Fair Pay, or Pay to Play?

By Robert Goss


Over the last year several attempts have been made to get student athletes paid. Is it not enough to cover the costs of tuition, room and board and other expenses related to attending university? Should players be allowed to earn income from jersey sales and endorsements? Schools bring in revenue from sports but they also have expenses and a net profit or a net loss, how do you pay athletes with without profit? Have we really sat down to look at the numbers and the downside to the bills put forward in California and New York?


Currently the NCAA prohibits any athlete on a scholarship or tuition assistance from receiving endorsements or the sale of their image. This also ties into the strict rules regarding college recruiting and bribery. Schools have had titles stripped and records erased as a result of engaging in recruiting scandals. The FBI found schools like Arizona, Washington, NC State, Kentucky (to name a few) had paid top recruits a lump sum to play for them. According to SI there were FBI wiretaps that have exposed a potential $100,000 payment being made to basketball player Brian Bowen in order to secure his commitment to Louisville. Are we expecting the bribes to stop when players start getting paid? The Fair Pay to Play bill in California will not be paying athletes hundreds of thousands of dollars and neither will the New York bill.

Let’s look at California and their existing law regarding student athletes. Existing law “Student Athlete Bill of Rights” which requires 4-year schools who average $10 million or more in media revenue to comply. These schools must renew scholarships, cover health insurance costs, and cover medical treatments for any sports related injury. The remaining portion of the existing law follows the NCAA bylaws regarding bribery. Currently California SB206, the Fair Pay to Play bill, which was proposed by the California Legislation and has been signed by the Governor. This legislation doesn’t go into effect until 2023 and would exclude community colleges. The bill allows student athletes to make money from their image/likeness, which allows them to take on endorsements. The endorsement deals are however handcuffed by the school’s own agreements/endorsements and each player must present the endorsement deal to the appropriate school official in order to prevent conflicts. I.E. if the school is sponsored by Nike you can’t do commercials for Reebok or Under Armour. The legislation also allows the athlete to obtain an agent/representative. Schools will not be allowed to revoke scholarships from players who obtain endorsement deals. The NCAA bylaws would be in conflict with this new legislation and would have to either revise its bylaws or prevent teams in California from participating in NCAA sanctioned tournaments, bowl games, etc.


Now let’s move to New York where state Senator Kevin Parker is proposing a bill, NY S6722A, to allow student athletes a 15% chunk of their school’s athletic revenue. I think we should look at Syracuse University since they are probably the biggest money maker in the state when it comes to athletics. In 2016-17 Syracuse brought in over $90 million in revenue which sounds amazing if you are the starting running back or point guard looking for your big pay day. However, 15% of $90 million would be $13.5 million that would go to the athletes at Syracuse. No, not just the best athletes, and not just the teams making the money, it would be distributed evenly to all student athletes. Title IX would make sure that men’s basketball and football players would not be the only ones making money, women athletes would also be paid and in turn would then justify the rest of the male athletes inclusion. Syracuse has approximately 808 student athletes, including women and would mean that $16,708 would be paid out to each athlete based upon revenue numbers in 2017. Schools don’t just take that revenue and stash it away they also spend money on sports facilities, travel expenses, trainers, etc. and some schools use that money for new dorms or school buildings as well. Revenue does not equal profit, profit is the difference between revenue and spending. Just consider Syracuse spending $71.8 million that same year and earning a profit of $19.6 million instead of only seeing the revenue. Would the schools then decide not to offer scholarships anymore? Or would there only be partial scholarships based upon the payment made to the athlete?



The NCAA wants all teams to follow the same standards/rules of recruiting and this would be a violation or conflict of interest. However, the NCAA is apparently looking into allowing changes to their bylaws to accommodate the California law. We don’t know what changes, if any, will be made and the California legislation would still be impacted by Title IX which would require endorsements to be split between a male and a female athlete just like the scholarships are split. In 2023 if the NCAA has not opened the door to player income as written in California, schools like Stanford, Cal, UCLA and USC would become ineligible to compete in the NCAA and would lose revenue since their teams would be barred from the basketball tournaments and bowl games. The same would apply to New York schools if the NY bill were to become law. Other states have started the push to create their own legislation and if the NCAA doesn’t lead the charge on this now they will be losing out and without a national standard players and schools will be confused and lawsuits will be filed.


The California bill provides a common-sense approach to allowing student athletes to make income off of their own image/name without impacting the school’s ability to still treat the athletes as students rather than employees. The New York bill on the other hand is limiting and when revenue is down the players make less and all players make the same which would cause controversy since the bill prevents players from making money on their own image/name. I think the NCAA will eventually incorporate individual endorsements and profit from identity, but I don’t think that the socialist New York bill benefits the student athlete as individuals and it would spark future legislation similar to California’s bill. Let us not forget that by 2023 the XFL, who has no rules regarding college play, may very well be established and could also provide an option for young athlete’s looking to make more than a few endorsements or a measly $16,000.




CALIFORNIA

KTLA 5 Morning News – Sept 9, 2019

Associated Press & Eric Spillman

“The bill would let college athletes hire agents and be paid for the use of their name, image or likeness. And it would stop universities and the NCAA from banning athletes who take the money.”

“The Assembly passed the bill 66-0 on Monday, a few days after the bill got an endorsement from NBA superstar Lebron James, who did not go to college.”

LeBron James – Twitter

“Or … because of this bill, you can work with everyone to create a national policy that is fair to athletes,” James tweeted

Business Insider – Sept 20, 2019

Jasmine Harris

https://www.businessinsider.com/heres-how-college-athletes-getting-paid-would-work-2019-9

“Players are also prevented from generating any kind of compensation around their image or likeness while they’re in college, which — for many of them — is going to be the only time when their likeness or their image has any economic value at all. 

