SAN DIEGO — Apparently a college scholarship worth, what, $250,000 over four years isn’t enough.
Or housing and cost of attendance stipends worth an additional $10,000 per year. Or round-the-clock food service on campus and trips to steakhouses on the road. Or free, unlimited academic tutoring. Or health insurance and front-of-the-line access to emergency root canals on Sundays. Or closets full of sneakers and gear. Or the plush locker rooms with giant TVs and charter flights with freshly baked cookies. Or the private fitness center with a personal trainer. Or the priority registration so you get your first choice of classes. Or graduating without student debt.
And let’s not forget the friendly, ahem, admissions policy that got you in.
Student-athletes — or should we call them athlete-students? — want more, more, more, and the NCAA moved closer to giving it to them Wednesday, when its Board of Governors announced a groundbreaking proposal allowing them to monetize their name, image and likeness (NIL). The language will be finalized in the fall, go before the NCAA Convention for rubber stamping in January and implemented for the 2021-22 academic year.
I guess we shouldn’t begrudge them. This is America, cradle of capitalism, land of the free (and the free market). Get what you can get. Look out for No. 1.
It would all make perfect sense if college sports operated that way, under the same economic principles that other businesses do.
But they don’t. And that’s the problem here. That’s why they’re akin to an akimbo skier headed down the slope, skis pointed in different directions, gaining speed, faster and faster and faster, legs moving farther and farther and farther apart.
Eventually you’re gonna crash.
The great flaw in the NCAA model is less that is operating under an antiquated notion of amateurism than serving different masters. One ski is capitalism, the other socialism.
Coaching salaries operate in a market-based economy, set by what people are willing to pay. Infrastructure projects, largely built to attract better recruits, are not regulated. Next month, the NCAA is expected to alter transfer regulations so football and men’s basketball players no longer must sit out one year, essentially rendering them free agents.
Now athletes can earn unlimited sums from outside endorsements and other work.
All of it reasonable, all of it logical, until you stick a budget in front of a Division I athletic director and tell him or her to balance it.
Any CFO from a normal American company would take one look at it, see barrels of red ink from a list of programs, shrug and say, “Why not just cut these?”
And the AD would reply: “Because we can’t.”
CFO: “Why not?”
AD: “Because the NCAA and federal government won’t let us.”
NCAA bylaw 20.9.9 sets minimums of sports to retain Division I status. For those playing in the Football Bowl Championship, the highest level, it is six men’s, eight women’s and 16 total sports — 14 of which lose money. And Title IX mandates gender equity across any institution that receives federal funding, and all universities do in the form of lucrative research grants.
So they can’t operate like pro sports franchises, which aren’t compelled to field women’s rowing and lacrosse teams. They’re stuck. You can’t lower men’s sports below the NCAA minimum, and you can’t eliminate women’s sports and stay compliant with Title IX. (Imagine telling Apple it has to continually develop and manufacture 14 products that nobody buys.)
It makes for a fragile economic ecosystem, a bunch of folks giving off the impression that they’re loaded when in reality they’re surviving paycheck to paycheck. You can look at statistics showing only two dozen athletic departments of the 350-odd in Div. I actually turn a profit. Or you can look at the current financial straits spawned by a single month of lost income from the coronavirus shutdown of the NCAA basketball tournament.
Louisville, which has the richest apparel contract in the ACC, recently laid off 33 athletic department employees, won’t fill seven open positions, placed another 45 staffers on 60-day furloughs and had all coaches take a 10% pay cut.
Now introduce an NIL proposal prompted not by the NCAA’s conscience but by legislation in California and other states granting athletes the ability to appear in commercials for a local car dealership, or get paid by a company to sign autographs, or hawk soft drinks.
The system is ripe for abuse, using outside income as a recruiting enticement or a disguise to pay college athletes. But don’t worry, NCAA officials promise they’ll ensure the payments represent fair market value and have no ties to the university because, you know, they’ve had so much success preventing under-the-table money from coaches, boosters, shoe companies and agents.
“Guardrails” was their word.
Pylons is more like it.
The match in the gas tank is the transfer rule. Without the deterrence of sitting out a season, players can, and will, leave for another school with increased frequency not for its business department but for business. The NCAA plan precludes direct involvement from athletic departments or (pause here to laugh) boosters in NIL contracts, but players can hire agents. The agents, who understand the relationship between competition and negotiation, will simply broker the deals. The free market will take care of the rest.
Good luck closing Pandora ’s Box.
The financial impact of NIL on athletic budgets presumably is nil, because the schools aren’t paying anything. But there’s not an infinite supply of money out there, and every dollar spent by a local car dealer on a player is likely one less donated to the university. And how long before Adidas figures out it’s cheaper (and just as effective) to pay Louisville’s quarterback and point guard to wear its sneakers instead of giving the entire athletic department $160 million over 10 years?
The result: unintended consequences.
The first thing athletic directors do when revenues shrink is cut budgets of sports that don’t make money, not wanting to jeopardize the competitive integrity of those that do (football and men’s basketball). The coronavirus shortfalls have already accelerated that process: fewer games, smaller rosters, no conference tournaments, van trips in the nonconference, last year’s uniforms.
The next step: cut the entire sport. Twenty-seven of Div. I’s 32 conferences petitioned the NCAA for a blanket waiver of several rules, most notably 20.9.9. The convenient excuse was COVID-19. The real reason, several athletic directors confided, was an opportunity to prepare for the anticipated lost revenue from NIL legislation that will last long after the virus has passed.
That prompted a desperate letter to the NCAA from coaches associations representing 17 non-revenue sports, realizing their fate if a blanket waiver is granted. The NCAA backed down, allowing relief from the sport minimums on a case-by-case basis only, leaving the door ajar instead of wide open.
It might not be long before they’re knocking on it again or, heretical as it might sound, testing the boundaries of Title IX.
“That will change,” one AD told me. “I don’t see any other way around it … Any athletic director who says they’re not considering cutting sports is lying.”
Because eventually you’re gonna crash.
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