Can Congress help with the Power 5’s ‘must haves’ and ‘negotiated issues’?

On3 imageby:Andy Wittry03/01/23


An internal memo from the Atlantic Coast Conference provided new insight into what the Power 5 conferences want from federal legislation and on which issues they’re potentially willing to negotiate.

To gauge the likelihood of the Power 5 getting what it wants, On3 surveyed several stakeholders who have experience advocating for reform in college athletics to evaluate the Power 5’s reported wish list and bargaining chips for federal legislation. The upshot: Navigating various constituencies in Congress appears unlikely as the Power 5 seeks to prevent college athletes from becoming employees or claiming a share of the increasingly valuable revenue from media rights.

The five “must haves” on which the memo said Power 5 conference working groups had reached a consensus included the prevention of three things: college athletes being classified as employees; the granting of athletes’ name, image and likeness rights in telecasts of games; and the utilization of NIL deals as recruiting or participatory inducements.

The other two “must haves” were the preemption of state NIL laws through federal legislation and an antitrust exemption.

“I think these things range from highly unlikely to near-impossible, based on the current makeup of Congress and the presidency,” said Jordan Acker, who’s an equity partner at the law firm Goodman Acker PC, a member of the University of Michigan Board of Regents and formerly an attorney-advisor at the Department of Homeland Security. “I think that it’s important for conferences and institutions to set their priorities when it comes to NIL and college athletics, but I think expecting this Congress to act and have a bill signed by the president is highly unlikely at best.”

The ACC memo says the smaller-than-expected Republican majority in the House of Representatives could “necessitate a longer timeline and require simultaneous negotiations with the Democrat-led Senate, which will be challenging.”

“I think I can probably guarantee they won’t get all five and they probably know that, so I think the antitrust exemption is probably going to be the biggest one (they won’t get),” said David Ridpath, an associate professor of sports business at Ohio University and a longtime member of The Drake Group, which advocates for “positive legislative change in college athletics.”

“The other one that I think is also futile, though,” Ridpath said, “is I think it’s time that we just accept that NILs are part of the recruiting soup, and like anything else in recruiting, some schools are going to have a leg up in certain areas.”

The ACC memo also identified three “negotiated issues” that the Power 5 could possibly compromise on. Those three issues were a form of pay-for-play, expanded healthcare and an entity – either created or preexisting – that would enforce a potential federal law(s) relating to college athletics.

“It’s really kind of trying to give the minimum in order to keep the really good stuff,” said Michael Hsu, a former University of Minnesota regent. He also is the co-founder of the College Basketball Players Association, an advocacy group that filed the first unfair labor practice change with the NLRB, accusing the NCAA of violating the National Labor Relations Act by classifying college athletes as student-athletes.

Players as employees big concern for NCAA

It’s no coincidence that the first of the “must haves” listed in the memo is “no employee status of student-athletes.” “It’s a ‘Hail Mary,’ in a sense,” Ridpath said.

There are multiple current threats to the NCAA model that could create a path for athletes to become employees.

One is Johnson v. NCAA. The plaintiffs – former Villanova football player Trey Johnson and other Division I athletes – are asking that athletes be deemed employees subject to the Fair Labor Standards Act. That requires covered employees be paid minimum wage and overtime pay. While the case’s focus is narrow, a determination that college athletes are employees would be monumental. A panel of three judges on the U.S. Court of Appeals for the Third Circuit in Philadelphia recently heard oral arguments.

In December, the NLRB’s Los Angeles region office found merit in an unfair labor charge that the National College Players Association (NCPA) filed in regard to USC athletes. The NLRB region office found merit that USC, the Pac-12 Conference and NCAA are joint employers. The next step is a formal NLRB hearing, which is subject to appeal.

“They’re basically trying to end the athletes’ rights movement, effectively by saying they have no status,” Hsu said of the Power 5 request.

Hsu said the NCAA’s classification of players as “student-athletes” was something the organization came up with decades ago. “I mean, this is a 70-year misclassification,” he said.

In 2021, Hsu filed with the NLRB an unfair labor practice charge against the NCAA. Hsu said he perceived that athletes in certain sports basically were treated as essential workers during the COVID-19 pandemic. Hsu said Minnesota’s Board of Regents was informed the athletic department was going to lose $70 million “if we didn’t play games, if we couldn’t make good on our share of the TV contracts.” Minnesota received roughly $42 million in media-rights revenue out of the $55 million it could have earned, Hsu said.

“The only way to circumvent it,” Hsu said of the legal threats to the NCAA’s current model of amateurism, “ … is to get Congress to make a law that allows the NCAA and all its member schools and conferences to go ahead and basically do what they’ve been doing all these years, which is to make money off of the athletes.”

