This past week I had the opportunity to attend the Aspen Institute’s forum entitled: “The Future of College Sports: The Government’s Role in Athlete’s Pay.”

NCAA President Mark Emmert and a wide variety of stakeholders were present. The challenge for Emmert is the rapidly decreasing strength of the NCAA and the speed at which the NCAA’s credibility is evaporating.

You can read the full coverage that I wrote for the Sports Philanthropy Network here:

NCAA Under Full Attack at Aspen Institute Forum

HUMOROLOGY DONATIONS

SUPPORT BLESSINGS IN A BACKPACK, A NATIONAL NON-PROFIT ORGANIZATION THAT FEEDS SCHOOL CHILDREN IN THE UNITED STATES.

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

Yesterday the NCAA released a statement proclaiming that it was starting the process to allow student-athletes to be compensated for their name, image and likeness.

Sadly, though it is at least a step in the right direction, it leaves loopholes that are big enough to drive a football equipment truck through.

While it is nice to see the NCAA finally taking any type of action, its own statement raises many of the exact issues that I predicted as trouble spots in my October 4, 2019 posting: California’s Name, Image, Likeness Law Won’t Solve All Problems with NCAA.

Since that time, New York, Florida and Illinois have also proposed legislation that addresses these areas.

• New York
• Florida
• Illinois

A peek at the headlines that littered Twitter and the sports journalism landscape yesterday included the following headlines from high profile and reputable sources:

• CNBC: NCAA to permit athletes to profit from their name, image and likeness
• USA TODAY: NCAA Board of Governors opens door to athletes benefiting from name, image and likeness
• CNN: NCAA says athletes may profit from name, image and likeness
• ESPN: NCAA clears way for athletes to profit from names, images and likenesses
• CBS: Inside the NCAA’s move to allow athletes to profit from name, image and likeness rights

None of those headlines seem to accurate capture what the NCAA actually said in its statement. The NCAA did not set any clear timeline nor clear guidelines nor an indication that it was going to do anything other than “examine” the process and find a way to make some change. In my opinion, when you look at the words: “in a manner consistent with the collegiate model” you start to see the problem?

You have visions of enforcement nightmares and the bureaucratic inefficiencies of the NCAA coming to mind. Most people in sports (and elsewhere) agree that the collegiate sports model is broken. So now you have the leading organization telling us that the Name, Image and Likeness issues need to be handled in a manner consistent with a broken model? Obviously, that makes little sense.

The NCAA is hardly perceived as a bastion of fairness when you see how much trouble it has enforcing relatively simple regulations like transfer waivers. Some players like Ohio State’s Justin Fields are granted immediate eligibility. Others like Wisconsin basketball player Micah Potter are now told to sit out what amounts to three semesters of basketball despite having the support of the school he was leaving in his the petition for immediate eligibility (which isn’t even really immediate eligibility because it is already after having sat out a full season).

Fortunately for us (and unfortunately for them), the NCAA even lays out the manner in which it intends to treat this initiative. You can see in its own language, how difficult it is going to be to enforce these guidelines:

Take a look at all of the wiggle room that is identify in each of these guiding principles

NCAA GUIDING PRINCIPLES ON NAME, IMAGE, LIKENESS COMPENSATION

►Assuring student-athletes are treated similarly to non-athlete students unless a compelling reason exists to differentiate.

Wiggle room: “treated similarly” and “compelling reasons” Who is going to make these evaluations?

►Maintaining the priorities of education and the collegiate experience to provide opportunities for student-athlete success. 

Wiggle room: “priorities of education”–Whose priorities? “opportunities for success”–What type of success? Defined by who?

►Ensuring rules are transparent, focused and enforceable and facilitate fair and balanced competition.

Wiggle room: “transparent, focused and enforceable” and also “fair and balanced” These are virtually impossible to enforce fairly.

►Making clear the distinction between collegiate and professional opportunities. 

Wiggle room: What exactly is that distinction in the current world?

►Making clear that compensation for athletics performance or participation is impermissible.

Wiggle room: Of course you are getting paid for performance or participation. You only have value if you are on the field and being seen by the consumer! So the better you play and the more you play the higher your market value.

►Reaffirming that student-athletes are students first and not employees of the university.

Wiggle room: This is a pure CYA (cover your ass) move by the NCAA and the universities. They don’t want student-athletes positioned as employees because that causes all kinds of tax issues, liability issues and potential health-care issues.

