Employment Rights Expected to Shake Up College Sports Landscape in 2022

[Randolph Duke 4034]

Employment Rights Expected to Shake Up College Sports Landscape in 2022

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Name, image and likeness has garnered most of the headlines related to NCAA reform over the last year. That is despite the bulk of NIL deals thus far being relatively insignificant social media or appearance-based tie-ups (at least in terms of dollars spent). The NIL ecosystem will undoubtedly mature as national brands and major agencies enter the space. Group licensing will also raise the stakes. But Casey Schwab (CEO and founding partner, Altius Sports Partners) says there is a greater shift on the horizon that college administrators ought to be focusing on, one that will “completely change the college sports landscape and the economics of it,” he said. “The next wave for conference commissioners, college presidents and athletic directors to grapple with is going to be employment rights.” And he says that wave could wash ashore as soon as 2022.

JWS’ Take: By definition, college athletes are not employees. They are classified as amateurs and sign a social compact (not a binding contract) with their respective universities.

There are several ways that dynamic could change. College athletes could gain employee status via legislation (either at the federal or state level), litigation or the National Labor Relations Board (NLRB), which could deem a group of athletes at a private institution employees (the NLRB only governs private schools and the rights afforded would be dependent on state and local laws). Schwab said all three of those avenues are actively being pursued, and he expects “one, two or all three of those dominoes will fall in 2022.”

Conversations with a pair of Power 5 athletic directors indicated the NLRB domino might be the most imminent threat to the current collegiate model. Back in September, NLRB general counsel Jennifer Abruzzo issued a memo stating that in her view college athletes have statutory rights in line with what employees receive under the National Labor Relations Act. One AD who asked to remain anonymous said he would not be surprised if a group of college athletes were granted employment status within the next 12 months (an unlikely scenario given the process involved).

If that were to happen, it “would be a game changer,” Dave Heeke (director of athletics, University of Arizona) said. Players would gain a multitude of rights and protections under employment law that the schools would have to honor if they wanted to continue playing at the Division I level (think: minimum wages, vacation time, workers’ compensation and FMLA).

But Schwab says most notably, it would give college athletes the ability to form unions and collectively bargain with their universities. And once the negotiations begin, “You’re going to see a collective bargaining agreement that includes revenue-sharing demands in revenue-positive sports, which may eventually change the economic framework of college athletics,” he predicted. To be sure, the people interviewed for this column see reform differently from athlete advocates, and are wary of shocks to the current system.

A potential middle ground does exist, which Schwab says Congress could create. Under that scenario, Schwab says, college athletes would be “pseudo employees or employees for limited purposes, which would entitle them to healthcare and other benefits, but they wouldn’t necessarily get paid salaries.” Both of the ADs we spoke to believe a modified collegiate model (which would allow athletes to retain existing benefits and protections, including a tax-free education, and include some additional benefits or opportunities) is the ideal outcome.

The problem for the NCAA, the conferences and its schools is that the decision will be made for them—and that the timeline is out of their control (of course, they could have addressed these issues long ago). Schwab says college administrators should be “starting to prepare for the change in employment status because it is more imminent than people think. The clearest path to athletes not becoming employees is Congress stepping in and siding with the NCAA, which is less likely than people think.”

While both of the ADs we spoke to said college sports administrators are well aware of the possibility there could be a change in athletes’ employment status, they said few have taken concrete action to prepare for it. Heeke explained that with so many challenges converging on college sports at once (see: NIL, redefinition of the NCAA, conference realignment, CFP expansion, etc.) and so much uncertainty, it is hard to be proactive. “It is certainly a topic of conversation when we’re all together in group settings, whether that is at the conference or national level,” Heeke said. “And there is significant concern this could go down that road. But there are not formulated plans to implement at this point.”

[TwiceHorn 31283]

THE COLLEGE FOOTBALL LEAGUE!

Brought to you by the National Football League.

All teams officially licensed by their respective educational institutions.

