Chapter SEVENTEEN

Amateurism and Reform

INTRODUCTION

At the heart of the push for reforming collegiate sports is changing views of amateurism. As the readings that follow highlight, for most of the time that organized collegiate sports have existed, Americans have believed that there should be a class of athletes that participate in sports for the glory of the games alone. Even as the Olympic Games have moved away from this view, collegiate sports, under the governance of the NCAA, continue to hold fast, as the readings in this chapter highlight.

The excerpt from Kenneth L. Shropshire’s “Legislation for the Glory of Sport: Amateurism and Compensation” provides a historic overview of amateurism and the mythology and misconceptions associated with its lofty status. The article briefly traces the history that provides the foundation for the lingering beliefs of the righteousness of what are arguably outdated concepts of amateurism. Once the reality of amateurism is grasped, the important question becomes whether any reforms recognizing this reality will improve college sports.

The next excerpt, from Peter Goplerud III, provides an examination of the possibilities of “pay for play”; that is, paying student-athletes based on their athletic abilities. Christopher A. Callanan’s “Advice for the Next Jeremy Bloom: An Elite Athlete’s Guide to NCAA Amateurism Regulations” discusses the issue of athlete compensation by examining the case of a unique two-sport athlete.

The chapter concludes with three selections focused on reform in collegiate sports. The first is an excerpt from James L. Shulman and William G. Bowen’s The Game of Life. The piece focuses on the findings of their extensive study of the role of athletics in America’s colleges and universities and, particularly, insight on the participating athletes. The next selection is part of a report from The Knight Foundation Commission on Intercollegiate Athletics entitled “A Call to Action: Reconnecting College Sports and Higher Education.” This document, published in June 2001, is probably the best-known effort focused on the reform of collegiate sports. Many individuals believe that the Knight Commission’s ongoing efforts led to college presidents taking greater control of their athletic programs. The final excerpt is the Executive Summary from a 2009 Knight Commission report. The focus of this excerpt is on cost containment by university presidents in the Football Bowl Subdivision.

THE IDEAL

LEGISLATION FOR THE GLORY OF SPORT: AMATEURISM AND COMPENSATION

Kenneth L. Shropshire

….

B.  ORIGIN OF THE RULES AGAINST COMPENSATION

1.  Ancient Greeks

A common misconception held by many people today is that the foundation of collegiate amateurism had its genesis in the Olympic model of the ancient Greeks…. The “myth” of ancient amateurism held that there was some society, presumably the Greeks, that took part in sport solely for the associated glory while receiving no compensation for either participating or winning.¹⁰ In his book, The Olympic Myth of Greek Amateur Athletics,¹¹ classicist David C. Young reported finding “no mention of amateurism in Greek sources, no reference to amateur athletes, and no evidence that the concept of ‘amateurism’ was even known in antiquity. The truth is that ‘amateur’ is one thing for which the ancient Greeks never even had a word.”¹² Young further traces the various levels of compensation that were awarded in these ancient times including a monstrous prize in one event that was the equivalent of ten years worth of wages.¹³

The absence of compensation was not an essential element of Greek athletics.¹⁴ Specifically, the ancient Greeks “had no known restrictions on granting awards to athletes.”¹⁵ Many athletes were generously rewarded. Professor Young asserts that the only real disagreement among classical scholars is not whether payments were made to the athletes but only when such payments began.

The myth concerning ancient Greek athletics was apparently developed and perpetuated by the very same individuals that would ultimately benefit from the implementation of such a system.¹⁶ The scholars most often cited for espousing these views of Greek amateurism were those who sought to promote an athletic system they supported as being derived from ancient precedent.¹⁷ In his work, Professor Young systematically proves these theories false by countering with direct evidence and an analysis of the motivation for presenting inaccurate information. Similar faults by other scholars led to the inevitable development of fallacious cross-citations with each relying upon the other for authority.¹⁸ One scholar is believed to have actually created a detailed account of an ancient Greek athlete which Professor Young concluded was a “sham” and “outright historical fiction.”¹⁹ The reasoning behind such deliberate falsehoods was apparently designed to serve as “a moral lesson to modern man.”²⁰

In simplest terms, these scholars were part of a justification process for an elite British athletic system destined to find its way into American collegiate athletics. “They represent examples of a far-flung and amazingly successful deception, a kind of historical hoax, in which scholar[s] joined hands with sportsm[e]n and administrator[s] so as to mislead the public and influence modern sporting life.”²¹ With amateurism widely proclaimed by the scholars of the day, the natural tendency was for non-scholars to join in and heed the cry as well.

The leading voice in the United States espousing the strict segregation of pay and amateurism was Avery Brundage, former President of both the United States Olympic Committee (USOC) and the International Olympic Committee (IOC).²² Brundage believed that the ancient Olympic Games, which for centuries blossomed as amateur competition, eventually degenerated as excesses and abuses developed attributable to professionalism.²³ “What was originally fun, recreation, a diversion, and a pastime became a business…. The Games … lost their purity and high idealism, and were finally abolished…. Sport must be for sport’s sake.”²⁴ Brundage was firmly against amateurs receiving any remuneration, justifying his belief upon the Greek amateur athletic fallacy. Brundage took extraordinary action during his tenure as president of the USOC and the IOC to ensure such a prohibition….

Professor Young and other like-minded scholars contend that the development of the present day system of collegiate amateurism is not modeled after the ancient Greeks. Rather, today’s amateurism is a direct descendant of the Avery Brundages of the world and is actually much more reflective of the practices developed in Victorian England than those originated in ancient Greece.

2.  England

In 1866, the Amateur Athletic Club of England published a definition of the term “amateur.”²⁶ Although the term had been in use for many years, this was, perhaps, the first official definition of the word. The definition which was provided by that particular sports organization required an amateur to be one who had never engaged in open competition for money or prizes, never taught athletics as a profession, and one who was not a “mechanic, artisan or laborer.”²⁷

The Amateur Athletic Club of England was established to give English gentlemen the opportunity to compete against each other without having to involve and compete against professionals.²⁸ However, the term “professional” in Victorian England did not merely connote one who engaged in athletics for profit, but was primarily indicative of one’s social class.²⁹ It was the dominant view in the latter half of the nineteenth century that not only were those who competed for money basically inferior in nature, but that they were “also a person of questionable character.”³⁰ The social distinction of amateurism, attributable to the prevailing aristocratic attitude at the time, provided the incentive for victory. “When an amateur lost a contest to a working man he lost more than the race… He lost his identity… His life’s premise disappeared; namely that he was innately superior to the working man in all ways.”³¹ Thus, concepts of British amateurism developed along class lines, and were reinforced by the “mechanics clauses” that existed in amateur definitions. These clauses typically prevented mechanics, artisans, and laborers from participation in amateur sport. The reasoning behind the “mechanics clause” was the belief that the use of muscles as part of one’s employment offered an unfair competitive advantage.³² Eventually, under the guise of bringing order to athletic competition, private athletic clubs were formed that effectively restricted competition “on the basis of ability and social position” and not on the basis of money.³³ Over the years this distinction has been used to identify those athletes who are ineligible for amateur competition, because their ability to support themselves based solely on their athletic prowess has given them a special competitive advantage.³⁴ It is from these antiquated rules that the modern eligibility rules of the NCAA evolved. Any remaining negative connotations regarding professionalism owe their continued existence to these distinctions.

Figure 1  NCAA Constitution, Article 2.9—The Principle of Amateurism

Source: 2009–2010 NCAA Division I Manual, p. 4. © National Collegiate Athletic Association. 2008–2010. All rights reserved.

Figure 2  NCAA Bylaw 12.01.1—Eligibility for Intercollegiate Athletics

Source: 2009–2010 NCAA Division I Manual, p. 61. © National Collegiate Athletic Association. 2008–2010. All rights reserved.

3.  United States

The amateur/professional dilemma confronting today’s American universities is based on the presumption that if a college competes at a purely amateur level it will lose prestige and revenue, as it loses contests. However, open acknowledgement of the adoption of professional athleticism would result in a loss of respectability for the university as a bastion of academia. The present solution to this dilemma has been for collegiate athletic departments to “claim amateurism to the world, while in fact accepting a professional mode of operation.”³⁵

Two sports, baseball and rowing, were the first to entertain the questions of professionalism versus amateurism in the United States. Initially, the norm for organized sports in this country was professionalism. Baseball was played at semiprofessional levels as early as 1860, and the first professional team, the Cincinnati Red Stockings, was formed in 1868.³⁶ The first amateur organization, the New York Athletic Club, was established in the United States in 1868.³⁷

In 1909, the NCAA (which had successfully evolved from the Intercollegiate Athletic Association, established in 1905) recommended the creation of particular amateur/professional distinctions.³⁸ With the subsequent adoption of these proposals, England’s Victorian amateur and professional delineations were incorporated into American intercollegiate athletics. [Ed. Note: See Figures 1 and 2.]

Prior to the adoption of the NCAA proposals, “professionalism” abounded. For example, in the 1850s Harvard University students rowed in a meet offering a $100 first prize purse, and a decade later they raced for as much as $500.³⁹ Amateurism, at least as historically conceived, was largely absent from college sports in the beginning of the twentieth century. Competition for cash and prizes, collection of gate revenue, provisions for recruiting, training, and tutoring of athletes, as well as the payment of athletes and hiring of professional coaches had invaded the arena of intercollegiate athletics.⁴⁰ … The sheer number of competing American educational institutions was, in itself, a major reason that athletics in the United States developed far beyond the amateurism still displayed [by their] learned British counterparts. In England, an upper level education meant one of two places, either Oxford or Cambridge. With each institution policing the other, the odds of breaching the established standards of amateurism were not high. In the United States, while the Ivy League schools competed strongly amongst themselves, there was also the rapid emergence of many fine public colleges and universities.⁴² Freedom of opportunity, a pervasive factor in the genesis of American collegiate athletics, made it increasingly more difficult for the Harvards and Yales to maintain themselves as both the athletic and the intellectual elite within the United States.⁴³

According to some scholars, the English system of amateurism, “loosely” derived from the Greeks, simply did not have a chance of success in the United States. As noted above, one factor contributing to its demise was increased competition among a larger number of institutions. Another was the difference in egalitarian beliefs between the two nations:

Figure 3  NCAA Bylaw 12.01.2—Clear Line of Demarcation

Source: 2009–2010 NCAA Division I Manual, p. 61. © National Collegiate Athletic Association. 2008–2010. All rights reserved.