► Enhance principles of diversity, inclusion and gender equity. 

Wiggle room: How is any of the name, image and likeness going to address these larger issues? Nice as a theory, not practical as a way to determine what is permissible.

► Protect the recruiting environment and prohibit inducements to select, remain at, or transfer to a specific institution.

Wiggle room: Recruiting environment already a problem and played on an uneven landscape. This will only make it worse. Virtually no way to distinguish what is a payment to select, remain at or transfer to a particular institution compared to what is a payment for “name, image and likeness” while you are at that institution (i.e. an athlete has no value to a business in Columbus, Ohio unless they are playing in Columbus and not in Tuscaloosa).

Can you honestly imagine the NCAA finding a reasonable way to enforce these issues? I could literally come up with 100 problems with these guidelines but let me just share a few of them to highlight the difficulties the athletes, schools, conferences, NCAA and businesses are going to have with this process:

PROBLEM #1

Problem #1: Do you trust the NCAA to handle the intricacies and nuances of regulating this process?

Answer: No chance. The NCAA has not proven itself to be transparent and explain its rulings. I believe that the hidden nature of the NCAA proceedings has been an enormous detriment to the organization and more importantly to the goals of the organization. It seems to be against its own interests to keep the rationale secret because that uncertainty undermines the process. If you really look at the multitude of issues that will arise under any potential legislation, you are now asking multiple parties to be part of the process, further complicating an already complex set of issues. The student-athlete, his/her university, the conference, the NCAA, the state laws and the business desiring to contract with the athlete all have their own interests. Toss in sports agents, attorneys, marketing agents, financial advisors and many other and you will quickly see how implausible it will be for the NCAA to properly govern these issues.

You don’t believe me? How about NCAA President Mark Emmert? The USA Today article above quote him as saying that threading those general principles into meaningful rules changes for for Division I schools will be challenging.

PROBLEM #2

Problem #2: When are the players going to get paid?

Answer: There is no guidance on this issue. Some people suggest that the NCAA’s solution is going to be that the funds go into some form of trust until the player either graduates or leaves school. That somewhat defeats the purpose of allowing an athlete to have a stream of income that they might need for their survival or to help support their family members (or even–GASP–for them to be able to enjoy the fruits of their own labor). Paying them immediately does not necessarily remove the problems because now you have teammates competing together, only some of whom are getting paid (see below). What happens when the star QB, WR, RB are getting some lucrative endorsement deals, but their offensive linemen are not? Does this internal jealously create rifts on the team? Are the stars allowed to “share” their compensation with teammates? In the NFL, QBs and other stars are more highly paid than their teammates. But the teammates are still pulling in mid-6-figure incomes (or more). Additionally, there is no restriction on the QB buying dinners, vacations, watches or other luxuries for the guys who help them succeed. Leaving this in the NCAA’s hands to monitor this process is just going to create a mess.

PROBLEM #3

Problem #3: Who is representing the players?

Answer: Historically, the NCAA has prohibited (with a few exceptions), college athletes from having proper representation. The NCAA’s perspective has been that the representation of the athletes makes them a professional and therefore, no longer eligible for college sports.

With the array of regulations and drama that is going to accompany a change of this magnitude, it only seems fair for us to allow the student-athletes to retain an agent or an attorney to help understand and manage this process. If we are moving towards a free-market solution, then why not go all of the way to the free market. Asking student-athletes to navigate these murky waters alone is entirely unreasonable, especially given that everyone else in the process has extensive representation.

PROBLEM #4

Problem #4: How many players really merit compensation on the open market?

Answer: It depends on how you define “merit”. If you truly use the concept of “name, image and likeness” then only a few college athletes would reap benefits. Take out QBs, RBs, WRs and a few high profile defenders, and the estimate is that fewer than 10 players on a Power 5 football team would have “true marketability.” Others that are paid compensation would be getting it in order to attract them (or retain them) at a university. These payments may be disguised as Name, Image and Likeness payments, but they would violate the NCAA’s own guideline language.

PROBLEM #5

Problem #5: What happens when some players on a team get paid and others do not?