[ChickenNuggets 1611]

Not sure I can get behind collective bargaining and/or revenue share with athletes... The university of texas is a brand that extends well beyond what the players do on the field. They are net beneficiaries of that brand, not net contributors. imho. NIL fine, revenue share, not fine.

[Sandman 3402]

Can't the schools just say that these "positions" are unpaid internships? It seems to work everywhere else.

[Johnny Sack 8397]

28 minutes ago, ChickenNuggets said:

Not sure I can get behind collective bargaining and/or revenue share with athletes... The university of texas is a brand that extends well beyond what the players do on the field. They are net beneficiaries of that brand, not net contributors. imho. NIL fine, revenue share, not fine.

I agree with this largely.  Top 100 college basketball teams have significantly more revenue than the best G league teams.  Even though a G league team would win the tourney most years.  Name on front is worth more than the name on the back due to the special collection alums and even t shirt fans have with the school.

[David Dennison 18659]

2 minutes ago, Johnny Sack said:

I agree with this largely.  Top 100 college basketball teams have significantly more revenue than the best G league teams.  Even though a G league team would win the tourney most years.  Name on front is worth more than the name on the back due to the special collection alums and even t shirt fans have with the school.

Which is precisely why the the names on the back should organize.

[n64ra 1078]

1 hour ago, Sandman said:

Can't the schools just say that these "positions" are unpaid internships? It seems to work everywhere else.

Except they are paid with scholarships, food, and so on.

[TexArcher 37519]

2 hours ago, TwiceHorn said:

THE COLLEGE FOOTBALL LEAGUE!

Brought to you by the National Football League.

All teams officially licensed by their respective educational institutions.

Now officially banned from college football, effective immediately: female cheerleaders (advantage: aggy), bands, fight songs, rivalry trophies, pre-game on-field performances, fun, anything that might lead to fun, and anything that rhymes with fun.

[David Dennison 18659]

I think the NFL is OK with female cheerleaders.

[Harrison Bergeron 1798]

42 minutes ago, n64ra said:

Except they are paid with scholarships, food, and so on.

If they want to unionize fine. Stop the free tuition, books, housing, food, etc. Let the NIL pay for everyone's school.

[ChickenNuggets 1611]

5 hours ago, Harrison Bergeron said:

If they want to unionize fine. Stop the free tuition, books, housing, food, etc. Let the NIL pay for everyone's school.

I like this approach. If there's any revenue sharing, it should be athletes sharing their NIL money with the university.

[ztejas 43266]

9 hours ago, Randolph Duke said:

college athletes would be “pseudo employees or employees for limited purposes, which would entitle them to healthcare and other benefits

High profile college athletes already have insane benefits and perks - whether they are explicitly stated or not. Much better than your average 9-5er.

[David Dennison 18659]

2 hours ago, ztejas said:

High profile college athletes already have insane benefits and perks - whether they are explicitly stated or not. Much better than your average 9-5er.

High profile college athletes are also worth much more than your average 9-5er.

[Ignatius 4002]

10 hours ago, n64ra said:

Except they are paid with scholarships, food, and so on.

A shitload of sales reps in this country are paid a base salary, plus commissions on top of that based on incremental revenue…

Edited December 16, 2021 by Ignatius

[futureman 22415]

I’m just glad that this big problem looming on the horizon will be picked apart by way of thoughtful and respectful discourse and a clear and accepted solution will be agreed upon by this board in due time. 

[David Dennison 18659]

14 minutes ago, futureman said:

I’m just glad that this big problem looming on the horizon will be picked apart by way of thoughtful and respectful discourse and a clear and accepted solution will be agreed upon by this board in due time. 

And in no way will it devolve into political bickering. We're above that here.

[MonkeyDoughnut 10145]

11 hours ago, David Dennison said:

Which is precisely why the the names on the back should organize.

Agreed and Universities would be free to lock them out and or not agree to their terms. I'd make them unionize on a national level. Would likely cap some of the discrepancy issues were seeing pop up now.

