Back in 1994, CBS Sports bought the rights to the NCAA men’s basketball tournament with an eight-year contract averaging $215 million annually. This coming weekend, a single, 30-second TV ad airing during the men’s Final Four will cost the advertiser around $1.5 million.
The prospect of selling future advertising during the College Football Playoffs is seen as so lucrative that ESPN bid more than $5.5 billion over the next 12 years for the rights.
As the NCAA coffers continue to balloon, lawsuits are piling up calling for it to share its billion-dollar bounty with the players who help generate it.
Battle Tested
Fighting class-action lawsuits is nothing new for the NCAA, but it has lost its share of antitrust suits. Most notably the 1984 decision striking down the association’s control of televising college football games and then, later, in 1994, a ruling invalidating an NCAA-imposed $12,000 salary limit for assistant coaches.
More recent court rulings concerning college players’ rights to form an athletic union have gone against the NCAA. Another, brought about by UCLA’s Ed O’Bannon, gave college players additional rights in sharing revenue of TV broadcasts and video game sales.
Both rulings are being appealed by the NCAA and are in the federal appellate Ccurt system.
Did You Hear It?
These lower court rulings have put a serious crack in the NCAA’s long-held claim that its players are, in the truest sense, amateurs and not professionals.
As coaches’ signing bonuses and salaries, along with their deferred compensation packages spiral higher exponentially, it seems the public has become much more cynical about why college athletes are not receiving a share of the revenue that they help to generate.
How Much?
Local examples of soaring compensations mentioned can be verified with a quick check of the University of California’s payroll on the public website Transparent California. It shows that the U.C.’s top five, highest paid employees in 2013 were either present or former head coaches:
Steve Alford, current UCLA basketball coach — $2.64M
Jeff Tedford, former Cal football coach — $2.44M
Jim Mora, current UCLA football coach — $2.41M
Daniel Dykes, current U.C. Berkley football coach — $2.37M
Ben Howland, former UCLA basketball coach —- $2.31M
When the players’ coaches are receiving such outrageous salaries, do you really blame the athletes for wanting a piece of the action?
Enter the Dragon
Jeffery Kessler, the lead attorney in the latest anti-trust lawsuit against the NCAA, is calling for expanded free agency rights for college players. You may have heard Mr. Kessler’s name before. Over the past 20 years, he has garnered a well-known legal reputation by representing professional players’ rights against league owners. He was instrumental in bringing about free agency to the NFL and he negotiated the current free agency/salary cap systems in the NBA.
The New York Daily News recently described him as “a pain in the butt to the NFL for decades.”
Plainly, Mr. Kessler is trying to spread free agency to yet another multi-billion dollar sports industry; one still quaintly referred to by its purists as “college sports.”
Mr. Kessler’s free agency class-action suit is working its way through the judicial system. Preliminary hearings have been heard, and if the lawsuit makes it past the initial NCAA’s legal challenges, the trial could start as soon as this coming fall.
If it is successful, sports lawyers widely disagree on what the implications of his lawsuit could have on the federal law called Title IX, in concerning the treatment of female college athletes. Most agree that success probably would trigger huge tax implications for big-time college programs.
Status Quo
The NCAA argues that changing the academic system to focus solely on athletic compensation would be a mistake. Most students, they say, leave college richer by earning an academic degree, not in negotiating a multi-million dollar professional contract like the “one-and-done” college athlete.
Dissenting Point of View
In a recent interview with CBS Sports, Mr. Kessler rhetorically asked, “What is there about an educational mission for the SEC schools to spend $25 million this year on digital television studios on their campuses for the SEC Network? It’s a very nice business investment, but does that have anything to do with educating their students? Does that have anything to do with the student-athlete experience? It has to do with one thing: selling cable television programs. That’s okay, but acknowledge the reality.”
He continues, “The people who say, ‘Gee, I wish we went back to no television schedule and no sponsors and none of this and just focus on the educational mission,’ that’s a perfectly worthy viewpoint. Small schools, like the Ivy League, do that. That’s a perfectly legitimate choice. Maybe in some sense, it’s a better world. But the world we live in, there are more than 150 schools who have made a very different choice. Those schools have decided to engage as businesses to generate huge amounts of revenues. What they need to do is treat fairly the people who helped them generate those revenues.”
Legal Summation
But Mr. Kessler’s lawsuit asserts that 2-20 years ago, football and men’s basketball programs generated far less revenue than they do today. Mr. Kessler points out that as you look around, everything that’s going on is about money — even conference realignments are based purely on financial considerations. The NCAA’s ability to maintain its façade (of amateurism) has been decreasing at an accelerating rate.
We know times change. If Jeffery Kessel has anything to say about it, the time to change the NCAA’s business model is coming, much sooner than later.
Mr. Laase may be contacted at GMLaase@aol.com