Senate help forthcoming?

A spokesperson for Sen. Tommy Tuberville (R-Ala.) declined to comment on whether Tuberville would be willing to sponsor legislation that includes the “must haves” outlined in the memo if the federal bill allowed a form or pay-for-play or expanded healthcare. Tuberville and Sen. Joe Manchin (D-W.Va.) are in the process of drafting a bill they plan to introduce this spring. Sportico has reported that Tuberville “does not foresee a federal bill passing the next Congress that would include an antitrust exemption for the NCAA.”

“The Power 5 has made it clear that this patchwork of state rules and an NCAA that took itself out of the game through their own failures has left way too much ambiguity, shifting opportunities and expectations and a lack of clarity for both the athletes and institutions,” said Julie Sommer, a Seattle-based attorney at Sommer Law, PLLC. She’s president-elect of The Drake Group and is a former swimmer at Texas.

Sen. Roger Wicker (R-Miss.) introduced in December 2020, then reintroduced last September, the Collegiate Athlete Compensation Rights Act. The most recent version of the bill proposed the creation of an Office of Sport within the Federal Trade Commission (FTC) to “provide the agency with the focus and expertise needed to combat unfair and deceptive practices related to NIL.” The ACC memo advocated for a “strong, pro-A5 bill passed fairly quickly by the House of Representatives (along the lines of the favorable Wicker bill that was introduced in the Senate by Senator Wicker during the 2020 term).” A spokesperson for Wicker declined to comment on the “must haves.”

The ACC memo said it understood that the NCAA has a committee that may intend to negotiate with Congress, but that the Power 5 schools plan to be “the driver of this legislation.”

“I also think it opens up a whole lot more questions than answers,” Sommer said.

Charlie Baker officially replaced Mark Emmert as NCAA president on Wednesday. Baker previously was governor of Massachusetts, and was noted for getting things done as a Republican in a state government controlled by Democrats. USA TODAY reported Baker will not move to Indianapolis, where the NCAA is headquartered is located. Instead, he’ll remain in Massachusetts, closer to Capitol Hill.

“I find it highly unlikely that prior to the 2024 elections that anything gets passed out of a committee, let alone onto the floor,” Acker said.

On3 requested comment from the NCAA on the ACC memo, but the organization hasn’t responded.

Holding onto media rights revenue is important to schools

Every NCAA Division I member institution is required to file annually an NCAA Membership Financial Reporting System report, which details its athletic department’s revenues and expenses. They’re an imperfect window into the finances of major college athletics.

On3 has the reports for all 52 public Power 5 institutions for whom financial reports are available. Private institutions are exempt from public records requests. On average, revenue from media rights represented roughly 30 percent of the total operating revenue for public Power 5 institutions in 2021.

The memo’s second “must have” – “No student-athlete NIL rights in media telecasts of games” – is an attempt to protect that significant revenue source. On average across the Power 5, media rights often provide the most revenue for an athletic department. For some athletic departments, ticket sales or contributions from donors could rival or exceed media rights revenue.

“As we know, the pros [pro athletes] have negotiated and they’re getting 50 percent of the league revenue and I think that’s what everybody’s afraid of,” Hsu said. “They’re afraid of employee status, which leads to collective action and collective bargaining, which could lead to the fact that the NCAA and member schools and conferences will have to share 50 percent of the revenue.”

So if the Power 5’s appeal to Congress falls short, if negotiating for these so-called “must haves” doesn’t happen, what is the backup plan?

“The money train is moving down the track and nobody wants to jump off the train,” Hsu said. “I really don’t know what is the Plan B. Because I think a lot has changed even since the memo was finalized [in December] in terms of how long it is going to take them to get anywhere on this.

“It’s a race, really, if you look at it. There are different lanes. I’m in the employee status lane, with the NLRB. There’s the Johnson case, which is in another lane with the FLSA. Then you have the House case. That’s a big case that could bankrupt the NCAA, and so there’s all these different lanes. We’re all racing and we’re all trying to get somewhere, and the faster we can go, the more pressure we’re putting on them to get some type of resolution for their Plan A, which is the memo you uncovered.

“Plan B – I don’t know what Plan B is and I hope that somebody in the NCAA knows what Plan B is. But Plan B may be just, you know, ‘We’re going to try and resolve this through a negotiation with actual athletes and do it outside of Congress.’ So Plan A is do it within Congress and I think Plan B is going to have to be do it outside of Congress. But nobody’s willing to think about that plan right now.”