In spite of the ideological conflicts, the early post-formative years of the NCAA were spent attempting to enforce the various amateur standards. The first eligibility code sought only to insure that those who participated in collegiate athletics were actually full-time registered students who were not being paid for their participation.⁴⁵ This initial set of amateur guidelines was largely ignored by the NCAA member institutions. After establishing this initial code, the NCAA sought on numerous occasions to further define its views on amateurism. An intermediate step was the formal adoption of the Amateur Code into the NCAA constitution.⁴⁶ The impetus behind the adoption was “to enunciate more clearly the NCAA’s purpose; to incorporate the amateur definition and principles of amateur spirit; and to widen the scope of government.”⁴⁷ As the monetary resources of the NCAA grew, so too did its enforcement power. The prime targets of those enhanced enforcement powers were the principles of amateurism as incorporated into the NCAA constitution. [Ed. Note: See Figure 3.]

The motivation to cheat existed even in the formative years of collegiate sports. Winning athletic programs had the potential to return high revenues to the institution. In its early years as a national football power, Yale University made $105,000 from its successful 1903 football program.⁴⁸ Thus, the financial incentive to succeed existed even then, and has continued to serve as a strong incentive for many schools to break the rules in order to obtain the best talent.

[Ed. Note: The author’s discussion of the Sanity Code is omitted. See discussion of the Sanity Code in Chapter 13.]

….

The NCAA was an organization formed to promote safety in collegiate sports. It later adopted the prevailing views of amateurism and is currently the largest sports organization to prohibit member athletes from receiving compensation. [Ed. Note: See Figures 4 and 5.] The lack of compensation for the student participant permeates virtually all decisions in collegiate athletics today. Although the NCAA does not deliberately promote or associate itself with the tales of Greek amateurism, nothing has been done to correct popular misconceptions.

Notes

….

10.  David C. Young, The Olympic Myth of Greek Amateur Athletics 7 Ares Publishers (1985).

11.  Id.

12.  Id.

Figure 4  NCAA Bylaw 12.1.2—Amateur Status

Source: 2009–2010 NCAA Division I Manual, pp. 62–63. © National Collegiate Athletic Association. 2008–2010. All rights reserved.

Figure 5  NCAA Constitution, Article 2.13—The Principle Governing Financial Aid

Source: 2009–2010 NCAA Division I Manual, p. 5. © National Collegiate Athletic Association. 2008–2010. All rights reserved.

13.  Id. He notes later that in a single running event the winner received enough money to buy six or seven slaves, 100 sheep or three houses. Id. at 127.

14.  Id. at 7.

15.  Eugene Glader, Amateurism and Athletics 54 Human Kinetics (1978).

16.  Young, supra note 10, at 8.

17.  Professor Young cites an article written by classical scholar, Paul Shorey, in The Forum as an example of one of the first misstatements of the actual history:

And here lies the chief, if somewhat obvious, lesson that our modern athletes have to learn from Olympia …. They must strive … only for the complete development of their manhood, and their sole prizes must be the conscious delight in the exercise … and some simple symbol of honor. They must not prostitute the vigor of their youth for gold, directly or indirectly…. [T]he commercial spirit … is fatal, as the Greeks learned …. Where money is the stake, men will inevitably tend to rate the end above the means, or rather to misconceive the true end … the professional will usurp the place of the amateur …. [emphasis in original]. Id. at 9.

Shorey’s article was written prior to the first modern Olympiad held in Athens in 1896 and it was directed at the potential Olympians. Id. at 9. Young maintains further that this was not, in fact, the first revival of the Olympics. Id. He writes that as early as 1870 a modern Olympiad took place in Athens in which cash prizes were awarded. Id. at 31.

18.  Id. at 12.

19.  Young at 12, 13. See Harold Harris, Greek Athletes and Athletics Greenwood (1964).

20.  Young, supra note 10, at 13. The lesson is apparently somewhat self-serving and designed to present in a favorable light the values of the gentlemen amateur athletes of Victorian England. Id.

21.  Id. at 14.

22.  Id. at 85. Brundage was in strong opposition to Jim Thorpe recovering his forfeited Olympic medals. The irony behind his losing the medals is evident in Thorpe’s own statements referring to the semi-professional baseball games in which he participated. “I did not play for the money … but because I liked to play ball.” Id. While other athletes participated in the same games under a variety of aliases, Thorpe did not even realize he was jeopardizing his amateur and Olympic eligibility. See Pachter, Champions of American Sport 195 (1981).

23.  Avery Brundage, USOC Report of the Games of the XIV Olympiad (1948).

24.  Id.

….

26.  Glader, Amateurism and Athletics 100 (1978).

27.  Id. at 100. See also H. Hewitt Griffin, Athletics 13–14 (1891); H.F. Wilkinson, Modern Athletics 16 (1868).

28.  Young, supra note 10, at 19.

29.  Id.

30.  Glader, supra note 26, at 15. The title “amateur” became a badge for upper class gentlemen seeking to evidence their good social standing. Young, supra note 10, at 18.

31.  Young, supra note 10, at 18 n. 17.

32.  Glader, supra note 26 at 17. See also Ronald A. Smith, Sports & Freedom: The Rise of Big Time College Athletics 166, Oxford University Press (1998) (stating that the eligibility rules of the British Amateur Rowing Assoc. in 1870 contained a similar clause).

33.  Glader, supra note 26, at 17. The laborer was classified as a professional due to his unfair physical advantage. Id.

34.  Id.

35.  Smith, supra note 32, at 166. Although the reference is made to a “professional mode of operation,” university scholarship athletes are not allowed to receive compensation above what amounts to tuition, room, board, and educational fees. Id.

36.  H. Savage, American College Athletics (1929), at 36.

37.  Young, supra note 10, at 22.

38.  Savage, supra note 36, at 42. Specifically:

1.  An amateur in athletics is one who enters and takes part in athletic contests purely in obedience to the play impulses or for the satisfaction of purely play motives and for the exercise, training, and social pleasure derived. The natural or primary attitude of mind in play determines amateurism.

2.  A professional in athletics is one who enters or takes part in any athletic contest for any other motive than the satisfaction of pure play impulses, or for the exercise, training or social pleasures derived, or one who desires and secures from his skill or who accepts of spectators, partisans or other interests, any material or economic advantage or reward. Id.

39.  Smith, supra note 32, at 169 (citing Alexander Agassiz, Rowing Fifty Years Ago, Harv. Graduates Mag., Vol. XV, at 458 (March 1907)); see also Charles W. Eliot, In Praise of Rowing, Harv. Graduates Mag., Vol. XV, at 532 (March 1907); B. W. Crowninshield, Boating, F.O. Vaille; H.A. Clark, The Harvard Book 263 (1875).

40.  Smith, supra note 32, at 171.

….

42.  Id. at 173.

43.  Id. Refusal to compete against other athletically developing schools would have caused Harvard and Yale to lose their athletic “esteem and prestige.” Id.

44.  Id. at 174.

45.  NCAA Constitution, art. VII, Eligibility Rules (1906). The first NCAA Eligibility Code is set forth below:

The following rules … are suggested as a minimum:

1.  No student shall represent a college or university in any intercollegiate game or contest, who is not taking a full schedule of work as prescribed in the catalogue of the institution.

2.  No student shall represent a college or university … who has at any time received, either directly or indirectly, money, or any other consideration, to play on any team, or … who has competed for a money prize or portion of gate money in any contest, or who has competed for any prize against a professional.

3.  No student shall represent a college or university … who is paid or received, directly or indirectly, any money, or financial concession, or emolument as past or present compensation for, or as prior consideration or inducement to play in, or enter any athletic contest, whether the said remuneration be received from, or paid by, or at the instance of any organization, committee or faculty of such college or university, or any individual whatever.

4.  No student shall represent a college or university … who has participated in intercollegiate games or contests during four previous years.

5.  No student who has been registered as a member of any other college or university shall participate in any intercollegiate game or contest until he shall have been a student of the institution which he represents for at least one college year.

6.  Candidates for positions on athletic teams shall be required to fill out cards, which shall be placed on file, giving a full statement of their previous athletic records. Id.

46.  Paul Lawrence, Unsportsmanlike Conduct: The National Collegiate Athletic Association and the Business of College Football 24, Praeger (1987).

47.  Id. (citing 1922 NCAA Proceedings at 10.)

48.  Benjamin G. Rader, American Sports from the Age of Folk Games to the Age of Spectators 268–269, Prentice-Hall (1983).

REFORM

SYMPOSIUM: SPORTS LAW AS A REFLECTION OF SOCIETY’S LAWS AND VALUES: PAY FOR PLAY FOR COLLEGE ATHLETES: NOW, MORE THAN EVER

Peter Goplerud III

I.  INTRODUCTION

Imagine a large group of employees in a company working long hours, some of them far from home, going to school full-time, and helping bring in millions of dollars to their employer. Does this sound like a sweat shop … ? Actually, this describes the typical athlete in a revenue producing sport at a National Collegiate Athletic Association (NCAA) member institution.

Approximately one year ago this author wrote an article advocating a change in the Constitution and Bylaws of the NCAA to provide for the payment of stipends to some athletes at some of its member institutions.¹ Specifically, the article proposed the payment of $150 per month to scholarship athletes in the revenue-producing sports of football and men’s basketball and to a comparable number of scholarship athletes in women’s sports. The stipend rule would have applied only to Division I member schools. An underlying premise of the article was that the concept of amateurism, a cornerstone of the NCAA, is essentially a sham due to the commercial nature of the end product. The athletes are used, abused, and then thrown out, while the schools make millions on television money, gate receipts, and sales of licensed products, many directly tied to particular players. The article suggested several legal, political, and financial hurdles that must be considered prior to implementing a policy of providing stipends for players. Included were legal concerns associated with employees, which the athletes would become under the proposal; among these would be workers’ compensation, labor, taxation, antitrust, and gender equity issues. The article also noted the internal politics of the NCAA would be an obstacle, but also opined that the new restructuring might facilitate movement towards the concept of paying players. It also attempted to calculate the costs of providing stipends to approximately 200 athletes at each Division I school. Finally, sources of revenue to pay for the proposal were suggested, notably corporate sponsors and the possibility of a Division I football playoff.

In the intervening time numerous other voices have been heard on the subject and the NCAA itself has considered several alternatives and even adopted what its membership believes to be a compromise between the status quo and the instant proposal.² However, no substantial or significant progress has been made to this point. The purpose of this article is to renew the call for a change in the rules. At this point, however, a slightly different proposal will be presented. Since this author now believes the current structure and the former proposal both present serious antitrust issues, the proposal will focus on a market-based approach to awarding stipends. It will still be limited to those athletes in revenue-producing sports and proportionate numbers of women athletes.