[tx 3 putt 76390]

that big time ncaa brand doesn't get very far without the star players on the field / court 

[Grade of D as in David 13253]

Its pretty easy to see who in this thread makes less than college athletes.

 

[Randolph Duke 4034]

Treating College Athletes as Employees May Create New Problems

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In the last few weeks, five coaches have signed contracts worth nearly $500 million , strengthening the argument for those who believe college athletes deserve to be paid. As we wrote yesterday, that could become a reality in 2022 if college athletes are reclassified as employees. But Casey Schwab (CEO and founding partner, Altius Sports Partners)—and a pair of Power 5 athletic directors, who all view reform very differently from those advocating on behalf of the athletes—caution that athletes are likely to find out the grass is not greener on the other side. “This whole idea that the continued expansion of athletes’ rights [to include a minimum wage and the ability to collectively bargain] is necessarily better for the athletes is likely a fallacy,” Schwab said.

JWS’ Take: To be clear, no one we spoke to was against players being compensated. As one AD who asked to remain anonymous said: “When you have Brian Kelly going to LSU for $15 million, that creates a very [distinct] contradiction. You begin to think… is that fair, should the LSU players be getting some of that [money]? I say they should be, and we should figure out how they could.”

But both ADs and Schwab were in agreement that reclassifying college athletes as employees is not the answer. Schwab explains that those pushing for change in employment status—which would guarantee college athletes a minimum wage and enable them to collectively bargain for a percentage of revenues—are leaving out some key details. “If you’re an employee, you join a union and sit down to bargain, everything from wages, to health care, contract length, security clauses and other fundamental aspects of the athlete-school relationship—from scholarships, to visa status, financial aid, insurance, workers’ comp, terminations would be on the table for negotiation. So all of the benefits that college athletes currently enjoy could potentially be taken away.” And any benefits that remain—including the value of their education—could be taxed.

It is worth noting that revenue sharing only applies if there is revenue to share (50% of $0 is $0).

“If you’re in the MAC, and you’re spending $10 million net-negative a year to fund the football program, why are you going to pay more [in salaries] to lose more? Versus just going [to a lower level] and saying we’re not even going to have scholarships anymore, we’re just going to have need-based aid. If students want to come and have this [college sports] experience, they can come and pay to have this experience. It would be devastating for opportunities,” the unnamed AD said. It is worth noting that of the 1,000 or so schools that comprise the NCAA, about 800 of them currently use athletics to fill beds.

Heeke agreed that “if the model changes, it will dramatically impact [schools’] ability to support the opportunities that exist for thousands of young people.” Like the other AD, he does not believe universities will agree to underwrite additional losses for a football program already operating in the red and said there would probably “be a whole resetting of all other sports into more of a club program. There would be much more limited space [for Division I programs] with revenues going into the player labor force.” It’s also safe to assume if the players are being paid, college football rosters will also be closer in size to those in the NFL (as opposed to the 125 players many currently carry).

There are some D-I programs operating at a loss that would survive should this seismic shift occur. “It just depends on the school and the cash flow. Harvard and Princeton have broad-based sports programs that their alums fund. A university with an elite golf or tennis program might choose to keep playing golf [at that level],” the anonymous AD said.

College athletes being deemed employees will likely open the door to the seemingly inevitable breakaway of football’s biggest powers. “About 50 schools will spin off their football programs into licensed entities,” the AD said. “They will hire coaches and hire players and as part of [those players’] employment at [XYZ] Inc., maybe they have the opportunity to go to the [affiliated] school. Is that really going to be best [for an 18- to 22-year-old]?”

Heeke agreed a “break-off of the Division I football playing body” would likely occur. But he wasn’t convinced it would be 50 schools (or that the athletes would be students). “There could still be further dissection among the [Power 5],” he said.

