Tuesday, October 25, 2011

Is the NCAA ready to show “some but not all” college athlete the money?

At long last, it appears the largest labor pool of unpaid professionals, college athletes, are about to be “paid” for the services they offer NCAA institutions. College athletes receive full scholarships (tuition, room and board) which can cost as much as $50,000 per year. While a majority of college athletes do not generate a significant return on the investment schools make in them, those who participate in revenue generating sports (football and men’s basketball) have long believed they deserve a piece of the NCAA money pie.

NCAA President Mark Emmert told members of the Knight Commission on Intercollegiate Athletics that the NCAA was ready to look at offering college athletes additional financial support that goes beyond what the current system offers.

"We are going to create a model that would allow -- probably ... up to $2,000 in addition to" tuition, fees, room and board, books and supplies.

“I believe the presidents are committed to creating rapid change to benefit the student-athletes on their campuses. We need to take serious action now to improve the student-athlete experience and make sure our conduct aligns with our values,” Emmert said. “All of these changes will happen in short order and will have a positive impact on the enterprise.”

According to the NCAA the changes go well beyond increases financial assistance and include:

•Increased emphasis on academic performance, including a minimum academic standard to qualify for postseason competition.
•More rigorous initial-eligibility standards, including tougher core-course requirements coming out of high school.
•Increased standards for two-year college transfers.
•Increased assistance to student-athletes, including up to an additional $2,000 miscellaneous-expense allowance toward incidental educational costs above tuition and fees, room and board, and books.
•Allowing institutions to award multi-year grants in aid.

The NCAA is expected to review Emmert’s series of proposals as early as Thursday.

In what was a well organized media event, that included more than 300 NCAA athletes from Arizona, Georgia Tech, Kentucky, Purdue and UCLA, a petition was released asking the NCAA to "realize its mission to educate and protect us with integrity."

According to ESPN the “document asked the NCAA and college presidents to set aside an unspecified amount of money from what it estimates is $775 million in recently acquired TV revenues in an "educational lock box" for football and men's basketball players.”

In a written statement, NCAA spokesman Bob Williams said the NCAA "redirects nearly all of its revenue to support student-athletes."

"Of its approximately $775 million in annual revenues, the NCAA invests 96 percent, or 96 cents of every dollar, in student-athletes through direct distributions to individual campuses and conferences; the funding and administration of national championships; and other direct support, such as the Student Assistance and Academic Enhancement funds in Division I. "

"I really want to voice my opinions," said Georgia Tech defensive end Denzel McCoy, a redshirt freshman told ESPN. "The things we go through, the hours we put in, what our bodies go through, we deserve some sort of (results). College football is a billion dollar industry."

Most of the revenue television generated from college football including the multi-billion dollar BCS contract is divided up by the conferences when they sell their rights. The NCAA's $10.8 billion, 14-year deal for the men's NCAA basketball tournament with CBS/Turner Sports iscontrolled by the NCAA.

The National College Players’ Association, an advocacy group that focuses on issues relating to how college athletes are treated by the NCAA, released the results of the petition to the media.

“We the undersigned student-athletes are hereby calling on the NCAA and college presidents to use a portion of the $775 million in new TV revenues to increase graduation rates, decrease NCAA violations, and provide basic protections. This would include:

- Dividing a portion of new TV revenues evenly among FBS football players and Division I men’s basketball players. This money would go into an educational lockbox (a trust fund) that we can receive if we abide by NCAA rules and graduate, or to pursue our undergraduate degree when our eligibility expires. This would increase our graduation rates and decrease violations.

- Raising our scholarships equal to the cost of attendance so our schools can fully support our education – an average increase of approximately $3200/year per full scholarship athlete.

- Allowing our schools the option to prioritize our education by providing multi-year scholarships.

- Preventing permanently injured players from losing their scholarships.

- Ensuring we are not stuck with sports-related medical expenses.

These are some of many solutions that can finally allow the NCAA to realize its mission to educate and protect us with integrity. Any Title IX requirements related to the above reforms can and should also be funded with new TV revenues. We endorse the NCPA’s call for comprehensive reform to occur in October.”

Purdue quarterback Rob Henry is recovering from knee surgery to repair a torn ACL suffered just before the start of this football season. He stated, “I have been very fortunate with my situation and Purdue paying for everything. I know there are cases in which players at other schools don’t have the same fortune, and this is morally wrong.” Henry gathered his teammates’ signatures on the petition and said they were surprised to learn about how much new money was being generated. He said, “Everyone on my team was astonished. They were very supportive of the petition, and have been very inquisitive about reform since they signed the petition. It’s amazing how little players knew about the financial situation of the NCAA before our scholarship shortfall and TV revenue studies.”