While there was much talk on the subject of athletes’ rights and the creation of a special task force during the remainder of 1996, the NCAA did very little at the recently completed final convention prior to restructuring. Only a modest change and an arguably ill-conceived concession to costs of attendance was approved with regard to restrictions on work during the school year by athletes on scholarship.³

It thus becomes relevant … to revisit the issue…. The basic premise will remain the same as before: the athletes at Division I schools, particularly those in revenue-producing sports, are exploited on a regular basis and must be compensated beyond the scholarship and beyond the cost of attendance.

II.  INTERCOLLEGIATE ATHLETICS AND COMMERCIALISM

[Ed. Note: The author’s discussion of NCAA regulations and commercialism is omitted.]

….

C.  The Proposal

It is time to give more serious consideration than ever before to stipends for collegiate athletes. As noted above, the proposal developed a year ago has flaws, mostly legal, which require modification. A market component must be inserted in the stipend, but the proposal must also provide for a certain amount of restraint and competitive balance in keeping with the NCAA’s long-standing concerns for both factors within collegiate athletics. Therefore, the NCAA should develop legislation providing for stipends for athletes in major revenue-producing sports at the Division I level. The stipends should be available to men in football and basketball, and women in basketball, volleyball, and other sports in sufficient numbers to satisfy gender equity requirements. The exact amount of the stipend to an individual athlete would be within the discretion of the individual school. However, the schools should have a limit on the total amount of money allocated to student-athletes. This “salary cap” would be set at an average of $300 per month per scholarship athlete, with half of the money going into a trust fund to be paid to those athletes receiving degrees within five years of matriculation. Those schools with football programs would calculate their football amounts separately with the total amount varying depending upon whether a school is Division I-A or I-AA. These athletes would also be able to work, as under the new rule, with the stipend not counting against the cost of attendance. Schools may, of course, spend less than the cap or may choose not to pay the stipend to any athletes. In addition, scholarship athletes in the non-revenue sports would be allowed to be employed during the school year, even in campus settings, and would have no cap on their earnings. The only stipulation would be that the jobs must be available to non-athlete students as well as athletes.

III.  LEGAL ISSUES WHICH ARISE FROM THE PROPOSAL

A.  Antitrust Questions

An issue which could arise should the association choose to enact legislation allowing for the payment of players would be a question of price-fixing. The proposal made a year ago is flawed in this respect. It is quite believable that an athlete in a revenue-producing sport would become disgruntled with only receiving $150 per month while competing, and find a resourceful attorney willing to bring an action under the antitrust laws. For reasons discussed below, it is likely that such an action would be successful. Thus, the more prudent legislative action would be the salary cap approach which allows for individual decision-making based upon market determinations developed by the member institutions.

The NCAA has found itself as a defendant in antitrust actions on numerous occasions, with mixed results. Section 1 of the Sherman Antitrust Act provides that: “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.”³¹ The Supreme Court has long held that only unreasonable restraints of trade are proscribed by the act.³² Some restraints on economic activity are viewed by the Court as so inherently anti-competitive that they are deemed per se illegal. Examples of this type of conduct would be group boycotts, market divisions, tying arrangements, and price-fixing.³³

It is arguable that most of the regulatory activity in which the NCAA engages is per se illegal. Actions such as the establishment of limits on the type and amount of financial aid appear to be price-fixing. Certainly a fixed stipend such as proposed previously appears to be price-fixing. However, in the context of intercollegiate athletics the Supreme Court has recognized that certain types of restrictive activity by the NCAA may, under appropriate circumstances, be allowed under the act.³⁴ The very nature of competitive sports is such that in order to promote competition, some actions which would normally be viewed as restraints will be allowed to exist. The Court has said that “what the NCAA and its member institutions market … is competition itself—contests between competing institutions” and thus, it is “an industry in which horizontal restraints on competition are essential if the product is to be available at all.”³⁵ Any number of rules relating to the size of playing fields, squad size, length of seasons, number of scholarships, academic standards, and the like must be agreed upon in order to market a product, collegiate sports, which might not otherwise be available. The Court, therefore, in reviewing a challenge to the NCAA’s actions in entering into a television contract for football, did not apply the per se rule, instead choosing to use a “rule of reason” analysis. The rule of reason analysis has been utilized in all recent antitrust cases involving the NCAA as well.³⁶

The rule of reason analysis requires the court to determine if the harm from the restraint on competition outweighs the restraint’s pro-competitive impact.³⁷ The plaintiff bears the initial burden of showing the restraint causes significant anti-competitive effects in a relevant market.³⁸ If this burden is met, the defendant must then produce evidence of the restraint’s pro-competitive effects.³⁹ If this is done, the plaintiff must finally show that any legitimate objectives of the restraint can be met through less restrictive means.⁴⁰

To date, the courts have also been consistent in upholding, against antitrust challenge, every regulatory action of the NCAA which has directly impacted athletes.⁴¹ The Supreme Court has, on the one occasion noted above, ruled against the NCAA in an antitrust action involving its proprietary action in entering into contracts for the televising of football games.⁴² There is, perhaps, reason to believe that even some of the NCAA’s regulatory activities may now be suspect under the Sherman Act.

[Ed. Note: The author’s analysis of Law v. NCAA is omitted.]

….

The NCAA’s limitations on scholarships, in so far as they prohibit stipends, are part of its regulatory program. The association would no doubt contend that these are noncommercial and, therefore, out of the purview of the Sherman Act. One jurist has labeled a similar assertion in regard to the NCAA’s rules on eligibility and the professional football draft “incredulous.”⁵⁷ It is quite clear that the rules act as a restraint on a relevant market, the labor market for collegiate athletes. They are obviously an attempt to perpetuate the amateur nature of collegiate athletics. But, this overlooks the key to the NCAA and collegiate athletics:

Amateurism has certainly been a significant part of the NCAA’s programs, but there have been and continue to be exceptions to this requirement. As recently as the 1960s, the NCAA allowed schools to provide athletes on scholarship with “laundry money.”⁵⁹ And, the NCAA has long allowed athletes who are clearly professionals, to continue to compete in collegiate athletics in other sports. The only restriction is that they may not receive financial aid from the school.⁶⁰ Collegiate athletics could survive if stipends were paid to the athletes. The strong allegiances to individual schools and traditions would survive if the athletes in certain sports received a stipend in addition to their tuition and room and board. The athletes would still be required to be full-time students. The stipend would not change the competition on the field, only the nature of the competition for players.

The present system is clearly a restraint. Many athletes do not have the funds to buy clothing, cannot fly home without going to the special assistance fund (except in an emergency), and often struggle to meet ordinary financial requirements of life.⁶¹ The restrictions are not necessary to maintain collegiate athletics; as noted there is already precedent for chipping away at the amateur nature of the venture. And, a stipend, coupled with a “salary cap,” is a less restrictive means of promoting collegiate athletics and maintaining competitive balance. It would not be possible under this proposal for a school to offer unlimited amounts of money and, in effect, act like a professional sports team during free agent signing periods.

B.  Workers’ Compensation Issues

If the proposal is adopted, even in some modified form, by the NCAA, it is likely that in most jurisdictions the athletes receiving stipends would then be covered by the workers’ compensation laws of those states. Coverage brings with it legal and financial considerations for the athletic departments impacted.⁶²

Workers’ compensation laws are state statutes enacted to compensate workers or their estates for job-related injuries or death, regardless of fault. The underlying premise of this legislation is that accidents in the workplace are inevitable, particularly in the industrial setting, and the burden of injuries caused by such accidents should be borne by the industries that benefit from the labor rather than the employees who are injured.⁶³ This philosophy is implemented by providing an employee with a guaranteed remedy of benefits and medical care in the event of an injury occurring in the course of employment. Employers are generally required to self-insure, contract with a private insurance carrier, or pay into the state workers’ compensation fund.⁶⁴ Under these statutes, each state has developed its own jurisprudence, and the determination of coverage under particular circumstances would necessitate analysis of the particular statute relevant to a particular circumstance.

[Ed. Note: The author’s analysis of various state provisions is omitted.]

….

Under most state statutes, if the NCAA adopts a stipend provision the athletes on scholarship would probably fall within existing definitions of “employee.” The stipend appears to be a wage paid for services rendered. Intent would, of course, be an issue in that a court would look to whether the stipend was any more tied to services rendered than the rest of the scholarship package. The analysis in Rensing focused on the amateur nature of collegiate athletics and the NCAA’s prohibition on payment of players.⁹⁵ Such reasoning would no longer be available to a court…. As noted, collegiate athletics is big business. If additional money is paid to players, it is likely that the school will attempt to exercise more control over them. Control, of course, is a factor used in determining whether an employment relationship exists. Arguably, a college scholarship which includes a stipend begins to look more like a professional sports contract that happens to include tuition, fees, room, board, and books as well as a cash component. Under most definitions a recipient of this type of “scholarship” would be an employee.⁹⁶

The best comparison would be to graduate assistants or teaching assistants on college campuses. The comparison is a valid one in that a graduate assistant in an English department or engineering college will often receive a tuition scholarship plus a stipend. The stipend and the scholarship are awarded in exchange for the student’s serving as a teacher for a set number of classes or laboratory sessions. In the athletic setting, the scholarship and the proposed stipend would be awarded in exchange for the student’s participation in the school’s athletic program. This would include all practice sessions, team meetings, games, and off-season conditioning programs. Failure to participate would, of course, be cause for loss of the scholarship, as would failure to maintain a certain level of competence.⁹⁷ At the University of Oklahoma, and perhaps many other universities, graduate assistants are treated as any other person on the payroll.⁹⁸ In other words, the university includes them within its workers’ compensation coverage.⁹⁹ It is difficult to understand how collegiate athletes would be treated any differently.

C.  Other Legal Issues Arising from the Proposal

1.  Gender Equity.

Gender equity measures must be taken into account when adopting the proposal. Title IX requires not only equal opportunities for participation, but equal treatment and benefits for athletes with intercollegiate programs.¹⁰⁰ Violations of the law will produce actions for injunctive relief and even for monetary damages. It is quite clear that schools providing stipends under the proposal would have to provide the stipends for a proportionate number of women athletes. Any disparities will wave red flags and likely subject the school to sanctions under the law.