Right now less than 2% of players end up going pro. And so you’ve got this entire industry that’s built on generating revenue off the athlete through ticket sales, sponsorship deals with apparel companies, and TV distribution deals. “

California – SB206

https://leginfo.legislature.ca.gov/faces/billAnalysisClient.xhtml?bill_id=201920200SB206

Existing law: 

1) Enacts the Student Athlete Bill of Rights, which requires intercollegiate athletics at four-year institutions of higher education that receive, on average, $10 million or more in annual revenue derived from media rights, to comply with the prescribed requirements related to student athletes’ rights. These requirements include provisions concerning when intercollegiate athletic programs are required to renew scholarships, cover health insurance costs, and cover medical treatment expenses for student athletes who have experienced a sports-related injury. (Education Code § 67450) 

2) Prohibits any person from giving, offering, promising or attempting to give money or other item of value to a student athlete or member of the athlete’s immediate family to induce, encourage or reward a student athlete’s application, enrollment or attendance at a public or private institution of higher education to participate in intercollegiate sporting activities. (EC § 67360) 

3) Prohibits any person from giving, offering, promising, or attempting to give any money or other things of value to any particular student athlete or member of the immediate family of the student athlete for either of the following purposes: 

a) To induce, encourage, or reward the student athlete’s application, enrollment, or attendance, at a public or private institution of postsecondary education in order to have the athlete participate in intercollegiate sporting events, contests, exhibitions, or programs at that institution. 

b) To induce, encourage, or reward the student athlete’s participation in an intercollegiate sporting event, contest, exhibition, or program. These provisions do not apply to student athletes who receive any money or other thing of value from a higher education institution offered in accordance with the official written policy of that institution, which is in compliance with the bylaws of the National Collegiate Athletic Association (NCAA). (EC § 67360) 

4) Defines “student athlete” as an individual who attends an elementary, junior high, high school, or postsecondary educational institution, and who participates in any interscholastic athletic program in California, including an individual who receives scholarship funds for his or her athletic participation and an individual who does not receive scholarship funds for his or her athletic participation. (EC § 67360 et seq)

This bill: 

1) Exempts community colleges from the provisions of this bill as it relates to student athlete compensation and representation in institutions of higher education. 

2) Prohibits any entity with authority over intercollegiate athletics from preventing a student athlete from receiving compensation for the use of their own name, image, or likeness. This bill provides that earning compensation through athletic endorsements shall not affect the student’s scholarship eligibility.

3) Prohibits any group with authority over intercollegiate athletics from preventing a postsecondary educational institution from participating in intercollegiate athletics as a consequence of that institution allowing its student-athletes to earn athletic endorsements. 

4) Prohibits any organization with authority over intercollegiate athletics from providing prospective student athletes with compensation in relation to the athlete’s name, image, or likeness. 

5) Prohibits any entity with authority over intercollegiate athletics from preventing a student athlete from obtaining professional representation in relation to their college athletics, provided that the professional representation is in compliance with federal law and is performed by persons licensed by the state. 

6) Prohibits the revocation of a student-athlete’s scholarship as a consequence of receiving endorsements, or as a consequence of obtaining professional representation as authorized under these provisions. 

7) Prohibits a student athlete from entering into an athletic endorsement contract that is in conflict with a provision of the athlete’s team contract. 

8) Requires a student athlete who enters into an endorsement contract to disclose the contract to an appropriate official of the institution at which the athlete is enrolled. 

9) Requires an institution, upon asserting a conflict between an athlete’s athletic endorsement contract and the team contract, to inform the athlete or the athlete’s legal representation concerning the provisions that are in conflict. 

10) Prohibits a postsecondary educational institutions athletic program, other than community colleges, from establishing a contract that prevents student athletes from participating in athletic endorsements. 

11) Requires the Chancellor of the CCCs convene a working group to do both of the following:

a) Review existing CCC bylaws, state and federal laws, and NCAA bylaws regarding a student athletes’ use of athletic endorsements. 

b) Submit a report of findings and policy recommendations relating to the above to the CCC Athletic Association and the Legislature on or before July 1, 2021. 

12) Provides that #1-10 are to become effective on January 1, 2023.

13) Makes legislative findings and declarations. 

NEW YORK

Crain’s New York Business – Sept 18, 2019

Ryan Deffenbaugh

https://www.crainsnewyork.com/politics/states-college-athletes-could-be-paid-under-brooklyn-lawmakers-proposal

“New York’s bill would actually go a step beyond California’s by requiring that college athletic departments give a 15% share of annual revenue to student athletes across all sports. He said the bill would also use part of its revenue collections to establish a fund for college athletes who suffer severe injury. “

Syracuse.com – Feb 2018

Chris Carlson

https://www.syracuse.com/orangesports/2018/02/syracuse_athletics_reports_record_revenues_how_much_does_su_spend_on_each_sport.html
  • Syracuse University – over $90 Million in revenue (2016-17)
  • Syracuse University – $71.8 Million in spending
  • Syracuse University – $19.6 Million in profit
  • Syracuse total athletes (17 sports & 808 +/- men and women)

https://www.collegefactual.com/colleges/syracuse-university/student-life/sports/

Sports Illustrated – Feb 14, 2018

Daniel Rapaport

https://www.si.com/college-basketball/2018/02/14/college-basketball-recruiting-scandal-fbi-probe-violations-punishments

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