Answer: What happens when the star QB, WR, RB are getting some lucrative endorsement deals, but their offensive linemen are not? Does this internal jealously create rifts on the team? Are the stars allowed to “share” their compensation with teammates? In the NFL, QBs and other stars are more highly paid than their teammates. But the teammates are still pulling in mid-6-figure incomes (or more). Additionally, there is no restriction on the QB buying dinners, vacations, watches or other luxuries for the guys who help them succeed. Leaving this in the NCAA’s hands to monitor this process is just going to create a mess.

PROBLEM #6

Problem #6: This process will not help protect the athletes or the universities

Answer: Correct. Athletes can still be taken advantage of. Unscrupulous boosters and agents will still have ways to get at the athletes. Unrepresented athletes will be susceptible to entering into contracts which are not in their short or long term interest.

From the university side, the competitive landscape will become more ruthless. Instead of negative recruiting or recruiting players previously committed to other schools, the universities will have to contend with a whole array of compliaance issues, booster issues and competitive issues. The recruiting process will start looking like a bidding war, only it will be diguised to fit within whatever parameters the NCAA establishes.

The bottom line, is that I could keep going and going and going. There are more problems in this NCAA statement than what possibly is solved. We are going to be in for huge changes ahead in the college sports system. Many people will not like them because there is really no middle ground.

Tune in tomorrow to read our next article when we look at the reality of the landscape in college sports. Truly, there are only two options: 1) Try to maintain a level playing field; 2) Completely open up college sports to the free market.

Neither solution is perfect and each has its own pitfalls. Check back and read our analysis tomorrow and then tell us which side you choose. Remember, there is no middle ground and you are forced to choose one side of the other! It will be interesting to see how you all vote!

• California Name Image and Likeness Law.            While almost all of us agree that college athletes are exploited in many respects. However, you have to question whether the “solution” is the proposed Name, Image and Likeness law that was passed in California and is now being proposed in many other states.  You can see a more detailed look that I wrote in this article which takes a peek at some of the difficulties which would be involved with enforcing this law. Well intentioned–absolutely. But it is a going to be an enormous change in college sports, and not in the way that people are expecting!

• Targeting, Helmet-to-helmet and Vontez Burfict.              Targeting is bad.  Taking cheap shots at players heads is bad.  Failing to control your aggression and causing potentially life-changing injuries is something both the NCAA and NFL need to prevent.  But the trouble comes about when they penalize a result or a repeat offender way beyond the actual offense.   You will be hard pressed to find someone to defend Vontez Burfict’s typical behavior and on-field aggression.  He has served multiple suspensions and most of them are well deserved. Suspending him for the remainder of the year for a hit that occurred within the scope of the play seems excessive even given the escaxlating punishments. But his reputation has a major impact here.  Here is a link to Burfict’s hit.   For comparison, take a look at this hit on Green Bay Packer Running Back Jamaal Williams by Eagles’ Derek Barnett.  The hit on Williams was FAR later in the play and completely unnecessary to bring Williams down.  It is hard to understand how the NFL can look at that play and not believe he should have been tossed from the game and suspended. To my eyes, the hit on Williams was much more of the hit you are trying to eliminate, especially since it is not really in the scope of the play.

• Inadvertent Side-effect of NCAA Redshirting Rule.           People rarely feel that the NCAA has an athlete’s best interests in mind. Yet, when the 4 game participation rule was passed last year for football, it seemed like a good way to balance the interests of the players and the universities by allowing athletes to get a bit of experience without losing an entire year of eligibility.  Unfortunately, from what you are seeing this year, the inadvertent side effects appear to be reaching epidemic proportions.  In the past few weeks, we have had players at Houston and players at Rutgers decide to sit out starting in the middle of the season.  Players are deciding after a “poor” start to the season, a mid-season coaching change or a potential coaching change, that they should “stop” playing until the following year so as not to “waste” a year of eligibility.  This leaves the team and interim coaches in a really difficult situation where players they were relying on now have the ability to decide not to be part of the team.  I am sure that this problem will only grow and ultimately coaches and universities will have to figure out a reasonable (and legal) way to prevent this from happening in the future.  UPDATE OCTOBER 8, 2019: NOW EVEN SPORTS ILLUSTRATED IS COVERING THIS SAME ISSUE!!

HUMOR FOR THE WEEK

MOTIVATION FOR THE WEEK

While almost all of us agree that there are some exploitations in the way college athletes are compensated, you have to wonder whether the “solution” is the proposed Name, Image and Likeness  (NIL) law that was passed in California and is now being proposed in many other states. 