2.  Labor Law Issues.

Another question which arises in the context of consideration of stipends for collegiate athletes is whether the athletes would then be employees for purposes of the National Labor Relations Act.¹⁰¹ The act essentially gives employees of businesses engaging in interstate commerce the right to organize and engage in concerted activity for the purpose of collective bargaining or other mutual aid.¹⁰² The act further defines “employee” to mean any employee unless otherwise excluded by the act.¹⁰³ The courts have construed the act to give the National Labor Relations Board great latitude in determining who is an employee under the act.¹⁰⁴ In analyzing the question with regard to collegiate athletes receiving stipends along with their scholarships, one would have to look at the conditions of that scholarship.

Scholarships for collegiate athletes typically require enrollment as a full-time student, compliance with NCAA rules, compliance with athletic department rules, and requirements established by the coaches of the particular sport. The athlete does receive some benefits similar to those of a traditional employee. If the local definition of “employee” required additional benefits to be paid to an athlete, the stipend proposed would be added support for the determination that the athlete is an employee for federal labor law purposes. Certainly the “tools of the trade” are supplied by the athletic department and the university provides the place and time of work. No athlete could be viewed as an independent contractor. The only issue is whether this stipend is for services rendered or simply a part of the scholarship. Consistent with the position taken above, the stipend must be viewed as being paid for services rendered, just as would be the case for a traditional employee. The athlete in a Division I revenue-producing sport is at her institution to participate in sports, and, oh, by the way, get an education. Again, the comparison to a graduate assistant in an academic department is instructive. The stipend paid to the graduate assistant appears to trigger tax consequences and workers’ compensation consequences similar to a traditional employee. It should also trigger labor law consequences, should the athletes desire to take advantage of them.¹⁰⁵

It is not hard to imagine the reaction throughout the world of collegiate sports should a court determine that college athletes have the right to form unions. What would be the bargaining unit? Would the linebackers be a separate unit or would they have to organize with the rest of the defensive squad? Again, one would expect significant efforts to influence Congress with regard to specific exclusions for intercollegiate athletics.

3.  Taxation Issues.

Currently, athletic scholarships are not taxable to the athlete. Based upon experience with graduate assistants, it is clear that if the stipend is added, at least that portion of the scholarship would constitute taxable income to the athlete.¹⁰⁶ This would also add the burden of withholding for income tax as well as for social security and Medicare. It might further provide fuel for those who advocate the general removal of the tax-exempt status of collegiate athletics. Providing the stipend could have an impact on evaluations of unrelated business income for NCAA member institutions.

IV.  PRACTICAL FINANCIAL CONCERNS AND WHY IT WON’T HAPPEN OVERNIGHT

Assume for the moment that the legal issues raised above do not deter the membership’s consideration of the proposal. There are nonetheless several serious political and practical concerns. The history and culture of the NCAA have for decades revolved around the concept of amateurism and the notion of the “student-athlete.” Athletics are an integral part of the educational experience. Further professionalizing the programs, the argument goes, destroys this concept. The purists argue that any denigration of the amateurism concept is a giant step towards the destruction of intercollegiate athletics. The former president of the association, Joseph Crowley, said, “the day our members decide it’s time to pay players will be the day my institution stops playing.”¹⁰⁷ Even some people who favor increased attention to athletes’ welfare believe that paying athletes is not a good idea.¹⁰⁸

There are, however, some very respected coaches who believe it is time to support the concept of paying stipends to athletes. Tom Osborne of the University of Nebraska has argued for many years that players should be able to receive money for living expenses.¹⁰⁹ … However, even many who conceptually support the proposal acknowledge the enormous practical and financial difficulties presented….

There are sources of revenue or ideas for revenue redistribution which could support the proposal. As noted, the NCAA budget is $239 million for 1996–97.¹¹¹ That figure will go up in the coming years. [Ed. Note: The NCAA budget for 2009–2010 was $710 million.] The bowl games following the 1996 college season paid out over $100 million to participating schools and their conferences.¹¹² Estimates are that licensed products generate over $2 billion annually in sales, providing generous royalties for colleges and universities. Corporate sponsorship agreements with individual schools provide additional funds. The NCAA Basketball Championship generates in excess of $50 million annually for the member schools; and, if the NCAA ever approves a national football championship playoff system, an additional $100 million or more will be available for distribution to the schools. Finally, there are television contracts and gate receipts that add to the revenues of most of the Division I schools.

The other side of the equation begins with the reality that many of the Division I schools lose money on their athletic programs.¹¹³ Even those making money argue they have very little flexibility in their budgets, particularly those with gender equity pressures.¹¹⁴ The proposal as structured above would cost approximately $29 million annually, with the impact as high as $400,000 for Division I-A football schools.¹¹⁵

While there is no doubt that absorbing these costs would be difficult for most schools, there are sources of revenue which could support the proposal. It will require athletic administrators to be creative and to look for ways to cut costs in existing programs without cutting quality and equality. It is arguable that many, if not most, Division I athletic programs have unnecessary extravagance and duplication. It may also be time to suggest to the professional sports leagues that direct subsidies are due their “minor leagues,” the college athletic programs. Corporate sponsors such as McDonald’s or Nike should be considered as potential benefactors of this program. For the present, however, these outside sources are not available in any meaningful way. Therefore, existing funding would have to be utilized to implement the proposal for stipends for athletes.

The cost of the stipend is not the only cost presented. If the athlete is viewed as an employee in a given state for workers’ compensation purposes, the schools may have to purchase insurance coverage. There may also be additional insurance or fringe benefit costs associated with a determination of employee status. If the program begins to look more professional than amateur, there may be tax consequences to the schools with very significant price tags. If athletes had success with either the potential claims under the Sherman Act or those under Title IX, costs would escalate. Then there is the possibility of added leverage through unionization and collective bargaining. This too would have additional costs.

It is difficult to be sympathetic to concerns for the loss of amateurism in collegiate sports as a result of consideration for stipends. When a school makes an estimated $4 million in revenues directly traceable to the participation of one basketball player, concerns over the loss of amateurism are difficult to swallow.¹¹⁶ Intercollegiate athletics revolves around big money. Winning brings more money to programs and, thus, coaches are under pressure to produce. Those who do produce at the Division I level can expect six and seven figure annual incomes. Athletes spend twelve months a year playing, practicing, and training for their particular sport. For approximately eight months per year they are also students. The athletes are primarily responsible for the generation of the revenues used to pay the aforementioned coaches and programs. In return, they receive, relatively speaking, incredibly poor compensation. The days of sports at the collegiate level, at least in Division I programs, being “just a game” are long gone.¹¹⁷ Sports have a way of putting educational institutions on the map. How many people would know of the College of Charleston without basketball?

Finally, it is suggested that amateurism in and of itself is not the reason most fans watch collegiate sports.¹¹⁸ Loyalties to educational institutions and to tradition are very important. Ticket prices for collegiate events are more affordable than for professional events, and a modest stipend for athletes will not alter that situation. Rivalries and the national championships sanctioned by the NCAA are a natural attraction. A retreat from pure amateurism will not detract from this attraction.

More attention must be paid to athletes’ welfare. The relaxation of the work restrictions is well-intentioned, but is misdirected. It is counter to the association’s own concerns over the amount of time the athletes have in a day for sports, school, and life. It throws one more factor into the mix, which is a mistake. There are, of course, natural concerns over athletes having jobs under this rule which pay good wages for little or no work. Policing will be a nightmare.

It is time for collegiate athletes to receive monthly stipends as part of their scholarship package. Even Walter Byers, former longtime Executive Director of the NCAA, now calls for fair treatment of athletes, including relaxation of restrictions on compensation and outside income.¹¹⁹ We are no longer in an age of innocence where there is no commercialism in college athletics. It is big business and those most responsible for the product put on the field, the players, should be compensated.

Notes

1.  C. Peter Goplerud, Stipends for Collegiate Athletes: A Philosophical Spin on a Controversial Proposal, 5 Kan. J.L. & Pub. Pol’y 125, 127 (1996).

2.  See Steve Wulf, Tote That Ball, Lift That Revenue; Why Not Pay College Athletes, Who Put in Long Hours to Fill Stadiums—and Coffers?, Time, Oct. 21, 1996, at 94 (recognizing that the colleges and coaches make money at the athletes’ expense); see also Ray Yasser, Essay: A Comprehensive Blueprint for the Reform of intercollegiate Athletics, 3 Marq. Sports L.J. 123 (1993) (examining the NCAA and proposing reform).

3.  See Jack L. Copeland, Delegates OK Key Athlete-Welfare Legislation, NCAA News, Jan. 20, 1997, at 1.

….

31.  Sherman Act, 15 U.S.C. 1 (1990).

32.  See Standard Oil Co. v. United States, 221 U.S. 1, 56 (1911).

33.  See White Motor Co. v. United States, 372 U.S. 253, 259-260 (1963).

34.  See NCAA v. Board of Regents of the Univ. of Okla., 468 U.S. 85, 119 (1984).

35.  NCAA v. Board of Regents of the Univ. of Okla., 468 U.S. 85, 101 (1984).

36.  See Banks v. NCAA, 977 F.2d 1081, 1086 (7th Cir. 1992); McCormack v. NCAA, 845 F.2d 1338, 1344 (5th Cir. 1988); Law v. NCAA, 902 F. Supp. 1394, 1403 (D. Kan. 1995); Gaines v. NCAA, 746 F. Supp. 738, 746 (M.D. Tenn. 1990).

37.  See Hairston v. Pacific 10 Conference, 101 F.3d 1315, 1319 (9th Cir. 1996).

38.  See id.

39.  See id.

40.  See id.

41.  See, e.g., Banks, 977 F.2d at 1094; McCormack, 845 F.2d at 1345; Justice v. NCAA, 577 F. Supp. 356, 383 (D. Ariz. 1983).

42.  See Board of Regents of the Univ. of Okla., 468 U.S. at 88.

….

57.  Banks v. NCAA, 977 F.2d 1081, 1098 (7th Cir. 1992). (Flaum, J., concurring in part and dissenting in part).

58.  1996–1997 NCAA Manual (1996), at 2.5.

59.  Steve Wulf, Tote That Ball, Lift That Revenue; Why Not Pay College Athletes Who Put in Long Hours to Fill Stadiums and Coffers? Time, Oct. 21, 1996, at 94.

