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TOP STORIES THAT I WAS WATCHING THIS WEEK

NCAA statement on compensation for Name, Image and Likeness–The NCAA came out this week and said that they were going to start to examine how to allow athletes to receive compensation for their Name, Image and Likeness.  However, if you read the NCAA’s actual statement about the situation, you will see that it is truly full of gaping holes.  Take a read here as I outline some of the problems with the way that NCAA is going about this process.

LEVEL FIELD OR FREE MARKET—After you read the article above, take a read through this analysis about the only two options that are really left for college sports: 1) A level playing field; or 2) A free market system.  Are you ready for these changes? Well, it doesn’t matter because you will have to choose a side! You will see the arguments for each side and then we would love to see you vote which side you would take.

ARENA FOOTBALL—The news that the Arena Football League was going out of business indicates the second professional football league to fold this year, after the AAFL.  The trouble is that the minor league sports are a very difficult business model and if they cannot get secure financial backing as well as solid TV contracts, they are going struggle.  The XFL is picking up momentum as it heads towards its kickoff and it is getting more coverage in the mainstream media and talk radio circuits.

IHSA REFUSAL TO ALLOW CPS SCHOOLS TO PARTICIPATE IN STATE PLAYOFFS—The lengthy Chicago Public Schools teachers strike had many unintended consequences, not the least of which was the fact that the Illinois High School Association decided that it would not allow the CPS schools to compete in state playoffs for the fall sports.  I am still really not clear what the rationale was for that position, but it seems to me that the kids who have worked so hard in their sports all season long should not be forced to miss the playoffs.  I am not weighing in on the right decision regarding the now settled strike, but punishing the kids seems to be in nobody’s best interest.  Kudos the judge that finally allowed the students to compete.

WORLD SERIES—Truly an amazing series. It is unbelievable that the road team won all 7 games.   The Nationals managed to pull it out and won an amazing number of games with clutch hits.  Brewers fans are probably still lamenting the one game playoff they lost when they appeared to have the game in hand and the Nationals rallied with clutch hits.  To me, one of the most disturbing calls was the interference at first base, but thankfully it was made little difference in the game so it can just be relegated to a footnote.

AXIOS—They hosted an event on Wednesday related to criminal justice reform.  A star-studded lineup came through including governor JB Pritzker.  A lot of interesting issues were addressed and you can read more of the details here.  The criminal justice reform issues continue to lag and the slow pace of change is detrimentally impacting a lot of families.

Chicago Sports Commission—Billed at “Telling Chicago’s Story”, the panel included longtime Chicago media members Dave Revsine (Big Ten Network), Peggy Kusinski, Dave Eanet (Northwestern Sports) and Lou Canellis. The panel was moderated Tarah Cooper Wright who is currently in the role of CEO and Partner of the Rise Strategy Group.  She put some very interesting questions and each panelist got the opportunity to tell some of their favorite stories.

AXELSON—The Axelson Center for Non-Profit Management put together a nice event on Tuesday.  They host periodic events around the Chicago area aimed at improving the work of non-profit organizations.  Take a full read here for more details about Tuesday’s event.

JEFFREY EPSTEIN–The story coming out this week about Jeffrey Epstein’s death potentially not being suicide could be the least surprising story of the year.  With all of the information that he had about a lot of powerful people, someone getting to him was a virtual guarantee. The complaints of the Federal Bureau of Prisons aside, you have to wonder how much help someone had to get to him.

ENTREPRENEURS—One of the things I really enjoy is sitting down with entrepreneurs and non-profits and seeing how I can help them improve their operations or take a new product/service to market. I had a chance to sit down with some very interesting organizations and companies this past week and look forward to sharing more details with you over the coming month.

UPCOMING EVENTS

• AMERICAN ISRAEL CHAMBER OF COMMERCE—LEADERSHIP AWARD DINNER, MONDAY, NOVEMBER 4, 2019.   Here is a link to the full information. I hope you can join us.  If you are interested in coming as my guest, please send me an email ASAP so that we can get you on the list.  This great organization builds relationships between businesses in Israel and the United States.
• PROJECT PLAY, WESTERN NEW YORK—I have been honored to be invited to present to a group of non-profits that are funding by Project Play of Western New York on November 16, 2019.  These organizations do a lot of interesting work in their respective communities and I am excited to share with them a variety of ways to help them build capacity and sustainability in their operations.

HUMOR FOR THE WEEK

MOTIVATION FOR THE WEEK

Do you want a level playing field? Or a free market system?

In the wake of this week’s statement by the NCAA that it intends to explore ways for athletes to be compensated for their name, image and likeness, it appears that we have only two options left for the direction college sports is going to go.

Option 1:             Free Market

Option 2:             Level Playing Field

We are going to explore these two options and I am very interested to hear what you think will ultimately be the choice.  I have my opinions but I will save them for the end of this article.  With California passing its law and other powerhouse states like New York, Florida and Illinois being well on their way to implement similar laws, it was only a matter of time until the NCAA fell in-line with the economic realities and public sentiment about allowing athletes to receive compensation.  Unfortunately, the NCAA’s own statement fell far short of coming up with a viable framework which would let student-athletes really understand how the NCAA would interpret the concepts in its statement.  You can read more details here in terms of the gaping holes left by the NCAA’s position.   Even after you read their statement and understand this holes, you have to take a step away from the anger, hostility and frustration which have long been a part of this discussion.  Catch your breath, open your mind and ask yourself what an ideal world of college sports looks like.  Most of us can agree we are not there right now, but the question is whether there is even a pathway to get there.

