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Politico
‘A nightmare for college athletics’
Congress may step in as dozens of states could allow NCAA athletes to be paid.
By Juan Perez Jr.
02/09/2020
College sports wants a new referee: Congress.
Some 30 states, from New York to Nebraska, are weighing competing
proposals on student athlete compensation, with their legislative
sessions in full swing. California already passed a law that says NCAA
players can make endorsements or pitch merchandise without risking
their scholarships or eligibility.
Powerful university leaders, student athlete advocates and the NCAA are
intensifying pressure on lawmakers to quickly settle how college
players should be paid.
All 50 states soon could have separate rules about college superstars
signing sneaker contracts or monetizing Instagram followers like the
pros. Players might lend their faces to car dealership promotions, earn
cash coaching sports camps or hire agents and lawyers to negotiate on
their behalf.
Those pushing Congress to move say such a mishmash of state laws would
create an uneven landscape for recruiting athletes. A school in one
state could offer a hot prospect better options than a cross-border
rival. The result might be monumental opportunities for young athletes,
or as some NCAA officials argue, an existential crisis for college
sports.
“Even the NCAA acknowledges now that federal legislation is necessary,”
said Sen. Chris Murphy (D-Conn.), a member of a recently formed
bipartisan Senate working group studying compensation for student
athletes. To set some kind of federal standard, lawmakers will have to
navigate a thicket of complex implications for tax, antitrust and
gender equity laws.
Pushing major legislation through Congress this year will be tough,
Murphy acknowledged. “What's different here is that state legislatures
are going to act, and it will be a nightmare for college athletics if
every state has a different law regarding the ability of students to be
compensated. So there's going to be an imperative for a federal
solution here that might create the aperture for a bill to get done.”
The NCAA men’s and women’s college basketball tournaments kick off in a
few short weeks, with March Madness serving as a marquee money-making
season for the association and its schools. Tournament television and
marketing rights fees, plus championship ticket sales, supply the
nonprofit NCAA with hundreds of millions of dollars in annual revenue.
The spectacle only emphasizes how much is at stake for the college sports machine.
Top administrators and athletics officials gathered in Anaheim, Calif.,
in late January to debate internal rules on player benefits for the
NCAA’s three divisions, which organize more than 1,000 participating
schools based on the number of sports and levels of financial aid
available to athletes.
Meanwhile, the powerful association, which rakes in about $1 billion in
annual revenue that’s largely shared with schools, hinted at a lobbying
blitz among states to stop patchwork laws from governing how college
players can profit off their so-called names, images and likenesses.
But the tone inside Anaheim’s conference underscored the soul-searching
about the role college athletics should play in higher education. The
question is whether the NCAA can keep pace with a social justice
movement led by former players, knowledgeable attorneys and sympathetic
lawmakers to let big-time college athletes earn far more than the value
of scholarships and modest living stipends.
“I don’t think college sports are irretrievably broken. But I think the
basic feeling that I have is just a basic question of fairness,” said
Mark Lewis, a former NCAA executive vice president who once supervised
the association’s lucrative championships and business initiatives.
“I think the problem has just become too complex, and with too diverse
a number of constituents. It takes external forces to drive change
sometimes.”
A growing congressional chorus also suggests something must change.
A Senate subcommittee hearing set for Tuesday will bring NCAA President
Mark Emmert, Big 12 Conference Commissioner Bob Bowlsby and University
of Kansas Chancellor Douglas Girod to Washington to lay out their views.
Rep. Donna Shalala, an experienced former university administrator and
Florida Democrat, has sponsored legislation to create a 17-member
commission dedicated to investigating the anxious relationship between
college sports and higher education.
Murphy along with Sens. Cory Booker (D-N.J.), David Perdue (R-Ga.),
Mitt Romney (R-Utah) and Marco Rubio (R-Fla.) are part of the recently
formed working group to study student athlete compensation. Murphy’s
office has excoriated the NCAA in a series of reports published this
past year.
“There’s more Republicans on that list right now than there are
Democrats!” one Senate staffer exclaimed to POLITICO about that working
group’s roster.
Such momentum has fed anticipation that Congress could soon act to
intervene in an enormous private market. New rules must apply not just
to Division I revenue-generating juggernauts, but also smaller schools
where sports are subsidized by student fees and fill an entirely
different role in campus life.