While some football programs would balk at paying athletes, there are others (think: SEC football powers) that would likely welcome their athletes becoming employees. Remember, employees face repercussions when they don’t meet minimum performance standards (i.e. they can be terminated), and they will sign binding contracts, which would limit their ability to transfer out of the program.

[Sgt Hulk 13648]

20 hours ago, Harrison Bergeron said:

If they want to unionize fine. Stop the free tuition, books, housing, food, etc. Let the NIL pay for everyone's school.

This right here or just cancel classes altogether since it’s no longer about school and it’s AAA ball 

[Johnny Sack 8397]

9 hours ago, tx 3 putt said:

that big time ncaa brand doesn't get very far without the star players on the field / court 

Texas has been hammered dog shit for over a decade now.  Revenues have only gone way up.

[Armybrat 40744]

11 hours ago, David Dennison said:

And in no way will it devolve into political bickering. We're above that here.

Take that noise to the Sixth Street Journal forum.

😜

[thunderlounge 7758]

23 hours ago, ChickenNuggets said:

They are net beneficiaries of that brand, not net contributors.

Have you watched any of our games in, oh I dunno, the last decade plus?

Oh, wait. Wut?

Edited December 16, 2021 by thunderlounge

[Randolph Duke 4034]

27 minutes ago, Johnny Sack said:

Texas has been hammered dog shit for over a decade now.  Revenues have only gone way up.

College sports is first and foremost a live entertainment product. In live sports entertainment, there have always been very popular products that failed to deliver consistently in the competitive sphere. It is what it is.

If you want to talk about the lack of accomplishment given the resources, talk to those on the academic side. They see far more instances of gifted individuals failing to live up to their potential. And far more instances of the unexpected individuals who develop during their college careers.

The money rolls in because of increasing demand for the product. It happens when you have the only major live sports entertainment product in a rapidly growing market whose demographics are strongly shifted to the demographics the product is focused on. Kids between the ages of 18 and 24 do inexplicable things.

Welcome to life.

Meanwhile, Cincinnati is in the CFP with recruiting classes over the past four years that don't even average to being in the top 50.

Crazy, ain't it?

[BurntOrange&White 39661]

23 hours ago, ChickenNuggets said:

Not sure I can get behind collective bargaining and/or revenue share with athletes... The university of texas is a brand that extends well beyond what the players do on the field. They are net beneficiaries of that brand, not net contributors. imho. NIL fine, revenue share, not fine.

Agreed, sounds like socialism. No thanks communist!

[David Dennison 18659]

9 hours ago, sportsbay said:

How are they going to organize against businesses paying them for advertising or doing charitable work?  How do they organize against schools offering scholarships? This make little sense. 

A group of college athletes could bring the sport to heel if they organized and acted collectively.

That is a very big if, but it's doable with solidarity.

Edited December 16, 2021 by David Dennison

[TwiceHorn 31283]

Here's my objection to it, and it has less to do with "empowering athletes at the expense of colleges and universities."

First, I am deeply troubled by our (society's) willingness to spend absurd amounts of money on entertainment.  Someone pointed out that this was a key feature of the decline of Rome.

On the one hand, I am gratified to see educational institutions receiving vast sums of money for their athletic programs.  On the other, I am mortified by how it gets spent, and how little is "seen" by the educational arm.

Although it is increasingly inappropriate, I still see a bit of purity and nobility in "amateur" sports that I don't get from pro sports.  The above things, and the knowledge that ultimately the players are just doing a job takes the fun out of it.  I also don't find the "affinity" for a team resulting from its location in my city and its name to be very compelling.

So, I don't object in principle to players, who are a key participant in this now profit-making venture, receiving "their cut."

But I bemoan the crass commercialization of every gotdamn thing in this country.

[ChickenNuggets 1611]

13 hours ago, David Dennison said:

And in no way will it devolve into political bickering. We're above that here.

just wait till the player's union demands a change to the school song  

[FORTY NINE TO ZERO 2630]

We are going to get “back” right when they shut the entire sport down. Aren’t we? 
 

😑