Antitrust cases could blow up college system

Posted by Mike Florio on July 6, 2014, 5:22 PM EDT
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Back when the effort to unionize Northwestern captured headlines and sparked debates regarding whether college players should or shouldn’t be paid, a much more important effort to change the system through litigation was beginning to percolate.

Eventually, it could boil.

As recently explained by Liz Mullen and Michael Smith of SportsBusiness Journal, the folks who run college sports programs have far greater concerns about pending antitrust litigation than they do about the unionization push or the Ed O’Bannon lawsuit regarding the use of player likenesses without compensation.

“We’ll look back on O’Bannon [player image use] and the attempts at unionization as insignificant,” Notre Dame A.D. Jack Swarbrick recently said at a convention in Orlando.  As to the antitrust lawsuits, Swarbrick said, “That’ll be the game-changer.”

The effort to change the game comes from an argument that the placement by the NCAA of limits on what players can be given violates antitrust laws.

“Our case is designed to remove the restrictions from men’s basketball and football in Division I in all the schools so they can enjoy a free market to make their own decisions about compensation issues,” Kessler told Mullen and Smith.

In other words, schools wouldn’t be allowed to continue to hide behind the tuition/room/board routine, which makes labor much more affordable than if colleges were competing with each other not by putting the right words in a recruit’s ear but the right number of dollars in his pocket.

Ultimately, it would force a redistribution of the massive revenues generated by college programs in a way that would trim the fat that currently goes to coaches and administrators and pretty much everyone but the people directly responsible for ticket sales and rights fees.  And while the game would surely change, the games even more surely wouldn’t end.  And the new system would be far more fair to the kids who are providing the services for which fans and networks are paying big money.

And we continue to mention this from time to time because massive changes to the NFL’s free farm system will have an impact on the NFL.  Which would ultimately result in the NFL creating its own farm system.

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35 responses to “Antitrust cases could blow up college system”

  2. So creating a billion dollar industry on the backs of 17-22 year old kids who you don’t pay isn’t a healthy way to sustain an industry?

  3. “And while the game would surely change, the games even more surely wouldn’t end.”

    I would think that games may end at some schools, which would deprive kids of a college education…you know the 99% that will not be playing in the NFL.

  4. Solution:

    Make the NFL have a developmental league.
    Allow them to play on Saturdays.
    Let kids in college, that are actually there for school, have the scholarships.
    Networks would pay for NFLD League.
    Smaller networks could then afford NCAA games.
    Because smaller networks wont pay anywhere near as much, schools will not make the insane money they do now, but kids that want to play, can.
    Everyone wins.

  5. Whenever I see posts saying “a scholarship should be enough for these guys” I wonder what communist country they live in.

    Here in the United States, we have an economy based on a free market. There’s not supposed to be price fixing, ie a bunch of schools banding together and saying that all the players are entitled to is a scholarship.

    I see nothing wrong with a system where the colleges, as individual institutions, decide whether or not to pay players and if so, how much.

    I also see nothing wrong with players being allowed to accept gifts, just as any other student is allowed to.

  8. Redistribution of revenues?!? Why, that’s SOCIALISM! We must band together to STOP this! Our nations foundations are at risk! This is NOT what our founding fathers would have wanted.

  9. It’s time for the NFL to come up with a junior program, it’ll be 4 years and players may enter it right after high school (since they have to wait 3 years before entering the NFL draft) players in the junior league automatically become eligible for the NFL draft after their 3rd year, however their NFL team may return them to their junior team for a 4th season.

    Players that want to go get an education can still go the NCAA route and players that want to focus strictly on football can go to the junior league. This is how it’s done in hockey and it seems to work out fine.

  11. Or it would go the other way and all schools would follow Division III. True amateur athletics. As Herb Brooks said, “The name on the front of the jersey is a hell of lot more important than the name on the back!”

  12. Excellent. Then we could do away with the sexist title IX BS that forces taxpayers to fund “athletic” programs that consistently lose money.

  13. I am both for an against paying these kids to play. There is a lot asked of these kids both on and off the field of play. I don’t agree that this should only be limited to the big two (football/basketball) though. It is no less demanding of time for other sports. I feel that these kids should be paid a minimum wage in order to keep it fair for all schools. One of the things that makes college sports so great is that it is more or less the coach selling a program and a program selling itself. I would hate to see only the “rich” schools have a chance to win and everyone else either drop their program or just become pick up games.

  14. Maybe the simplest solution would be for the students playing on TV to get a all portion of the money made off of the game. I don’t know. Just throwing ideas out there.

  15. It makes no sense for publicly funded schools to pay athletes, does it? If a private citizen wants to pay a college athlete, I see that as none of my business. Yes, it could get messy. Again, not my problem.

  16. College Football won’t be affected by these lawsuits. They will still survive because they generate so much revenue. They will change, but they won’t go anywhere. The sports that will suffer will be the ones that football revenue supported. Say goodbye to ping pong and badminton.

  17. I read where the NCAA took in 16 billion last year. That’s billion with a B. Let’s see, university presidents make around a million dollars a year, some more, alot more. Coaches make millions. Nick Saban, around 6 million a year. The student players got paid, ZERO! How can this be fair?

    And there are people who want to keep it this way.