“It’s a historic time,” said Ramogi Huma, a former UCLA football player
who now leads the National College Players Association advocacy group.
“The NCAA is going to have a choice. It’s either going to embrace the
change, or it’s going to plunge into irrelevance on this issue.”
Time is limited. California’s law won’t take effect for three years,
but Florida is weighing a player pay bill that would launch in July. In
Michigan, state lawmakers recently amended their proposal to begin in
2021.
Huma’s group suggests a 2020 effective date in model legislation it
pitches to state governments, and demands that any national law at
least match California’s sweep.
“Our perspective for federal legislation is ‘do no harm.’ If Congress
is going to act, it should act in support of the rights and freedoms
that states are moving to provide their college athletes,” Huma told
POLITICO.
“I would say federal legislation is possibly the greatest threat to the
push towards these rights and freedoms, but it can facilitate it.”
New NCAA rules granting players the potential to benefit from their
names, images and likenesses aren’t anticipated to land until 2021, and
will align with boundaries set last year: Athletes can’t be handed a
check just for playing in a game, they won’t be university employees
and colleges will be barred from offering athletes “inducements” to
enroll at a given school.
But rehashed NCAA policies won’t resolve competing state laws. New
York’s proposal would require colleges to split 15 percent of athletics
ticket revenue among athletes. Nebraska’s doesn’t. Association
officials argue uneven regulations could challenge scholarships’ status
as non-taxable income or even threaten low-income athletes' access to
Pell Grants.
The NCAA argues the furor puts an essential college sports trait at risk.
Student athletes do not get paid for playing, beyond tuition and living
expenses they sometimes receive. They’re barred from signing sneaker
deals or autographs to make money on the side. That enforced concept of
“amateurism” forms the core of the college sports product. Today’s
debate promises to alter that idea in huge ways.
"It’s an existential threat to the NCAA, and I would say to collegiate
sports altogether,” Daemen College President Gary Olson said of the
environment to a packed room of college administrators in Anaheim.
“I think at the end of the day, if we could get a favorable bill
through Congress that settles a lot of this, and it’s something that
we’re allowed to participate in creating, I think that’s the best way
forward.”
John DeGioia, president of Georgetown University, told POLITICO that
preempting state laws is a key element of the NCAA’s federal wishlist.
“Just because if the state laws went into effect, it’s going to be
chaos,” he said.
One university president, speaking on background, said the NCAA ideally
needs some kind of exemption from federal antitrust laws. That promises
to be a hot topic. Federal courts have so far ruled NCAA amateurism
rules don’t violate antitrust law, but securing a federal carve-out for
the association would require a big lift.
“We find ourselves in this constant state of antitrust litigation,
where anything that we do ends up being scrutinized by someone, by a
court that's got a case brought by someone against the association
alleging an antitrust violation,” one NCAA official speaking on
background told POLITICO. “And so we've got to find a way to be able to
modernize and not have to worry that our efforts to modernize will put
us in court over and over and over again.”
Lewis, the former NCAA executive vice president who is now advising
Huma’s college players group, said today’s predicament is the product
of a college sports industry that spent more than 30 years focused on
maximum monetization.
“The challenge with college sports is you’ve made everything else professional, except the labor model,” he said.
“Do we really not want kids to benefit from a system that generates
billions of dollars a year, and can afford to pay people millions of
dollars a year?”
Organizations, including the Knight Commission on Intercollegiate
Athletics and The Drake Group's higher education think tank, have
outlined potential solutions in recent years.
The NCAA has also suggested it might pursue litigation, based on an
argument that conflicting state laws illegally interfere with
interstate commerce in a way that only Congress can authorize.
“It’s a threat to their hustle,” Huma said of the NCAA. “It’s a threat
to how they’ve been able to monopolize every commercial dollar, and
then keep the players who are sacrificing their bodies away from
participating in any of those spoils.”
The association plans to offer some updates by April. Emmert, meanwhile, says he’s talking to elected officials.
“Whether or not Congress is the right forum in which to resolve this
will have to wait and see,” Emmert told reporters in Anaheim. “But I
think that we're going to absolutely need their help in getting there.
What that looks like is still to be determined.”
“We’ve got to move this along. It's a difficult time in Washington,
D.C., obviously. But people are listening and they’re thinking, and
there's a lot of good ideas being brought forward.”
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