On the NCAA seeking a narrowly focused NIL bill and the ‘inexorable road’ to athletes becoming employees

On3 imageby:Eric Prisbell03/13/23


Is it a mistake for the NCAA to push Congress on passing federal legislation that addresses too many big-ticket items, namely NIL, potential employee rights for athletes and antitrust issues? Would it be better served to focus on achieving a relatively smaller victory and pushing Congress only on NIL legislation right now?

Tom McMillen, a former Congressmen who is the CEO of LEAD1 Association, which advocates on policy issues facing FBS athletic departments, says pursuing an NIL-only bill right now is the way to go. LEAD1 Association creates working groups on issues such as NIL, transfers, diversity, equity and inclusion and enforcement, and it provides feedback to the NCAA on best practices for representative governance. It also seeks to generate consensus opinion among FBS athletic directors on significant issues.

Two of the important takeaways from a wide-ranging discussion with McMillen:

+ McMillen sees Congress passing a federal bill addressing NIL. But it needs to be narrowly focused. It could include other related items, such as Title IX protections. McMillen says new NCAA president Charlie Baker needs to get all conferences behind him – “get his army behind him” – and focus on achieving this initial victory before seeking help on larger issues, such as potential employee rights for athletes and antitrust issues.

+ McMillen believes college sports is on an “inexorable road” toward athletes having employee rights. Among athletic directors, he said there is a “high level” of concern regarding this scenario taking hold. Under the employment model, he said, one consequence is that the vast majority of college athletes, some 90 percent who don’t play in revenue-producing sports at marquee schools, could face diminished opportunities. McMillen says some schools could devolve into offering club-level sports teams.

The interview has been lightly edited for clarity and context. Part two will run Tuesday.

Q: Aside from appealing to Congress for a federal bill addressing NIL, potential employee status and antitrust issues, what should new NCAA president Charlie Baker’s priority be in year one?

McMILLEN: I actually sent him a memo where I said there are 99 conferences and I really believe that’s his army. You’ve got to get that army behind you in order to move anyone, whether it’s the state legislature or Congress. That is essential. But he gets that. When I talk to him, he understands. He has run for office. He knows that’s what it’s about. (Last week) on the Hill, he was with Lori Trahan [D-Mass.], a former Georgetown athlete who has been very active on these issues. She and Gov. Baker [Baker is the former governor of Massachusetts] have had a long relationship. They had a very good conversation. Gov. Baker, he texted me afterward, he really believes in transparency. It’s a big, big issue here. There has to be a more transparent marketplace. Without it, you’re inevitably going to have controversies and horrible things happen. Even with it, you could have those things happen. Transparency is so necessary. I think he is doing the right thing. She is a player on the House side; there are players on the Senate side. One of the priorities will be to make sure you get your army behind him, those 99 conferences.

Number two, you’ve got to go around and start kissing the ring of a lot of members of Congress and really listening to their concerns. And obviously he has got to work very closely with the conferences. You had everybody doing their own independent thing on the Hill. They all had their own lobbyists. That is not a way to get constructive things done. You’ve got to all be in sync on a plan. That will be a major task for him, to get in sync on a plan. 

As I conveyed to Gov. Baker, I think that he should focus on a national NIL bill and not deal with the employment and antitrust issues right now. The reason I say that is because I think the climate is right for NIL. But there has not been enough spadework on antitrust issues and the employment issue. I think that will take several years of spadework, and he’s got to really mobilize his army. Those 1,200 schools in the NCAA, I’ll tell you what they all agree on: They agree that we need a consistent national standard on NIL. I can’t believe there’s a school that wouldn’t go along with that. That’s pretty important to have 1,200 schools (with a consensus). They all have a congressman. They all have two senators. They all have spheres of influence. That has to be mobilized.

But guess what: He understands that better than anyone. He understands that better than me. He will do that. He will get his army together. He will come at it with a consistent message. The conferences have to get on the same page, or they won’t get anything done. That’s a fact. They can’t be anymore, “We’re going into this meeting with legislators. We don’t want the NCAA there.” That won’t work. They all have to be on the same team. They have got to get together and work together. With a fresh face in Gov. Baker, who understands politics, that is very doable. He’s got to get the conferences together. He’s got to get his army together. Those are the two most important things he’s got to do. He’s got to narrow the focus on his congressional determinations.

Q: If the NCAA’s push for a bill falls short, what’s the backup plan? What’s Plan B?