  18. The biggest crooks are the “Bowl Game Commissioners” that make 750k for overseeing a single game per year…

  20. I’d prefer that the NCAA make a deal with Congress in exchange for them sinking the money back into the education part of the schools. You know, the reason the schools are supposed to exist in the first place. I have never heard of a push to give students a percentage of research grants that they help with after all.

  23. Power to Kessler and the unfairly punished players!!!

    The NCAA isn’t there to help players. It’s there to fail them. The proof is around.

  24. It’s college, not a corporation. Tuition/room/board has a monetary value, often which is more than I’ve made in some of my post-degree jobs.

    The money really isn’t there to be spread around. Remember that the “revenue sports” help support the”non-revenue sports.”

    Look at UCONN. A couple years ago they had a bowl game and bball national championships. In that banner year the athletic department, after all expenses, made a profit of less than $2million.

    Even something as small as the so-called “full cost of tuition” (which essentially means covering some of the fees not included in tuition) for revenue sport athletes would have put the department in the red, and other programs would have suffered.

  25. – Redistribution of revenues?!? Why, that’s SOCIALISM! –

    No, this would be in step with a free market, something we are not in now (Crony Capitalism), so this will open up the market toward true competition. Another outrage that can be improved along these lines is that the NFL can start paying taxes– what are they, a religious organization?

  26. Fine and watch 95 percent of college football players find out that their services are worth nowhere near the cost of tuition,room and board. Of course Florio in his power to the workers rant is too dim to see this.

  27. Basketball and Football are the only sports that are in the black, so if you take money from those sports,you have no money to fund all the other sports. Goodbye Olympic medal count.

  28. It it far past time that we ended indentured servitude known as college sports. Athletes are tied to the school with one-year renewable contracts. What they receive — tuition, room & board — barely scratches the surface of the top players’ market value.

    However, to think that these players are not paid is the height of naiveté. The underground economy in the big money sports, football and basketball, has existed for generations. Right now, the going price for a top basketball player is $200,000, not a bad payday, but a thin slice of what these players would get if they were eligible for the NBA draft like LeBron, Kobe, and Kevin Garnett.

  29. Take the games off TV, pull the scholarships for athletes entirely. The athletes are right, they shouldn’t “work” for free. They also shouldn’t be promoted for free and given free publicity for their next job as a professional athlete. Free education, free exposure to future employers, free room and board. You’re right, these poor athletes are victims. Just more costs that are going to be passed on to non athlete students now. The whole university system in this country is a joke.

  30. My prediction:

    The following language from Stevens’ holding in N.C.A.A. v. The Board of Regents of the University of Oklahoma (holding against the NCAA could NOT monopolize television contracts) will lead to a primarily favorable decision for the NCAA:

    ….the organization (NCAA) must be allowed to protect the “revered tradition of amateurism.”

    Notwithstanding a primarily favorable holding, change will still be in the offing.

  31. People who make money from HS and College Athletes:

    Colleges
    video game companies
    Folks like Mel Kiper and the thousands of websites like his, who sell subscriptions based on scouting reports and recruiting reports.
    Huge Multi-national corporations
    coaches
    commentators
    Clothing companies

    People who don’t make any money:
    Athletes

  32. I’m all in favor of people being fairly compensated for their labor.

    But I’m having a hard time accepting that the standard scholarship isn’t enough. Especially since those who aren’t on scholarship exit with anywhere from $75,000-$150,000 in debt–with little chance to earn a seven-figure salary at any point of their careers, and zero chance to earn it in their first job out of school.

    Not to mention all the little perks that come from being a scholarship athlete over and above the scholarship itself, like priority scheduling for classes, expanded meal plans, free tutors, athlete only use of certain university facilities, and free gear for which the rest of the student body has to pay.

    Add it all up, and these guys are getting the equivalent of a $40,000+ salary yearly at a state school, and significantly more if they are not state residents or attending a private university.

    How many people working in the real world get that sort of compensation package from a company that generates the same type of profit as the average NCAA football/basketball program? Not many.

  33. Sandy, the fact that students leave with 75-150k in debt (some a quarter of a million!) from college tells you something is very wrong with the educational system of higher learning.
    But Sandy consider this. The state of California had to pass a law in 2013 saying any scholarship student athlete, if injured while playing or practicing, the school has to continue with that scholarship, plus pay for the student’s medical bills. Before that, the scholarship was cancelled and the student had to pay all the medical bills. The NCAA and the colleges and universities did NOTHING, to help the students. That’s why they passed the law. Nobody cared. This whole system right now is terrible.

  34. I think this will be a case of ‘Be careful what you ask for…”

    All paid tuition will be a form of salary, so all scholarships and marketing revenue will be taxable. Health care laws will apply and ordinary income tax on all wages. Social Security and State and local taxes. Perhaps, like the NFL, the player will have to pay a part of their salary to every state/locale that they play in.

    Kids will need full time CPAs to keep them out of trouble. Just think of the IRS calling a player in for an audit, just before the big game.

    The government will be the big winner here.

  35. Kids go to college to play football. Getting an education is secondary or non existent. So why bother? Stop playing football in college and see what happens. Would be interesting. AAA NFL on Saturdays and the Major leagues on Sundays. But who would attend the minor leagues on Saturday?
    The college players are about ready to s*** where they live.

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