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A regional branch of the National Labor Relations Board ruled Wednesday that scholarship players on Northwestern University’s football team qualify as employees and can unionize. If the ruling, which the university plans to appeal, is upheld, it has the potential to radically change the dynamics of college sports. We consider the implications of the case moving forward and what bearing existing legal framework within the field – like Title IX – will have on the case.
- Ellen Zavian Adjunct Assistant Professor, The George Washington University School of Business; lawyer; sports agent
MS. JENNIFER GOLBECKFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. I'm Jen Golbeck from the University of Maryland sitting in for Kojo. In the midst of March madness, questions about student-athlete status continue to swirl. College sports have long been big money makers for schools and the NCAA, and a growing number of players want greater protection, if not compensation, for their participation.
MS. JENNIFER GOLBECKYesterday, Northwestern University football players passed the first legal hurdle in their bid to form a union, one that would grant them protections extended to employees. Here to shed light on what this ruling means and where it goes next is Ellen Zavian. She's a professor at George Washington University School of Business, and she's also a lawyer and sports agent. Good to have you here with us, Ellen.
MS. ELLEN ZAVIANThank you.
GOLBECKSo let's start with the first core question. Are football players or other athletes paid by the university, are they employees of the university?
ZAVIANWell, according to the NLRB at the district level, they are employees. If you walk like a duck, you talk like a duck, you are a duck.
GOLBECKThat's right. The ruling handed down yesterday doesn't apply to all Northwestern players or even all universities. So who does it apply to, and what are the implications?
ZAVIANWell, you have to start somewhere. So the athletes felt that this was the right timing in the economic sphere, the NLRB Board, to really put forth this effort. But I want to explain that this is not the first time they've tried this. This has been going on for about 20 years, trying to organize the student athletes. But what you realize is, every four years, those athletes then move on to their life.
ZAVIANSo really this is the first time they've had the opportunity to stick with the core group and develop a relationship with the steel workers to engage this process.
GOLBECKAnd so who, at Northwestern, does this apply to? And what universities does this decision apply to?
ZAVIANSo the players that filed are the parties to the action. The interest...
GOLBECKJust the football players.
ZAVIANJust the football players at a private institution. And it applies specifically to those parties involved. So the NCAA is actually not a party to the suit.
GOLBECKOkay. Since this ruling applies only to scholarship players and, as we said, so far just to football players at Northwestern, is there any concern that, if the NLRB's ruling stands, it sets up a scenario of inequality among players on the same team?
ZAVIANWell, the ruling went into -- you alluded to scholarship versus non-scholarship would be the comparison -- and so a scholarship athlete was discussed in the opinion versus a non-scholarship. And the non-scholarship athletes were actually dismissed and said, we are not going to rule that they are employees.
GOLBECKSince they're not being paid.
ZAVIANThat's correct. And so they're really focused on this core component of those receiving an economic benefit for attending the university, and then the university receiving an economic benefit for their performance.
GOLBECKYou can also join the conversation. Do you think college athletes should be allowed to unionize? Tell us why or why not. And what kind of protections would you like to see extended to young athletes at the college level? You can join us by calling 1-800-433-8850. Or email us at firstname.lastname@example.org. Ellen, you note that it's important to consider this decision in the context of both history and where we are today. In terms of prospects for these student athletes, why this decision and why now?
ZAVIANWell I think it's a wonderful economic period, if you look at players not getting jobs, as students aren't getting jobs, when they're leaving their colleges. You're looking at unions being told their collective bargaining agreement has to be redone, as in the Chicago incident. So the AFL-CIO has been moving towards organizing not just unions but helping trade associations. I recently organized the break dancers that compete into a trade association.
ZAVIANSo there's a movement across the country that are looking at independent contractors, because employers are firing employees and rehiring them as independent contractors without having to pay workers' comp, medical benefits and so forth. So there's an environment that this has peaked under. This has not just, unto itself, got here. And if you look at what they're asking for in the suit, they're really not asking for, "Hey, I want to be paid to play." They want additional money to be able to survive under their scholarship rules that the NCAA has put forth.
ZAVIANThey want to be able to cover sports-related injuries. They want a trust fund for medical injuries that will go beyond their college days. And the brain-injury issue that's going on and is a hot topic obviously plays a role in that. So this nemis (sp?) -- that, you know, we are looking for to be paid, is not even in the lawsuit.
GOLBECKAnd it might be worth filling in people on what the rights are and the contract are of these students. We actually covered this issue last time I was filling in for Kojo on the show, and we had some people call in and we had a lot of people here explaining that these athletes don't have really a right to take jobs outside of their -- outside of what they're playing, certainly if it's related to the sport -- that they may have their injuries covered while they're playing for the school, but if those injuries extend past their time at the university, they're not covered.
GOLBECKSo maybe you could just give us a background of what are the rights and restrictions on these students?
ZAVIANSo the NCAA started out with a mission. The mission was student athlete -- and I emphasize student coming before athlete -- and that mission was to create a well-rounded student athlete so, as we know, if you have sports in your background, you're perhaps more likely to have confidence and growth, and communicate at a team level, and all those attributes that come with sports. So that was the initial mission statement of the NCAA, which is a nonprofit, let's add. So if you look at that component, how have they grown into a business? They're paying the coaches extraordinary amounts.
ZAVIANThey're paying the athletic directors not just extraordinary amounts, but they get bonuses based on how well the athletic department does or performs at bowl games and so forth. And the only individual that's not getting a piece of the pie -- not the whole pie -- are the performers.
