Wednesday, July 30, 2014

THE NCAA UNDER FIRE


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BY RONALD FOX

NOTE:  A pre-edited version of this article was circulated by mistake.  Please read this version.

In a previous post (Justice for College Athletes: Northwestern Football Players Take on the System), I applauded the fight of Northwestern football players to win the right to form a union. The March decision by the Chicago office of the NLRB to declare that college athletes were workers, and not “student athletes,” has opened the door to a process that could ultimately lead to college athletes enjoying not only the right to organize into unions, but entitle them to such benefits as unemployment insurance, workman’s compensation benefits, and a portion of the revenue generated by college sports.   While the College Athletes Players Association (CAPA), led by former Northwestern quarterback Kain Colter, is legally challenging Northwestern University, the real target by implication is the NCAA. The CAPA action is just one of five ongoing legal challenges to the power and reach of the NCAA. This post will update the various legal cases.
 

CAPA v. Northwestern. As I mentioned in my previous posting, the NLRB ruling declaring college athletes to be workers has been appealed by Northwestern to the full NLRB. A decision is not expected for several months. 
 
O’Bannon v. NCAA. Former UCLA basketball star Ed O’Bannon is the lead plaintiff in an anti-trust lawsuit originally filed in 2009 that is currently in trial. The lawsuit was certified as a class-action when O’Bannon was later joined by a number of current and former players, including Bill Russell and Oscar Robertson. The suit claims the NCAA violated anti-trust laws by conspiring with its partners to prevent college athletes from sharing in TV broadcast revenues and being compensated for the use of their names, images and likenesses in video games. The plaintiffs are seeking an injunction preventing the NCAA from prohibiting universities from paying players for their publicity rights. The NCAA is steadfast in maintaining that players are student-athletes compensated by receiving a free education. They contend the appeal of college sports lies in amateurism and that amateur rules must not be compromised.
 
As I write this, attorneys for O’Bannon plaintiffs and the NCAA have submitted final written closing statements to U.S. District Judge Claudia Wilken, who is expected to rule in the case sometime in August. Given the arguments presented by attorneys for both sides, Wilkin will have to decide whether the benefits the NCAA and its Division I schools derive from compensation limits outweigh the economic harm that those limits do to major university football and basketball scholarship athletes. In arriving at her decision, she may consider whether the NCAA can accomplish its goals with less restrictive alternatives.  

Sam Keller
Keller v. NCAA. In a revenue-sharing lawsuit similar to the O’Bannon case, except that it concentrates on video-game revenues.  Sam Keller, a former Nebraska and Arizona State quarterback, sued the NCAA and the Electronic Arts and Collegiate Licensing Company (EA Sports) on behalf of former, current and future Division I football and basketball players claiming that athletes’ likenesses were illegally used in video games. In a settlement announced on June 9, the NCAA agreed to pay $20 million to plaintiffs whose images had been used. This amount will be added to the $40 million EA Sports agreed to pay the O’Bannon plaintiffs last week. This represents the first time in the history of the NCAA that the organization will be paying college athletes for the profits generated by their play on the field.  

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Shawne Alston
Alston v. NCAA. This is another class-action case brought against the NCAA by former West Virginia running back Shawne Alston, acting on behalf of former football players in the Big 12, Big Ten, Pac-12, ACC and SEC. The lawsuit alleges that the NCAA “violated antitrust laws by agreeing to cap the value of athletic scholarships below the actual cost of attending school and far below what the free market would produce.” The Alston class-action lawsuit seeks to eliminate the NCAA’s present by-law limiting financial aid to the currently-defined grant-in-aid value. It seeks damages for former players for the difference between what is provided by scholarships and the actual cost of attendance. The plaintiffs must be successful in key pretrial motions before a trial can begin.
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Martin Jenkins
 
Jenkins v. NCAA. In a suit similar to the Alston case, Martin Jenkins, a senior defensive back at Clemson and three former players filed suit on behalf of current and former football and basketball players at power conference schools asking whether an open market should determine financial aid awards and potential player compensation, such as salaries and post-college access to a revenue fund. In raising the question as to whether college athletes should be compensated for travel and other student expenses and not just tuition, room-and-board and books mandated by the NCAA, it accuses the NCAA and the five power conferences of “price-fixing” by capping scholarship amounts. This, they argue, restricts competition. Its intent is to strike down rules that prevent players from getting a share of the revenue generated by major football and basketball programs. In contrast to the Alston case, which is seeking to collect damages, the Jenkins lawsuit seeks to change the college scholarship system. The case was filed in March and is moving through the legal process. 