60.  See NCAA Manual, supra note 58, at 12.1.2.

61.  See, e.g., Brian Carnell, Another View: Free the Athletes and Scrap the NCAA, Detroit News, Jan. 23, 1997, at A15 (arguing that the players do most of the work and assume all of the risk, yet are prevented from sharing in the results of their labor); Ron Maly, Hawk-eyes’ Verba: Players Feeling Cheated, Des Moines Reg., Jul. 28, 1996, at Big Peach 4 (describing the financial struggles of scholarship athletes); Michael Costello, Some Cheating: Sharing the Booty with Athletes, Lewiston Morning Trib., Mar. 16, 1996, at A12 (stating that students “grind their bones into dust for next to nothing”).

62.  See generally Goplerud, supra note 1, at 127-128 (discussing workers’ compensation as it would relate to student athletes on a stipend). Much of the following discussion appeared initially in the Kansas article and is used here with permission of the journal.

63.  See generally Richard A. Epstein, The Historical Origins and Economic Structure of Workers’ Compensation Law, 16 Ga. L. Rev. 775 (1982) (commenting upon the central features of the history and of the debate that workers’ compensation law has generated); Ray Yasser, Are Scholarship Athletes At Big-Time Programs Really University Employees?—You Bet They Are!, 9 Black L.J. 66 (1984) (exploring how courts treat the relationship between athletes and educational institutions when the student-athlete is injured and tries to recover against the school under local workers’ compensation laws); Sean Alan Roberts, Comment, College Athletes, Universities, and Workers’ Compensation: Placing the Relationship in the Proper Context by Recognizing Scholarship Athletes as Employees, 35 S. Tex. L. Rev. 1315 (1996) (focusing on the applicability of the Texas workers’ compensation statute to scholarship athletes).

64.  See Arthur Larson, Workers’ Compensation Law: Cases, Materials, and Text 795 (1992).

….

95.  Rensing v. Indiana State Univ. Bd. of Trustees, 444 N.E.2d 1170 (Ind. 1983) at 1172–73.

96.  See generally Alan Roberts, Comment, College Athletes, Universities, and Workers’ Compensation: Placing the Relationship in the Proper Context by Recognizing Scholarship Athletes as Employees, 35 S. Tex. L. Rev. 1315 (1996), at 1341 (noting Texas’ liberal definition of employee on a quid pro quo basis); Ray Yasser, Essay: A Comprehensive Blueprint for the Reform of Intercollegiate Athletics, 3 Marq. Sports L.J. 123 (1993), at 137 (calling an athletic scholarship an oxymoron and comparing it more to a one-year renewable contract).

97.  Today, scholarships are one-year awards. During the typical recruitment process the athlete is promised a four- or five-year scholarship. This is actually delivered on a year-to-year basis and there are some schools or coaches that do not renew scholarships to certain players. This can be done under current rules so long as there is notice and some opportunity to discuss the non-renewal of the scholarship.

98.  See Telephone Interview with Sandy Pruett, Administrative Assistant to the Director of Personnel, University of Oklahoma (Feb. 28, 1996).

99.  See id.

100.  See Cohen v. Brown Univ., 101 F.3d 155, 166-67 (1st Cir. 1996).

101.  29 U.S.C. § 151 (1994).

102.  See id. § 157. It is assumed no one will argue that the NCAA is not engaged in interstate commerce.

103.  See id. § 152.

104.  See generally NLRB v. O’Hare-Midway Limousine Serv., Inc., 924 F.2d 692 (7th Cir. 1991) (holding that whether an individual is an employee is a factual matter focusing on the employer’s ability to control the purported employee and analyzing characteristics of an employer-employee relationship, including how payment for services is determined; whether the employer provides benefits; who provides tools or other materials to perform the work; who designated where the work is done, and whether the relationship is temporary or permanent).

105.  Periodically, there are calls for college athletes to strike over some issue. Indeed, Bob Knight, the legendary Indiana University basketball coach has recently suggested such a move to respond to mistreatment of athletes by the NCAA. See Fish, supra note 56, at E6. Application of the labor laws to athletes receiving a stipend would likely allow the athletes to organize and, under appropriate circumstances, strike.

106.  See 26 U.S.C. § 117 (1994).

107.  Curry Kirkpatrick, The Hoops Are Made of Gold, Newsweek, Apr. 3, 1995, at 62.

108.  See John Eisenberg, NCAA On The Right Track With New Part-Time Job Rule, Baltimore Sun, Jan. 20, 1997, at C1.

109.  See Paying College Athletes a Bad Idea: Scholarship Rules Could Be Fairer, Omaha World Herald, Jan. 18, 1995, at 18.

….

111.  See Fish, supra note 56, at E6.

112.  See id.

113.  See Maly, supra note 61, at Big Peach 4; Ed Graney, Scheduling Changes Hit Aztecs in Pocketbook, San Diego Union-Trib., Oct. 8, 1996, at D1; John Williams, Mounting Defeat Threatens UH Sports Programs, Hous. Chron., June 27, 1996, at A1.

114.  David Nakamura, Equity Leaves Its Mark on Male Athletes; Some Schools Make Cuts to Add Women’s Sports, Wash. Post, Jul. 7, 1997, at A1.

115.  See Bob Hurt, Paying College Athletes Has Major Obstacles, Ariz. Republic, May 5, 1995, at E2.

116.  See W. D. Murray, NCAA’s Top Product Faces Big Challenge—Top Players Leave for More Compensation, Seattle Times, Mar. 30, 1997, at D2.

117.  At least one judge has clearly noticed the change:

The NCAA would have us believe that intercollegiate athletic contests are about spirit, competition, camaraderie, sportsmanship, hard work … and nothing else…. Players play for the fun of it, colleges get a kick out of entertaining the student body and alumni, but the relationship between players and colleges is positively noncommercial…. The NCAA continues to purvey, even in this case, an outmoded image of intercollegiate sports that no longer jibes with reality. The times have changed. College football is a terrific American institution that generates abundant nonpecuniary benefits for players and fans, but it is also a vast commercial venture that yields substantial profits for colleges, … both on and off the field. Banks v. NCAA, 977 F.2d 1081, 1098-99 (7th Cir. 1992) (Flaum, J., concurring in part and dissenting in part).

118.  See generally Mitten, supra note 56 (arguing that limitations on scholarships currently a part of the NCAA rules are violative of antitrust laws). Professor Mitten notes

It is unlikely that the tremendous popularity of intercollegiate sports is a result of the amateur status of college athletes. Other factors seem to be more significant in accounting for the strong national public interest in college sports. For example, alumni pride and loyalty, tradition, long-standing rivalries, national rankings, conference and national championship tournament competition, and exciting play probably contribute to the public obsession with college sports more than the “amateur” status of college athletes.

Id. at 78.

119.  See Walter Byers, Unsportsmanlike Conduct: Exploiting College Athletes (University of Michigan Press 1995).

ADVICE FOR THE NEXT JEREMY BLOOM: AN ELITE ATHLETE’S GUIDE TO NCAA AMATEURISM REGULATIONS

Christopher A. Callanan

INTRODUCTION

Jeremy Bloom presented a unique challenge to the National Collegiate Athletic Association (NCAA) regulations on amateurism because, as a world-class freestyle moguls skier and Division I football player, he was a marketable athlete.¹ By declaring Bloom ineligible to compete as an NCAA football player in the event he accepted the customary financial benefits of professional skiing, the NCAA created myriad issues for similarly situated athletes. Although Bloom was among the first athletes to raise the issue, he will be by no means the last. Emerging nontraditional sports, particularly action sports, attract younger athletes. These sports are aggressively marketed to young audiences through the endorsement of young athletes. Thus, more and more athletes at younger ages receive opportunities to participate in activities that, without careful consideration, can jeopardize present and future athletic eligibility at the scholastic and collegiate level.

As a result of Jeremy Bloom’s case (Bloom v. National Collegiate Athletic Association), individual sport, Olympic, and action sport athletes as well as other talents who also compete (or hope to compete) in scholastic and NCAA sports must exercise particular caution. Given the detail of NCAA Bylaws, it is impossible to cover every scenario or exception here. Instead, the following is intended to introduce athletes and their families to common issues that arise and to suggest strategies for informed decision-making in light of the Bloom decision.

KNOW THE RULES: THEY APPLY SOONER THAN YOU THINK

Any athlete who is or hopes to be eligible to participate in collegiate athletics is bound by the NCAA Bylaws.² Conduct before and during NCAA participation can jeopardize eligibility.³ In addition, each state regulates scholastic eligibility. Most states follow the NCAA Bylaws as they relate to amateurism, so this discussion focuses on NCAA regulation. However, every pre-high school and high school athlete must consider both state regulations and the NCAA Bylaws.

AGENTS AND LAWYERS: WHAT ADVICE IS PERMITTED?

Bylaws 12.1.1(g)⁴ and 12.3⁵ declare an athlete ineligible if he or she enters into an agreement with an agent to market his or her reputation or ability in that sport. An agreement that does not limit itself to a particular sport makes an athlete ineligible in all sports.⁶ An athlete may secure advice from a lawyer concerning a proposed professional sport, contract, so long as the lawyer does not also represent the athlete in negotiations for that contract.⁷

“SALARIED” PROFESSIONAL ATHLETES: PROHIBITIONS AND EXCEPTIONS

Bylaw 12.1.1⁸ characterizes the activities that destroy amateur status required for NCAA eligibility. Using skill in a sport for pay (12.1.1.(a)), accepting a promise of pay (12.1.1.(b)), signing a professional contract (12.1.1.(c)), and agreeing with an agent (12.1.1.(g)), are among the activities that destroy athletic eligibility. A specific exception to this rule permits many athletes to play minor league baseball while retaining eligibility to play college football.⁹ Several well-known athletes have used this exception to their advantage, such as Chris Weinke, Cedric Benson, Drew Henson, and Ricky Williams. Bylaw 12.1.2 permits a professional athlete in one sport to retain eligibility in another sport.¹⁰ However, the athlete cannot receive financial aid in the eligible sport if he or she is still involved with professional athletics, receives any pay from any professional sports organization, or has any active contractual relationship.¹¹

NAVIGATING THE MURKY WATERS OF ENDORSEMENT AND PROMOTIONAL INCOME: JEREMY BLOOM’S CHALLENGE TO THE NCAA

Jeremy Bloom argues that the 12.1.2 exception for “professional athletes in another sport” should permit him to accept the customary income for professional skiing—product endorsements and marketing activities—without jeopardizing his eligibility to play NCAA Division I football.¹² Bloom compared the salary paid to a minor league baseball player to the endorsement and marketing income customarily earned by a professional skier.¹³ Both are customary forms of payment in the respective professional sports. In rejecting his claim, the NCAA cited two regulations dealing with commercial activity to distinguish permissible salary income from prohibited marketing income.

