. Add in workers’ compensation and tax costs, and operating the model can become a fiscal impossibility.

In July 2020, trustees referred Baker’s predecessor to the Senate Judiciary Committee hearing to to ask for new laws that would exempt the business model from antitrust laws and prevent for-profit players from ever being considered employees. The trustees told him to take the third act if he could. He would be ahead state laws that allow players to do approval of transactions and limit the freedom of player transactions.

During one of his many trips to Capitol Hill, former NCAA President Mark Emmert (R) met with Sen. Roger Wicker before the Senate Commerce, Science and Transportation Committee held a hearing on collegiate sports in 2021.J. Scott Applewhite/Associated Press

Baker’s predecessor did not return from the halls of Congress with the expected Preemption Exemption Gift Basket Deluxe. But even if he did, and even if Congress threw in a Title IX exception for good measure, the trustees would still face significant legal risks associated with the business model of major college sports. State laws governing charitable corporations in CaliforniaTexas, Florida, and most other states require trustees to govern their university in accordance with its institutional purposes, ie. education. Laws empower attorneys general to enforce this requirement. The laws also set standards for the liability of fiduciaries in the event of a breach of duty.

Why is this important? The facts show that the for-profit sports business is characterized by such extreme labor exploitation, educational compromise, and commercial overindulgence that, rather than being part of the university’s educational purpose, the sports business may have become an end in itself that undermines the trustees’ efforts to fulfill their educational responsibilities.

State laws governing charitable corporations can be a legal license that not even Baker’s formidable political acumen can help trustees avoid.

Baker’s appointment is a moment of truth for the trustees. Perhaps drawing on his experience as a college athlete and governor, Baker can help them understand that while basketball and football are gateways to experiences that can border on the sublime, running multibillion-dollar leagues for those sports is not a job trustees of higher education. Educating students all the way to graduation.

William Devine is a Silicon Valley attorney specializing in regulatory risk. He once coached a basketball season at Menlo College in California.

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