In my opinion, there are only two options.  There is no slippery slope, because there is really no place to stop.  Or even try to stop.  This looks more like a cliff.  You are either at the top, or you are at the bottom.

LEVEL PLAYING FIELD

The entire purpose of the NCAA regulating competition in college sports was to preserve some degree of a level playing field.  Recruiting restrictions, scholarship limits, admission requirements and virtually everything else that the NCAA governs were put into place to preserve that level playing field.  Why are the restrictions virtually limitless and the penalties so draconian?  Because Michigan and Ohio State do not trust each other to compete fairly.   Alabama, Auburn and LSU believe that its competitors would do everything in their power to win. While the NCAA is an easy target, the reality is that the rules are implemented by the schools.  The schools are the ones that want help to protect themselves against other “rogue” schools that would implement a win at all costs arms race.  If one elite school in a conference wanted to pull out all of the stops, then other schools would be forced to do the same thing in order to compete.

Many people would argue that the playing field is already unlevel.  If you look at the revenue generated in the Power 5 conferences, there are great disparities between the top schools in the Big Ten, SEC, Big 12, ACC and Pac 12, especially when you compare them to the lower level schools in each conference.  The challenge in front of the college sports community, is how the Name, Image and Likeness (NIL) conversations are going to change college sports. 

IF (and that is a big if), you desire to retain a level (or more level) playing field, you will need to grant the NCAA potentially even more power to regulate the actions of the schools, limit the ways that athletes can earn money and monitor how and when that money is paid to the student-athlete. 

If that concept sounds repugnant to you, then you are probably a proponent of the FREE MARKET below, but just be careful, because you might get what you wished for.

FREE MARKET

The Free Market solution means exactly what it sounds like.  ALL bets are off.  The rules are no longer in existence.  Colleges can recruit athletes in any way that they choose.  Just like colleges can recruit students today.   Nobody monitors whether the students Michigan chooses to admit are following the same requirements as the students Ohio State admits.   Alabama can currently admit its choice of students and provide them as much financial support as it chooses as an institution, without any regard to what Auburn or LSU might offer that same student.  So why is this a bad thing?  It might not be.  Let the institutions make their own admission decisions just as they currently do for non-student-athletes. Goodbye NCAA Clearinghouse.  Goodbye to regulations about core requirements, minimum GPAs, non-qualifiers or any other form of regulation.

QUESTION:         Will this change college sports?

ANSWER: Absolutely. 1000%.   Schools will now be free to recruit, pay, provide financial support or do ANYTHING else that they want to attract talent.  Just as they currently do for regular students.  College sports has changed and it is going to continue to change. The current model is not sustainable and expecting the NCAA to solve the problem is naïve.  Olympic sports have easily survived the transition from the amateurism model to one that allows all forms of compensation.  So what? Don’t we want to identify the best athletes? 

QUESTION:         Will this concentrate the power in some of the elite schools. 

ANSWER:  Yes.  It is highly likely that many of the elite Power 5 schools will get the first choice of talent.  But so what?  If they have the incentive to field a competitive team, the school now has the obligation to make its institution attractive to student-athletes.  Shouldn’t we want the student-athletes to make the decision for a reason that makes sense relative to their future goals?  If some school is willing to pay more for you to come to their university, might that not be a good thing for the student-athlete?  Would some of them consider schools that they would not have considered if they were able to be paid more?

QUESTION:         Doesn’t that cheapen the process?

ANSWER:  No.  It actually makes the school selection process more appropriate to the individual athlete.  A player could decide if a smaller payment from Alabama was more worthwhile relative to his professional football prospects, as opposed to cashing in a lower level Power 5 school or even a non-Power 5 school that would give him a greater compensation package.

QUESTION:         How are student-atheltes supposed to be able to navigate this process?

ANSWER:            Like people in all other aspects of the business world—they would have to hire an attorney and/or agent.  Open up this type of consultation and representation, would mean that the student-athletes would have someone helping them navigate the process and negotiate the best deal possible.

So now that you have read some of the options, tell us what you think?  Do you really feel that there is another way?  Is there any room to compromise and implement some reasonable regulations?  I don’t see it.  I think we are headed towards the free market system, and heading there quickly.  We will not ever see a truly level playing field (or even one approaching what we have now).   The universities will have to use their own judgments, morals, endowments and other factors to decide who they want to admit.  What type of students? What type of athletes?  Spending how much money?  Now the athletic department will have to make some economically rational decisions as to who it brings in.  Currently, a football program will bring in 85 scholarship players.  They can only have 85.  So if they are full, they have to find a way to reduce that number (also known as running off a player).  If someone is not performing, they can be recruited over, meaning the school does not have to continue to honor their scholarship.

Let’s be clear, the free market system is not without problems.  Without a governing body it could be like the Wild West.  Players could be bought each year. Players at one school could be recruited to transfer to another school the following year (even if the contracts provided differently).  An entirely new body of law would develop around this area because none of us have any idea whether courts would enforce a restrictive covenant in the scope of a college athlete who signed with a university for financial aid or other compensation to play football there.  In this free market system, we would almost certainly see the development of a players union.  Someone would need to representing the players and their long-term interest.

Regardless of which side of the issue you are on, one thing is guaranteed.  This next 5 years are going to contain some of the most radical changes college sports have seen.  If you look back at this past week, you will see that this was when the change in the landscape became irreversible.

VOTE NOW:    WHAT DO YOU PREFER? LEVEL PLAYING FIELD?  OR FREE MARKET?

Take the poll here!!

If you didn’t have a chance to read our earlier post: NCAA Position Leaves Gaping Loopholes, here is your chance