The concept of the law itself is superficially appealing because it appears to create an avenue for athletes to get compensated for their Name, Image and Likeness, something that has been prohibited up to this point. The challenge in this situation is going to be how the NCAA attempts to regulate the manner in which the athletes can be compensated.  Up to this point, the NCAA has struggled to consistently apply its regulations.  While the attempts by states to influence the NCAA to change are noble, let’s take a look at whether they will really achieve the articulated goals.

Reading through the California law, the proposed New York law and the proposed Florida law, none of them account for the very real challenges and potential for abuse.  While the pressure from the states will ultimately force the NCAA’s hand and require it to allow NIL compensation, what the state laws do not address is what “other” ways the NCAA can regulate compensation for athletes and influence athlete eligibility.

The goal of most fans, most college athletes, as well as the critics of the NCAA, is to find a mechanism to allow the athletes to be compensated during their athletic careers. Some people want to call their scholarships compensation, which in and of itself would cause problems with workers compensation, insurance and much more.  While people often say that the scholarship is “not enough”, at many schools, the total cost of attendance is in the range of $40,000 to $50,000.  In addition, nobody can deny that the athletes (for all sports), get an array of services that is far beyond what the typical student would receive (food, supplements, tutoring, academic support, athletic training, medical treatments, strength and conditioning, use of facilities and more).   At the recent Chicago Sports Summit, DePaul University Athletic Director Jean Lenti Ponsetto estimated the total allocated cost for supporting an athlete at $250,000 to $300,000.  Included in this total was an allocation of all of the support services for the athletes, other than the out of proportion salaries for head coaches for football and men’s basketball.  So essentially, her number includes salaries for assistant coaches, athletic trainers, strength and conditioning coaches, academic support services, nutrition, sports information directors, team managers and more. 

When we hear athletes complain that they are not getting “enough”, one question that is frequently raised is what type of compensation these athletes would get if they walked out of high school and tried to get a “normal job.”   In today’s world, I think we would all be hard pressed to find a situation where a high school grad would be able to get a job paying $50,000 per year absent some special skills.

So while we applaud the state’s for pushing this issue and forcing the NCAA’s hand, we have to remember that there is going to be a lot of work to handle this enormous change in college sports, one which neither the NCAA nor the states are equipped to handle.

THE PROBLEMS

Some of the problems with these laws include the following:

• No restriction on how the athletes can be paid
• No restriction on when they can be paid (i.e. before enrolling or playing in actual games)
• No requirement of reasonableness or market rate (see below)

WHERE THE ABUSE WILL COME INTO PLAY

The state laws simple make it illegal to invalidate the eligibility for players who are compensated for their name, image and likeness.  However, without a mechanism to handle the anticipated abuses, we are simply going to see some “legitimate” compensation to high profile athletes and a lot of underground payments to athletes who truly have no marketability.

For example, look at the NFL.  Very few players have actual endorsement deals.  VERY FEW.  On a national level, the number is probably lower than 25.  On a local level on each NFL team, with a few exceptions, you might have a dozen players that are actually being paid for endorsements and perhaps another dozen that are getting something in trade (restaurants, car dealerships, bars, etc.). 

Under the proposed state regulations, any “payment” to an athlete can be disguised as a NIL payment.  Hey, you are a good looking kid, if you are here in Columbus playing for Ohio State, we could put you on our car dealership calendar or give you the use of a vehicle.

How would that be regulated?  Should it be regulated at all or should we let the free market forces take over entirely in this space?  The challenge is how we are going to make this an allegedly level playing field.  If you were to take “true market value” of college athletes, there would be less than a dozen players on any college team that merit consideration for NIL compensation.  It is easy for us to earmark payments to an athlete when they are a Heisman contender or star player.  We can take a percentage of their jersey sales or we can figure out the media value of them being used on a billboard or in a promotional advertising campaign.  But going into to college, how many athletes have that power?  I would hate to see a restriction on when a player can get paid because they will create too much subjectivity. 

My skeptical side says cheating will still go on.  Underground payments will still occur.  They will just be disguised differently.

It will be interesting to watch the NCAA’s reaction.  With other states jumping on board with California, the NCAA is definitely running out of time and I would anticipate seeing some response from them before the end of 2019.