UCLA football player Jeff Locke, who circulated the petition among his teammates and the basketball team, is concerned that the NCAA might delay important reforms. He stated, "As almost $800 million in new TV revenue streams into college football next year alone, it is important that we address these issues surrounding college athletics immediately. If the NCAA pushes back these issues, the schools will find other ways to spend this money, whether it is put into new facilities or to increase coaches’ salaries, and the players will not be able to receive the basic protections they need from the billions they help generate."

Arizona wide receiver David Roberts stated, "I felt that it was important that the student-athletes who make up the core of NCAA have their voices heard, which is why I brought the petition to the attention of my teammates. I, along with those who signed the petition, hope that more will be done to benefit future student-athletes that make many sacrifices to be successful on and off the field; but their finances should not be a part of those sacrifices. My teammates and I hope to welcome better protections that will provide a proper experience for student-athletes."

Kentucky cornerback Anthony Mosely, who gathered signatures from his teammates, stated, “I felt it was important for the petition to be circulated because of the information it held in its contents. The players should know the details that deal with their collegiate future. We as players put so much time, energy, and pride into what we represent. To be under-supported within the NCAA given all of the new money that we’re generating for our schools is just horrible.”

The NCPA believe that:

• The average scholarship shortfall (out-of-pocket expenses) for each “full” scholarship athlete was approximately $3222 per player during the 2010-11 school year.
• The room and board provisions in a full scholarship leave 85% of players living on campus and 86% of players living off campus living below the federal poverty line.
• The fair market value of the average FBS football and basketball player was $121,048 and $265,027, respectively.

"Yeah, we're going to school for free, but when I'm 40 years old, I've got a good degree and everything, but if I can't walk up a flight of stairs, what did I get out of it besides a few bowl games, some rings, things like that?" McCoy told ESPN.

"Without identifying a funding mechanism, it is hard to see how many of these schools would be able to pay this added amount, which -- depending upon the number of student-athletes -- could approximate $1 million a year," Purdue athletic director Morgan Burke, a member of the NCAA Division I Leadership Council added.

There are many questions that need to be asked? College athletics have long believed in a system whereby all (or most) athletes are created equally. Is a women’s basketball not as committed to her school as a men’s basketball player? Does a football player at Notre Dame generate more money for his school then a football player at Boston University? What about college hockey players? Their sport generates some revenues, obviously not as much as men’s basketball and football, but should men’s (and women’s) hockey players not receive their share of the pie?

Purdue quarterback Rob Henry, who asked more than 70 teammates to sign the petition, told ESPN that the belief that college athletes should be grateful for receiving a mostly-free education is misplaced. He called the player demands a matter of simple fairness.

"Without the athletes, there are no Division I sports," he said. "There are no TV contracts, there are no coaches' contracts. Athletes should be the number one priority."

“I’ve heard a lot of people say, ‘Well, you want to do this $2,000 cost-of-attendance thing to reduce the probability of students breaking rules,’ and that’s nonsense,” Emmert told the Knight Commission on Intercollegiate Athletics during a three-hour meeting at Washington’s Ritz-Carlton. “People break rules because they break rules.”

The concept is easy to understand but at the end of the day will it create a two-tier NCAA? Will it create an NCAA where the best athletes go to the schools that can afford to pay them that extra $2,000? And how bad is that at the end of the day?

“President Emmert said some conferences will do this and some won’t, and it’s pretty clear to me who will and who won’t,” Boise State’s president, Robert Kustra, said to the New York Times. “There’s already a great divide between larger conferences and the smaller conferences, and this is just going to exacerbate the gap between the haves and have-nots.”

Thomas Ross, the president of the University of North Carolina system, acknowledged Kustra’s fears. “It does create an edge for the big guys,” he said.

Louisiana State’s chancellor, Michael Martin, told The N his university could probably afford the added expense, but he would not be surprised if it was met with resistance on his campus.

“I’ve got 1,400 faculty members who would love to have $2,000 more a year having gone four years without any pay raise,” Martin said.

Martin, who was previously New Mexico State’s president, also said he empathized with the possible plight of a university that did not have the needed resources. He told the Times that adding another $2,000 per athlete per year at New Mexico State could make it “almost impossible to do anything but hang onto the edge.”

Change, especially when it comes to groups like the NCAA, rarely happens overnight. These changes will be met with resistance at first but at the end of the day the bigger schools will pay the price, the smaller schools won’t and the best athletes will go to schools were they’ll receive the biggest bang for their talent. A step forward, yes and no, but a debate that is certain to continue.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The New York Times and ESPN

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