Bylaw 12.5.2.1(a) prohibits a college athlete, subsequent to enrollment from accepting pay for or permitting the use of his or her name or picture “to advertise, recommend or promote directly the sale or use of a commercial product.”¹⁴ Bylaw 12.5.2.1(b) prohibits receiving pay for endorsing a commercial product or service through the athlete’s use of the product or service.¹⁵ These bylaws prohibit any college athlete from endorsing a product or service by using the product or service or lending the athletes’ name, image, or likeness to promote the product or service.¹⁶

Bylaw 12.4.1.1, the “Athletics Reputation” rule¹⁷ prohibits a student-athlete from receiving compensation from anyone (not just an advertiser or marketer) in exchange for the value that the student-athlete provides to the employer for the athlete’s “publicity, reputation, fame or personal following” obtained because of athletic ability.¹⁸ This rule prohibits commercial activity by a student-athlete even if it does no[t] involve promotion, endorsement, or product use, but exists in part as a result of the athlete’s goodwill as an NCAA athlete.

Through these bylaws, the NCAA distinguishes salary income in a sport like baseball or football from endorsement, promotional, or reputation income.¹⁹ In deciding the Bloom case, the Colorado Court of Appeals noted that the NCAA Bylaws consistently prohibit student-athletes from engaging in any form of paid endorsement or media activity.²⁰ The court enforced the bylaws as written because, despite their disproportionate impact on athletes of different sports, the Bylaws are unambiguous and consistent in prohibiting any form of commercial activity by any athlete.²¹

The Bloom decision suggests that the NCAA and courts asked to interpret NCAA Bylaws will continue to strictly interpret amateurism regulations to forbid marketing, endorsement, or media-related income (or activity) by student-athletes regardless of the circumstance. The continued prevalence of endorsement and media activity in popular culture is unlikely to generate change in the NCAA system. It will only increase the number of athletes who knowingly or inadvertently face the consequences of strictly interpreted bylaws.

One practical difficulty in likening endorsement income to salary income is that it is impossible to determine the degree to which an athlete’s marketability derives from his or her simultaneous status as an NCAA athlete. In his case, Bloom could not show that none of his marketability resulted from his Colorado football career. As a result, he was unable to convince the court that his proposed activity complied with otherwise unambiguous bylaws prohibiting any kind of commercial activity by student-athletes.

Even if the NCAA could measure the source of an athlete’s marketability or if it decided to undertake the effort to distinguish permissible kinds of income to be fairer to skiers and other similar athletes, it has no financial incentive to do so. Allowing student-athletes to accept paid endorsement or media income provides marketers an alternative (and likely cheaper) way to associate with the goodwill of college sports. Given the present system’s great financial reward to the NCAA and its institutions, neither is likely to voluntarily change the present system. These realities create great risk for athletes who participate in sports (or other similar activities) where endorsement and media income are customary.

BEWARE THE BREADTH OF COMMERCIAL ACTIVITY

Aaron Adair’s story demonstrates the breadth of commercial activity as interpreted by the NCAA.²² Adair was a Texas high school baseball star and highly touted professional prospect when he was diagnosed with brain cancer.²³ After a successful treatment, rehabilitation and arduous comeback, Adair worked his way back to competitive baseball.²⁴ He ultimately accepted a scholarship to play Division I baseball at the University of Oklahoma.²⁵ While he was in college, Adair lost his father to leukemia.²⁶ Adair authored a book, You Don’t Know Where I’ve Been, chronicling his own struggle to overcome cancer and to deal with the loss of his father.²⁷ While promoting the book throughout Texas and Oklahoma, the University, through its NCAA compliance officer, informed Adair that he was engaging in prohibited commercial activity—the promotion and sale of his book.²⁸ Adair’s book ended his NCAA eligibility and baseball career.

Athletes involved in the performing arts must also be vigilant. Many of the arguments raised by Jeremy Bloom were originally made by Northwestern University football player Darnell Autry. Autry successfully overcame the NCAA’s objection to his participation in a feature film, The Thirteenth Angel.²⁹ Autry, a theatre major, obtained an injunction permitting him to act by showing that the opportunity was relevant to his studies and anticipated career, did not result from or relate to his athletic reputation, and would not result in payment beyond expense reimbursement.³⁰ Addressing similar issues, bylaw 12.5.1.3 permits an athlete to continue modeling activities unrelated to athletic activity that the athlete participated in prior to enrollment under specific conditions.³¹ Similar issues have arisen with athletes who publish local restaurant reviews and participate in music videos. Although each circumstance is different, the degree to which each opportunity relates to athletic ability or to one’s student-athlete status is always an important factor in determining permissibility. As athletes continue to participate in various activities that generate commercial and media attention, challenges to traditional definitions of amateurism will continue.

….

Notes

1.  Bloom v. NCAA, 93 P.3d 621 (Colo. Ct. App. 2004). For instructive discussion of the Bloom litigation and controversy, see Christian Dennie, Amateurism Stifles a Student-Athlete’s Dream, 12 SPORTS LAW. J. 221 (2005); Alain Lapter, Bloom v. NCAA: A Procedural Due Process Analysis and the Need for Reform, 12 SPORTS LAW. J. 255 (2005); Gordon E. Gouveia, Making a Mountain Out of a Mogul: Jeremy Bloom v. NCAA and Unjustified Denial of Compensation Under NCAA Amateurism Rules, 6 VAND. J. ENT. L. & PRAC. 22 (2003).

2.  NCAA BYLAWS, reprinted in NAT’L COLLEGIATE ATHLETIC ASS’N, 2005-2006 NCAA DIVISION I MANUAL (2005), available at http://www.ncaa.org/library/membership/division_i_manual/2005-06/2005-06_d1_manual.pdf [hereinafter NCAA MANUAL].

3.  “Amateurism” states that: “A student-athlete shall not be eligible for participation in an intercollegiate sport if the individual takes or has taken pay, or has accepted the promise of pay in any form, for participation in that sport or if the individual has violated any of the other regulations related to amateurism set forth in Bylaw 12.” Id. § 14.01.3.1 (emphasis added). Bylaw 12.01.3 states that “NCAA amateur status may be lost as a result of activities prior to enrollment in college.” Id. § 12.01.3.

4.  Id. § 12.1.1(g).

5.  Id. § 12.3.

6.  Id. § 12.3.1.

7.  Id. § 12.3.2.

8.  Id. § 12.1.1.

9.  Id. § 12.1.2.

10.  Id.

11.  Id.

12.  Bloom v. NCAA, 93 P.3d 621, 625 (Colo. Ct. App. 2004).

13.  Id. at 625.

14.  NCAA BYLAWS § 12.5.2.1(a), reprinted in NCAA MANUAL, supra note 2.

15.  Id. § 12.5.2.1(b).

16.  Id.

17.  Id. § 12.4.1.1.

18.  Id.

19.  Bloom v. NCAA, 93 P.3d 621, 625-26 (Colo. Ct. App. 2004).

20.  Id. at 626.

21.  Id.

22.  See Aaron Adair Website, http://www.aaronadair.com (last visited Apr. 23, 2006) (providing an account of Mr. Adair’s story); see also Dennie, supra note 1.

23.  Aaron Adair Website, supra note 22.

24.  Id.

25.  Id.

26.  Id.

27.  Id.; see also AARON ADAIR, YOU DON’T KNOW WHERE I’VE BEEN (2003); Description and Reviews of You Don’t Know Where I’ve Been, http://www.amazon.com/gp/product/1553955145/qid=1145890634/sr=1-1/ref=sr_1_1/103-2448975-0787006?s=books&v=glance&n=283155 (last visited May 10, 2006).

28.  Dennie, supra note 1, at 236-37.

29.  Description of The Thirteenth Angel, http://www.imdb.com/title/tt0119055/ (last visited May 10, 2006).

30.  Dennie, supra note 1, at 233.

31.  NCAA BYLAWS § 12.5.1.3, reprinted in NCAA MANUAL, supra note 2.

THE GAME OF LIFE

James L. Shulman and William G. Bowen

KEY EMPIRICAL FINDINGS

… We have used the extensive institutional records of the 30 academically selective institutions in the study to learn about the pre-collegiate preparation of athletes and other students in the 1951, 1976, and 1989 entering cohorts and their subsequent performance in college. We have also followed the approach suggested more than a century ago by the Walter Camp Commission on College Football and analyzed the experiences and views of both former athletes and other students who attended these schools. In seeking to move the debate over intercollegiate athletics beyond highly charged assertions and strongly held opinions, we use this chapter to summarize the principal empirical findings that we believe deserve the attention of all those who share an interest in understanding what has been happening over the course of the past half century.

….

Scale: Numbers of Athletes and Athletic Recruitment

Admissions Advantages, Academic Qualifications, and Other “Selection” Effects

Graduation Rates, Underperformance in the Classroom, and Choice of Major

Advanced Degrees, Careers, and Earnings

Leadership

Giving Back to the College or University

The Financial Equation: Costs and Revenues Associated with Intercollegiate Sports

A CALL TO ACTION: RECONNECTING COLLEGE SPORTS AND HIGHER EDUCATION

Report of the Knight Foundation Commission on Intercollegiate Athletics

FOREWORD

In 1989, as a decade of highly visible scandals in college sports drew to a close, the trustees of the John S. and James L. Knight Foundation were concerned that athletics abuses threatened the very integrity of higher education. In October of that year, they created a Commission on Intercollegiate Athletics and directed it to propose a reform agenda for college sports.

In announcing this action, James L. Knight, then chairman of the Foundation, emphasized that it did not reflect any hostility toward college athletics…. “Our interest is not to abolish that role but to preserve it by putting it back in perspective….”

To understand their concern and the subsequent work of the Commission, it is necessary to look back on the extent to which corruption had engulfed big-time college sports in the 1980s.

In a cover story shortly before the Commission was created, Time magazine described the problem as “… an obsession with winning and moneymaking that is pervading the noblest ideals of both sports and education in America.” Its victims, Time went on to say, were not just athletes who found the promise of an education a sham but “the colleges and universities that participate in an educational travesty—a farce that devalues every degree and denigrates the mission of higher education.”

Here are some broad outlines of the problems the Commission saw then:

At times it seemed that hardly a day passed without another story about recruiting violations …, under-the-table payoffs … [or] players who didn’t go to classes or who took courses that would never lead to a meaningful degree. Even crime sprees at some athletic powerhouses were added to the list.

