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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

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.