ZAVIANAnd so what are they asking for? Well, they can't -- they can work, under the NCAA rules, but it's very restricted. And when you're already working 50 to 60 hours a week during the season and 40 to 50 hours a week during the off-season, what employer is going to hire you for that three hours that you have to do construction work?
ZAVIANOkay? And there's a lot of rules and regulations that that person has to jump through in order for that athlete to be compensated.
GOLBECKAnd they can't receive compensation, say, from Nike or other endorsements, because that takes them out of the NCAA rules, is that right?
ZAVIANThat's right. So this level of defining amateur has been a struggle from the U.S. Olympic Committee, to the national governing bodies of each sport, and now to the collegiate level. What is amateur? In some cases the definition is, if you receive Nike footwear, you are no longer an amateur. If you receive clothing, a ride to the hotel from an agent, all those things have a value and therefore you're no longer eligible. So, really, you have to look at, is there a need for a definition of amateur across the board in the athletic community?
GOLBECKWe have a bunch of people calling in. Let's start with a couple of calls. We'll start with Brian in Alexandria, Va. Brian, you're on the air. Go ahead.
BRIANGreat. Thank you for taking my call. Interesting topic. You know, I've always thought that the whole college sports student athlete system was flawed. And, to me, the biggest problem has been one of transparency and that there's really no accounting for what the exact value is of the -- of what the student is getting in the form of their education or the classes and what the university provides. And we never see, really, an exact accounting of the money that is earned by the university. You always hear about the millions and millions that they earn, but not a specific accounting.
BRIANI've heard it discussed before as, could there be some sort of a system where the students, the athletes get some sort of a voucher system where they have to pay for the tuition like every other student, but then they get some sort of compensation from the university that then they can apply towards their tuition. So we take away this, what they're getting and what they're paid kind of gray area, because no one really knows. I mean, when I go to college, I knew what the -- what my tuition costs, room-and-board costs -- I mean there was a way to define what it actually costs.
BRIANBut you never hear what that is with the students and then, of course, they're not with the athletes. And you don't hear what compensation they're getting, like you said, for their labor, for the efforts. The people that are actually performing get no piece of that pie, other than what they get through their -- this education that they're getting out of it. But that's this nebulous -- we never quite know what the value of that really comes down to.
GOLBECKThanks for your call, Brian. And we also had Gary on the line, who dropped off, who had a question about how much tuition was. I had heard a report yesterday, I think, on NPR about these students, that said it was around $65,000 a year. But Brian raises a lot of bigger issues, so maybe you can comment on those more broadly.
ZAVIANSo, like I said before, the IRS is looking at nonprofits and saying, "Look, NFL, are you still a nonprofit? You may bring in billions." And there's this thing called unrelated business income tax. The NCAA gets away with not paying taxes on network and television deals and bowl money and ticket sales and merchandise, because they're quote, unquote "a nonprofit". So I think the IRS is going to get pulled into this as well. But when you look at the Department of Education's database, that's where the universities insert what they're spending on particular areas.
ZAVIANAnd according to the opinion, the total revenues were $235 million from '03 to 2012, and the total expenses were $159 million. So there's obviously a difference there.
ZAVIANAnd how you value one extra person in a seat to a university, is always -- has been an issue, even for myself at a university teaching at GW.
GOLBECKRight. Let's take a call from Doug, who has a slightly different perspective. Doug in Fairfax, you're on the air. Go ahead.
DOUGHi, guys. So being a former college athlete, one of the things that I enjoyed about it was the actual participating in the sport. And I played a non -- I was a non-scholarship player. And what I see happening though is, as business encroaches upon the sport, that we've lost sight of what the sport is all about and the enjoyment of it. Now, these kids, they go to school. They're getting an education. They're getting it paid for on some level, and I haven't heard a lot of talk about the benefit. And that benefit is directly related to how much they study and the job that they get when they actually finish their education.
GOLBECKOkay, Doug. Thanks for your call.
ZAVIANSo I would just comment that the athletes are spending an enormous amount of time, as I said 50 to 60 hours according to the opinion. And they're also -- nothing is mandatory in some respects, but if you don't show up, it is mandatory.
ZAVIANThey're also -- Brad Shearer has spoken about the issue of social media. And they're mandating that these athletes give their passwords and who they befriend, and they have to befriend the coach. So it's starting to look like an employer is not just looking at what's the best experience on the field, but I'm going to take over your social media, I'm going to ask for your passwords, I'm going to not pay you workers' comp if you get injured. And, oh, by the way, if you're injured and you leave us, you'll have to pay for those expenses. So when you look at it from a total perspective, it really yells and screams, I guess I am an employee.
GOLBECKSo there's a -- there's an argument on the amateurism side, but really also a counterargument on the fairness side, it sounds like you're saying.
ZAVIANWell, if the definition of amateur is allowed to change, according to the NCAA, then that changing definition would be the counterargument to your statement that the amateur status -- well, what does that mean? I'm trying to figure out what that means.
GOLBECKSure. So let's wrap up with one last question, as we're running out of time. We talked about how big this business is. Do you think the ultimate end result here will be a change of the business model for the teams and for the universities?
ZAVIANI think my suggestion would be that you sit down and you start discussing increased scholarship monies, better medical coverage and a trust fund for when the athletes leave and you'll never have to get to the salary component at all.
GOLBECKEllen Zavian is a professor at George Washington University's School of Business. She's also a lawyer and a sports agent. Ellen, thanks very much for joining us to talk about this.
GOLBECKWe're going to take a quick break and continue our conversation. Stay tuned.
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