It was small wonder that eight out of 10 Americans questioned in a Louis Harris poll in 1989 agreed that intercollegiate sports had spun out of control. They agreed that athletics programs were being corrupted by big money, and felt that the many cases of serious rules violations had undermined the traditional role of universities as places where young people learn ethics and integrity.

A 1989 series in the New York Times raised another warning flag:

Somehow, the Knight Foundation concluded, sanity had to be restored to this bleak scene and the values of higher education put above all else in the world of intercollegiate athletics.

….

The Commission laid out an analysis of the problems facing college sports and proposed a “new model for intercollegiate athletics.” This analysis was straightforward: Following decades of presidential neglect and institutional indifference, big-time college sports were “out of control.” The reform agenda Commission members proposed was equally straightforward, the “one-plus-three” model—presidential control directed toward academic integrity, financial integrity, and independent certification.

No claim was made that their recommendations would solve all the problems tarnishing college sports, or even that all problems would ever be solved to everyone’s satisfaction. “Reform is not a destination but a never-ending process,” said the Commission’s last report.

….

The report that follows presents the Commission’s findings from a series of meetings in 2000 and 2001 with NCAA representatives, university presidents, a trustee board chair, faculty, conference commissioners, athletics directors, coaches, athletes, authors, professional sports executives, television officials, a sports apparel representative, a gambling lobbyist, leaders of national higher education associations, and a U.S. senator.

After assessing those hearings, the Commission concludes with some satisfaction that the NCAA has moved a long way toward achieving the goals laid out in the Commission’s earlier reports…. Many reform efforts have been undertaken over the last decade with sincerity and energy. We reiterate our strong conviction that college sports, when properly conducted, are worth saving. Sports at all levels have been a source of immense satisfaction, self-discipline, and achievement for tens of thousands of young men and women.

….

TEN YEARS LATER

It is tempting to turn away from bad news. To the cynic, corruption has been endemic in big-time sports as long as they have existed. To the rationalizer, reform is already under way and things are not nearly as bad as the critics make them out to be. More time is all that is needed. But to the realist, the bad news is hard to miss. The truth is manifested regularly in a cascade of scandalous acts that, against a backdrop of institutional complicity and capitulation, threaten the health of American higher education. The good name of the nation’s academic enterprise is even more threatened today than it was when the Knight Commission published its first report a decade ago. Despite progress in some areas, new problems have arisen, and the condition of big-time college sports has deteriorated.

Consider as an example some simple statistics: As noted in the foreword, 57 out of 106 Division I-A institutions (54 percent) had to be censured, sanctioned, or put on probation for major violations of NCAA rules in the 1980s. In the 1990s, 58 out of 114 Division I-A colleges and universities (52 percent) were similarly penalized. In other words, more than half the institutions competing at the top levels continue to break the rules. Wrongdoing as a way of life seems to represent the status quo.

The fact that such behavior has worked its way into the fiber of intercollegiate sports without provoking powerful and sustained countermeasures from the many institutions so besmirched speaks for itself. It appears that more energy goes into looking the other way than to finding a way to integrate big-time sports into the fabric of higher education.

At the heart of these problems is a profound change in the American culture of sports itself. At one time, that culture was defined by colleges, high schools, summer leagues, and countless community recreational programs. Amateurism was a cherished ideal. In such a context, it made sense to regard athletics as an educational undertaking. Young people were taught values ranging from fitness, cooperation, team-work, and perseverance to sportsmanship as moral endeavor.

All of that seems somehow archaic and quaint today. Under the influence of television and the mass media, the ethos of athletics is now professional. The apex of sporting endeavor is defined by professional sports. This fundamental shift now permeates many campuses. Big-time college basketball and football have a professional look and feel—in their arenas and stadiums, their luxury boxes and financing, their uniforms and coaching staffs, and their marketing and administrative structures. In fact, big-time programs have become minor leagues in their own right, increasingly taken into account as part of the professional athletics system.

In this new circumstance, what is the relationship between sport and the university as a place of learning?

At the time the Knight Commission was formed in 1989, the answers to that question were already sounding alarm bells. For example, the late A. Bartlett Giamatti, a former president of Yale who went on to become commissioner of major league baseball, said that “failures of nerve, principle and purpose” were threatening to “engulf higher education in ways unfair and dangerous.” He argued that what had been “allowed to become a circus—college sports—threatens to become the means whereby the public believes the whole enterprise is a sideshow.”

Now, in this new millennium, informed critics are equally scathing in their evaluations. James Duderstadt, president emeritus of the University of Michigan, put it this way before the Knight Commission in late 2000: Major college sports “do far more damage to the university, to its students and faculty, its leadership, its reputation and credibility than most realize—or at least are willing to admit.” The ugly disciplinary incidents, outrageous academic fraud, dismal graduation rates, and uncontrolled expenditures surrounding college sports reflect what Duderstadt and others have rightly characterized as “an entertainment industry” that is not only the antithesis of academic values but is “corrosive and corruptive to the academic enterprise.”

….

The most glaring elements of the problems outlined in this report—academic transgressions, a financial arms race, and commercialization—are all evidence of the widening chasm between higher education’s ideals and big-time college sports.

Academics

When the accretions of centuries of tradition and the bells and whistles of the modern university have been stripped away, what remains is the university’s essential mission as an institution for teaching, learning, and the generation of new knowledge. This is the mission that big-time college sports often mock and, in some cases, deliberately undermine.

Big-time athletics departments seem to operate with little interest in scholastic matters beyond the narrow issue of individual eligibility. They act as though the athletes’ academic performance is of little moment. The historic and vital link between playing field and classroom is all but severed in many institutions. Graduation rates for athletes in football and basketball at the top level remain dismally low—and in some notable cases are falling. While the Commission recognizes that graduation rates for athletes subject to the NCAA’s more stringent eligibility standards effective in the mid-1990s are not yet available, we cannot ignore these facts: The graduation rate for football players in Division I-A fell 3 percent last year and 8 percent in the last five years. The rate for men’s basketball players at Division I-A institutions remained stable over the last year, but fell 5 percent over the last five years.

Graduation rates for both were already abysmal. The most recent NCAA graduation rate report reveals that 48 percent of Division I-A football players and 34 percent of men’s basketball players at Division I-A institutions earned degrees. The graduation rate for white football players was 55 percent, the lowest since the Student Right to Know Act mandated that such records be made public. Only 42 percent of black football players in Division I-A graduate, according to the most recent figures.

Derrick Z. Jackson, a columnist for the Boston Globe, analyzed the graduation rates of African-American players on the 64 teams in the 2001 NCAA men’s basketball tournament. He reports these shameful figures from the latest NCAA graduation rate report: Twenty-six of the 64 teams graduated fewer than 35 percent of their African-American players. Seven teams had African-American graduation rates of zero. Furthermore, he writes, “Of the 64 teams, a school was nearly twice as likely to have suffered a decline in its African-American player graduation rate since the mid-1990s than enjoy an increase. The rate in the 2000 NCAA graduation rate report was lower for 35 schools than the rate in the 1996 report. It was higher for only 19 schools.”

An academic official at a Division I-A institution told Jackson in regard to the 10 percent graduation rate of its men’s basketball team, “We have not in the past had the same high expectations of athletes in academics and not held them to as high a standard in the classroom.”

In the face of these facts, many defend the overall graduation rates of Division I-A football and basketball players because in some instances they compare favorably to those of the student body as a whole. The Commission is unimpressed with this comparison of apples and oranges. The fact is that the rest of the student body does not have the advantage of full scholarships and the often extensive academic support services extended to athletes. Data from the U.S. Department of Education indicate that approximately 75 percent of high school graduates who enroll full-time in college immediately after graduation (and continue full-time in the same institution) will receive a bachelor’s degree within five and a half years. This group of young full-time students is the appropriate comparison for Division I-A athletes.

Athletes are often admitted to institutions where they do not have a reasonable chance to graduate. They are athlete-students, brought into the collegiate mix more as performers than aspiring undergraduates. Their ambiguous academic credentials lead to chronic classroom failures or chronic cover-ups of their academic deficiencies. As soon as they arrive on campus, they are immersed in the demands of their sports. Flagrant violation of the NCAA’s rule restricting the time athletes must spend on their sport to 20 hours a week is openly acknowledged. The loophole most used is that of so-called “voluntary” workouts that don’t count toward the time limit. In light of these circumstances, academic failure, far from being a surprise, is almost inevitable.

Sadly though, it comes as a rude surprise to many athletes yearning for a professional sports career to learn that the odds against success are astronomically high. Approximately 1 percent of NCAA men’s basketball players and 2 percent of NCAA football players are drafted by NBA or NFL teams—and just being drafted is no assurance of a successful professional career. “Student-athletes” whose sole and now failed objective was to make the pros suddenly find themselves in a world that demands skills their universities did not require them to learn.

The academic support and tutoring athletes receive is too often designed solely to keep them eligible, rather than guide them toward a degree. The instances of tutors or other counselors bending and breaking rules on athletes’ behalf is a well-publicized scandal. NCAA case books clearly reveal multiple infractions stemming from “tutoring” involving completing athletes’ assignments, writing their papers, and pressuring professors for higher grades. Beyond the breaking of the rules is the breaking of the universities’ implicit covenant with all students, athletes included, to educate them. Despite new NCAA satisfactory progress requirements effective in the mid-1990s, press and NCAA reports repeatedly document instances of athletes being diverted into courses that provide no basis for meaningful degrees. A faculty member at a Division I-A institution who has recently spoken out against the transgressions she has witnessed on her campus said, “There are students on our football team this year [2000] who will graduate when both faculty and students know they cannot read or write.”

The Arms Race

NCAA President Cedric Dempsey, along with many others, has been outspoken about what he calls an ever-growing “arms race” of spending and building to reach impractical financial goals. There is evidence to support these concerns. The NCAA’s latest study of revenues and expenses at Divisions I and II institutions shows that just about 15 percent operate their athletics programs in the black. And deficits are growing every year.

“Clearly, the rising revenues on most campuses have been overwhelmed by even higher costs,” Dempsey told the NCAA convention this year. “At the more than 970 NCAA member schools, we are bringing in just over $3 billion a year, but we’re spending $4.1 billion in that same period.”