There’s a great deal on the line for college athletes and the NCAA. A number of possible scenarios that could result from the lawsuits, depending on the outcomes of the ongoing legal cases, include:  

1. The plaintiffs could lose their cases, leaving the status quo intact. This means college scholarship athletes will continue to be considered student athletes bound by NCAA strictures. This would obviously be the preferred result for the NCAA.

2. The plaintiffs win the revenue sharing, antitrust lawsuits against limits on scholarships, and the right to unionize cases. The amateur model of collegiate sports as we know it will have ended. In the extreme, collegiate sports will be converted into a free-market system with revenue-generating teams and athletes being paid for the revenues they help generate. Universities would be free to raise the financial ante in acquiring coveted athletes. Such a system would undoubtedly benefit the wealthier schools. Not only would this likely compromise the competitive balance in college sports, but altered spending priorities could result in less accomplished players getting less than they receive now. Such a ruling could be a death knell for the NCAA.   

3. Most likely, the outcomes of the lawsuits will be mixed, making for a complex and confusing legal framework.  

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Regardless of the legal rulings in the five pending lawsuits, the barrage of challenges against the NCAA and its member universities has provoked a national debate about the rights and proper compensation of college athletes.  The debate is more focused than it has been in the past and it appears the NCAA is responding.          

Big 12 schools Commissioner Bob Bowlsby, a vocal advocate for NCAA reform, is spearheading a movement among the Big Five conferences to obtain greater autonomy from the NCAA. A letter sent by Pac-12 presidents to the ACC, Big Ten, Big 12, and SEC, which lays out a vision all appear to endorse, calls for a change in NCAA rules to allow for full cost-of attendance scholarships, continuing education and medical care, and a decreasing of time commitment and demands placed on athletes during and outside of playing seasons. This time they are finding a more receptive NCAA.  

In April, the NCAA’s Division I Board of Directors endorsed a draft proposal that would give the 65 schools in the Big Five conferences the ability to provide athletes with greater benefits and resources.  After outrage was stirred when Connecticut star point guard Shabazz Napier complained about going to bed hungry some nights, the NCAA announced a change of rules which would permit unlimited meals to scholarship athletes. And in an apparent reaction to the O’Bannon class-action lawsuit against the NCAA, Kris Richardson, the NCAA’s director of academic and membership affairs, informed university officials that athletes no longer needed to be asked to sign a statement allowing the NCAA and other groups to use their names and likenesses for promotional purposes. (The NCAA said these changes had been planned for some time).  

On July 9, NCAA President Mark Emmert told a Senate Commerce Committee he supports an end to the standard year-to-year scholarships and said that scholarships should cover not just the basics, such as room and board, but the full cost of attending college. He also called for better health, safety and insurance protocols. He hinted such changes could come about if the big five conferences decide to remake their decision-making structure to allow for more autonomy from the NCAA, which they appear likely to do.  

On July 18, the NCAA, after months of intense debate, announced that its Board of Directors will vote on August 7 on a formal proposal to give schools in the Big Five conferences more influence over college rules. If they vote in the affirmative, the premier schools in college sports may finally gain the autonomy they’ve been seeking over some of the most contentious contemporary issues, including the authority to give their student athletes more money and benefits.  

Individual universities are also responding to growing pressure. For example, in June, the University of Indiana announced an athlete “bill of rights” guaranteeing free tuition for life rather than the customary one-year scholarship. USC said it would provide four-year packages to its scholarship athletes in football and men’s and women’s basketball.   

So far the Big Five conferences have attempted to make changes while remaining within the existing Division I framework. Their patience, however, is wearing thin. Bowlsby referred to “much more draconian” options, including creating a separate subdivision or completely breaking away from the NCAA.   The NCAA would be wise to institute the called-for changes, as its future existence may be at stake.

Not all schools will be pleased if the Big Five get their way. An unprecedented increase in scholarship benefits and resources will undoubtedly advantage the bigger, wealthier schools, which many believe is their real intent. Boise State president Bob Kustra admitted as much in a letter released to the media in which he referred to the proposed NCAA reforms as an attempt to “create a plutocracy” that would compromise the NCAA’s long-held commitment to maintain competitive balance.  

Such is the conundrum reformers are facing. How do you make changes that improve the rights, compensation, and influence of college athletes, and make universities less vulnerable to future lawsuits, without in the end creating a plutocracy in college sports? Our political system has erred on the side of plutocracy; let’s hope college sports don’t go down the same path.    


NOTE: I will update Phronesis readers on legal developments in the various cases against the NCAA as they unfold.




















































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