McMILLEN: OK, so realize that in the last 40 years, there’s only been three pure Congress bills passed involving college sports. One was the Student Right to Know bill in 1990. That was the bill that [then Senator from New Jersey] Bill Bradley and I put out. It was graduation rate disclosure. The second one was a financial disclosure bill … a very constructive thing, all transparency and disclosure. And then the third bill was when [then-Tennessee Rep.] Bart Gordon passed the bill to have national standards for agents [in college sports]. There’s only been a handful of bills. It is very hard. It’s just not something that gets done very often. So what’s plan B? You have to understand, when we passed the Student Right to Know bill, the NCAA was opposed to it. They were opposed to most of these bills. I’m sure they were opposed to the bill on financial disclosure. They were opposed to the Student Right to Know bill. What happened was [former NFL player] Dexter Manley testified in front of the Senate committee on literacy. And he said when he finished school [at Oklahoma State], he couldn’t read or write. All of a sudden, that was the catalyst to say, “Look, we need a national graduation rate disclosure bill.” 

Plan B, in my view, is that there will be a scandal. And it will compel Congress to act. It just always works that way. We don’t want that to happen. We would rather do this preemptively. But plan B is there’s going to be a crisis. You have a situation where you really have unaccountable [NIL] collectives, and student-athletes without a transparent market. There will be some student-athlete that really gets screwed. It will be a national story. I already think Congress is moving in that direction on its own, but plan B would be just inevitably there’s a scandal and Congress eventually acts. But I think they’ll act in this Congress. But failing that, I think there will be a scandal and something will emerge.

Plan C, I think, is … I think the schools need to be more involved. The idea that you have these collectives, these third-party entities doing this, I’ve heard from athletic directors that said, in some of these collectives, they wouldn’t even hire the people that are running them for the athletic department. There is a tremendous discrepancy in the quality of management. Number two, you don’t have accountability on these things. You’re allowing boosters to really kind of run wild. And you would never see that happen in the NFL or the NBA. You’d never let your most important asset, your athletes, be sort of handled by third parties that you have no control over. And so that’s one thing that needs to be done.

They should recommend a uniform law across the states that allows the schools to be involved. It should be consistent. It’s crazy that Texas can’t be but Tennessee can. It should be a uniform law. But Gov. Baker has the bully pulpit. He can start arguing for that, which is contradictory to where the NCAA is today. But it’s what I think it should be. You can have a player division within the school. They hire a third party. The school hires a third party for multimedia rights. They hire a third party for the student-athletes, to help them. And there will be Title IX concerns. My own view is there’s many aspects of this. If a state like Tennessee, where you are allowed to be involved, and your school is doing mostly male deals, is that de facto discrimination? Or is the school helping send boosters to a collective in another state, what is the test? Where is the line drawn? Some people think that if the school is doing anything to help these collectives, they are walking into Title IX waters. 

And finally, the other thing that I think should be done is, you know, when you’re on a public company and you’re trying to buy a company, you have to go do a fairness opinion. And I’ve said this all along, there are some databases out there that are actually pretty good. They can tell you, if you’re 10th in the country in recruiting, and have this kind of record, what your name and your publicity rights are worth. I think having third-party attestation of larger deals would be perfectly, in my view and I’m not a lawyer, would be justifiable. College sports is built on a fair recruiting model. And I think even the courts would hold that up. And so if you’re having a recruiting model where it’s just about money being thrown at kids and has no real connection to value, I think that if the NCAA tried to impose some standards on that, that may be justifiable. So I do think they could do third-party attestation. And I totally agree with Gov. Baker that somewhere along the line, and I think it’ll probably have to come through congressional action, that you’re going to need transparency. When we did our working paper – we had a working group on NIL way back in the very beginning – we’re the ones that said that there should be a “TPA,” a third-party administrator. We used that because that’s a healthcare term. We came up with that phrase because we thought it would explain what it is. And that’s still not a bad idea. But that would probably have to be congressionally ratified.

Q: Do you foresee Congress passing a federal bill related to NIL?

McMILLEN: I do. But I think it has to be narrow. Narrow in the sense that I think that there’s probably going to be some other things added to it. Maybe a medical trust; you may want a medical trust fund. There may be some Title IX protections in there. I wouldn’t be surprised if they codified – maybe some more enforcement on Title IX and even some Title IX provisions with respect to name, image and likeness. So the point of it is that as [former Secretary of Defense] Robert Gates said on “Meet the Press” the other day, “Look, I hate going to Congress because you’re gonna get things you don’t want.” And, yes, you will get, I think, a national NIL bill, but you may get some things you don’t want as well. But I think those are livable. And then I think step two down the road is looking at the bigger issues – employment and antitrust.

Q: In the Johnson v. NCAA hearing a few weeks ago, the three judges telegraphed their feelings to an extent. How would you characterize the level of concern among athletic directors as a whole about this becoming a reality in the coming years – that athletes will be deemed employees?

McMILLEN: There’s a very high level of concern about the whole thing. And just because appeal court judges ask tough questions is not determinative in any respect. Remember, the narrow decision here is whether to send it back to the lower court, which I think they’ll end up doing with some kind of instructions. But there is an inexorable road that we are on toward employment rights for student athletes. I think Democrats in Congress see that. Somewhere along the line – the National Labor Relations Board, the California court in the House case, the Johnson case – somewhere on the line, you’re going to see this happen. I just think it’s inexorable. But it’s not overnight, so I think lumping that in right now into an NIL discussion would be a mistake. And I also think, getting a victory on NIL, which is really small ball in the scheme of things, would be a very positive thing for college sports and for Gov. Baker, by the way. 

I think he’s right about transparency. Any bill, you’re going to want to deal with retroactive liability. You’re going to want to deal with a national standard. You’re going to want to deal with some kind of transparency. In my view, I think you need to allow the schools to be involved. And I think you’re probably going to have to have some Title IX clarification. Remember, one thing about Title IX, it’s about equal opportunity, not equal outcomes. For instance, when you go to a bookstore on the campus, you’ll see men’s jerseys and women’s jerseys. It is not required that the sales of those jerseys be the same. It is required that they are both in the bookstore. So if you have this more involved in the athletic department, they’re going to have to put equal resources into men and with respect to procurement of opportunities. I think it’s doable. And I’m also optimistic. I’ve talked to a lot of members of Congress. And there are a lot of people working on it. Congressman [Gus] Bilirakis [from Florida] is the new head of the consumer subcommittee and he’s working on it. And the Senator from Colorado, [John] Hickenlooper, he’s now the new chair of the subcommittee in the Senate. There’s lots of interest on this issue, and I think that’s good. 

Q: Industry sources I’ve talked to say that if athletes were deemed employees, it would be a mixed bag for them. Under an employee model, do you view that as a net positive or a net negative for athletes in the long run?

McMILLEN: So for a handful, it may be a plus. But I think for the vast majority, it could be detrimental. Let me just go through some things that people don’t talk about. So there’s a half a million kids who play college sports, many of whom are in smaller schools. So if you look at the FBS – and you take out the Autonomy Five, we have 60-some schools in the autonomy [it’ll be 69 beginning in July] – you go down from there, the rest of the schools in the NCAA, the rest, the majority of their income is student fees and distributions from the school. OK, in other words, financial support from the school. And I’ve talked to ADs about this, and you can be sure that if student-athletes are employees, in bargaining and all that, that you’re going to have a lot less appetite for student fees and for institutional support. That’s just one consequence.

So what happens? Your whole revenue base of your athletic department is just basically overnight destroyed, except the handful of schools. It has got to mean that you’re going to have to make adjustments. So for a lot of student-athletes, they will have lesser opportunities or no opportunities. So when you ask that question, I think there’ll be a lot of kids that will be left behind. That is not a list of horribles. That’s just reality. Think about how college sports are financed today. We always look at college sports through the lens of revenue – basketball, football – in the biggest of schools. But we forget there’s 1,100 schools and most of them don’t have a positive revenue model. Most of them are losing money. They’re supported by the school. And they’re supported by student fees. And I think that world changes dramatically. So I would say, for those schools that have means, and on a means test basis, in basketball, football, particularly, I think you’re going to have to have a discussion of a new social contract for those athletes because I don’t think it’s sustainable to have management unfettered in terms of their compensation. And when I talk about means tested, I’m talking about when revenue is significantly being produced, you are going to have to have some consideration for labor. I think in the long term, whether it’s the courts or Congress or anything else, that would be an untenable argument. Charlie Baker says it very well: 90% of the college programs don’t fit into that category. I think he’s right to draw the differentiation because there’s a difference. There’s a difference between schools, like in Maryland with the University of Maryland and Towson University. There’s just differences.

Q: And when you say 90% of athletes would have little to no opportunities under an employment model, are you talking about schools eliminating sports because they can’t sustain them financially?

McMILLEN: One of the things that I’ve often wondered about is, I was going to really do some research on this, you can see a lot of sports going down to a club level. It would be a diminishment of opportunity. In fairness, you’re going to have a much more sort of green-eyeshade approach to it. In other words, I can’t say the present model, where your softball team is flying to California to play games, that model probably wouldn’t be sustainable under those kinds of circumstances. It would have to go club, very local. In that respect, that would be a diminishment of opportunities for certain kids.