A frantic, money-oriented modus operandi that defies responsibility dominates the structure of big-time football and basketball. The vast majority of these schools don’t profit from their athletics programs: At over half the schools competing at the NCAA’s Division I-A level in 1999, expenses exceeded revenues by an average of $3.3 million, an increase of 18 percent over the previous two years. On the other hand, for the 48 Division I-A institutions where revenues exceeded expenses, the average “profit” more than doubled, increasing 124 percent from $1.7 million to $3.8 million from 1997 to 1999. In considering all these data, moreover, it must be understood that they do not take into consideration the full costs of athletics programs, in that the reported expenses do not include capital expenditures, debt service, and many indirect program costs. Nevertheless, competitive balance is crumbling as the gap between the haves and the have-nots widens. While a relative few programs flourish, many others have chosen to discontinue sports other than football or basketball to make ends meet. Even some of the “haves” react to intense financial pressure to control costs by dropping so-called minor sports.

Too much in major college sports is geared to accommodating excess. Too many athletic directors and conference commissioners serve principally as money managers, ever alert to maximizing revenues. And too many have looked to their stadiums and arenas to generate more money. In the last seven years, capital expenditures at Division I-A institutions (e.g., construction or remodeling of athletics facilities, capital equipment, etc.) increased 250 percent. From east to west, north to south, the test becomes who can build the biggest stadiums, the most luxurious skyboxes. Every one of the 12 schools in one major conference has built a new football stadium or refurbished its old one in recent years. All seem to have assumed they could not afford to do otherwise. The building boom in college sports facilities now under way across the nation will cost well over $4 billion, with the resulting debt stretching far into the future.

The arms race isn’t entered into by NCAA fiat. Institutions, not the NCAA, decide what’s best for themselves, and for many that means joining the arms race. Presidents and trustees accept their athletics department’s argument that they have to keep up with the competition. When one school has a $50 million athletic budget and another gets along on $9 million, how can there be any pretense of competitive parity? And what about on-campus parity? A five-part series, “The Price of Winning,” published by the Philadelphia Inquirer in fall 2000 revealed average annual costs as high as nearly $90,000 per athlete at one Division I-A institution. At some Division I-A schools, annual costs per football player are well over $100,000. How can such expenses be justified when the average salary of fully tenured professors at U.S. public research universities barely exceeds $84,000? And what does higher education sacrifice when a school names its football stadium after a pizza chain or its new stadium club after any other commercial product or corporation? To what purpose, indeed, are luxury skyboxes built? Not to satisfy any legitimate institutional need; certainly not to accommodate more students, in whose name and for whose benefit collegiate sports were originally introduced. The central goal is to garner greater fiscal windfalls from wealthy boosters and alumni willing to spend thousands of dollars to acquire not only luxury boxes but choice seating throughout the stadium, while students are often relegated to the end zone if they can get tickets at all. Interestingly, repeated studies indicate that most contributions to colleges and universities come from those to whom athletic records have little import. Big athletic boosters, conversely, are far less likely to support other aspects of the universities’ life and mission, again according to these studies.

There is a tangible downside to this arms race for most schools, that is, for the majority whose big-time programs are less successful and cannot pay for themselves. They must siphon funds from general revenue to try to keep up with the Joneses. Pursuit of success in this context jeopardizes not only the universities’ moral heritage but also their financial security.

A glaring symptom of the arms race run amok is the salaries of so-called “star” coaches. At last count, some 30 college football and men’s basketball coaches are paid a million dollars or more a year. A few are nearing twice that, or are already there. The irony is not lost on the critics. A college provost points out that his school spent more money hiring the head football coach than it did hiring five department heads—combined. A trustee laments that his university signed the basketball coach to a salary three times greater than its president’s. Many players join the complaining chorus when they compare their scholarships to their coaches’ salaries, and when their coaches break contracts and jump from team to team—just as their professional counterparts do. Some dissatisfied players have begun to organize in an attempt to increase their clout and have aligned with the United Steelworkers of America for help in doing so.

But coaches have quite a different perspective. They consider the pressures put on their teams’ performance when football and basketball revenues are expected to produce the lion’s share of the athletic department’s budget. They weigh the dismissal rate of those in their ranks who do not win—or do not win soon enough, or big enough—in a win-at-any-cost environment. And they conclude that their salaries are justified.

The logical question for academia emerges: Is there any other department at a university where so much money is spent and justified primarily by reference to the nonacademic performance of its students, staff, or instructors? That is the crux of the matter. Coaches’ salaries, like numerous athletics department expenditures, are considered as though they have nothing to do with the traditions and principles of the universities in which they are housed. This lack of academic connection is the fundamental corruption of the original rationale for both sports and coaches on campus: that they are integral components of a well-rounded student life and a useful complement to the universities’ other central pursuits. What we have now is a separate culture of performers and trainers, there to provide bread and circuses but otherwise unconnected to the institution that supports them.

Commercialization

Over the last decade, the commercialization of college sports has burgeoned. Vastly larger television deals and shoe contracts have been signed, and more and more space in stadiums and arenas has been sold to advertisers. In too many respects, big-time college sports today more closely resemble the commercialized model appropriate to professional sports than they do the academic model. The NCAA’s Dempsey warned the NCAA membership recently that “the level of cynicism over the commercialization of our most visible athletics programs has reached epidemic proportions.”

Beginning in 2002, CBS will pay the NCAA $6.2 billion over an 11-year period for broadcast rights primarily for its Division I men’s basketball tournament. Television accounts for nearly 80 percent of the NCAA’s revenue. When all sources of revenues are accounted for, the Division I men’s basketball tournament alone generates well over 90 percent of the NCAA’s operating budget…..

With the money comes manipulation. Schools and conferences prostrate themselves to win and get on television. There is a rush now to approve cable and television requests for football and basketball games on weekday evenings, on Sundays, in the morning, and late at night. So much for classroom commitments. On the field, the essential rhythms of the games are sacrificed as play is routinely interrupted for television commercials, including those pushing the alcoholic beverages that contribute to the binge drinking that mars campus life.

Arguments that higher education should be above this commercial fray largely go unheeded, but concern is growing over the economic realities. The television money, when parceled around, never seems to be enough, and the benefits are never evenly distributed. The rich—that is, the schools more in demand by network schedule-makers—get richer, the poor go deeper into debt. Disparities have widened to the point where many underfunded programs trying to compete at the top level are perpetual losers, both on and off the field.

The winners are primarily those institutions that belong to the founding conferences in the Bowl Championship Series (BCS), namely, the Atlantic Coast Conference (ACC), the Big East, the Big Ten, the Big 12, the Pacific-10, and the Southeastern Conference (SEC). The BCS is a consortium originally designed and instituted in the early 1990s by conference commissioners to control Division I-A postseason football. The NCAA has no role in the BCS, and even presidents of BCS member institutions are marginalized: for negotiation of BCS television contracts, for example, only conference commissioners and representatives of the television network are at the table, with bowl representatives brought in for the revenue distribution discussions that follow. A small group of conference commissioners controls distribution of all Division I-A postseason football revenues. Conference commissioners are rewarded for successfully generating postseason revenues and so have little incentive to consider other priorities. In allowing commercial interests to prevail over academic concerns and traditions, presidents have abdicated their responsibilities.

Meanwhile, equipment manufacturers inundate prominent coaches and universities with goods and money in exchange for exposure—advertisements of all kinds on campuses, stadiums, and field houses, and logos on uniforms, shoes, and every other conceivable piece of equipment.

There is a clear and sharp message in such deals: This is business; show us the money. Over the last decade, the amounts of money involved have grown tremendously. The University of Michigan’s latest contract with Nike, for example, doubled its cash payments from the shoe and apparel company to $1.2 million a year. With royalties, uniforms, and equipment added to that, the seven-year deal is expected to be worth $25 million to $28 million.

The sellout has made at least one longtime manufacturer’s representative openly disdainful. He told the presidents on the Commission that they and their counterparts had “sold their souls” to him in the 1970s when he came bearing gifts, and it was their lack of courage to make changes in the interim that put them so deeply into the morass.

The influence of sneaker companies is now pervasive in high school sports as well, both in schools and in summer basketball leagues. These companies have become part of the college recruiting process in many instances, and contribute to the special treatment of athletes from a young age. This special treatment raises players’ expectations, shields them from the consequences of their own actions, and teaches them that the rules applied to everyone else don’t necessarily apply to them. It exploits athletes as they are eased through high school and college, finishing their years in school with no semblance of the education needed to negotiate life when their playing days are over.

High school sports today can reflect the worst of their collegiate counterparts. In addition to commercial influences, recruitment and transfer of high school players is far too common, leading to disjointed academic experiences and absurdly dominant teams in some communities. Academic compromises are made for high school athletes as well, leaving them with a diploma but ill prepared for college-level work. And throughout high school sports, as throughout colleges and universities, the young athletes’ ultimate goal has increasingly become a successful career at the professional level, with all the single-minded focus that requires.

College sports as an enterprise with vested commercial interests contradicts the NCAA’s stated purpose: to maintain intercollegiate athletics “as an integral part of the educational program, and the athlete as an integral part of the student body, [and to] retain a clear line of demarcation between intercollegiate athletics and professional sports.” The more that line is crossed, the more likely government intervention in the form of IRS challenges to the institutions’ tax-exempt status becomes….

The NCAA Manual also says that postseason play is meant to be controlled to “prevent unjustified intrusions on the time student-athletes devote to their academic programs, and to protect [them] from exploitation by professional and commercial enterprises.” Yet the number of postseason bowl games has grown from 18 to 25 over the past 10 years, and the men’s Division I basketball tournament is three weeks long. Seasons now extend from August until January for football, and from October to April—nearly six months—for basketball.

Sports as big business is suitable for the marketplace and has proved to be a profitable way to tap into the national psyche. Sports as big business for colleges and universities, however, is in direct conflict with nearly every value that should matter for higher education. In the year 2001, the big business of big-time sports all but swamps those values, making a mockery of those professing to uphold them.

A CALL TO ACTION

….

The Commission has pursued this work over the years because it believes the nation’s best purposes are served when colleges and universities are strong centers of creative, constant renewal, true to their basic academic purposes. In the opening years of the new century, however, those basic purposes are threatened by the imbalance between athletic imperatives and the academy’s values. To say it again, the cultural sea change is now complete. Big-time college football and basketball have been thoroughly professionalized and commercialized.

Nevertheless, the Commission believes that the academic enterprise can still redeem itself and its athletic adjunct. It is still possible that all college sports can be reintegrated into the moral and institutional culture of the university. Indeed, in sports other than football and basketball, for the most part that culture still prevails. Athletes can be (and are) honestly recruited. They can be (and are) true “student-athletes,” provided with the educational opportunities for which the university exists. The joys of sport can still be honorably celebrated.

But the pressures that have corrupted too many major athletic programs are moving with inexorable force. If current trends continue, more and more campus programs will increasingly mirror the world of professional, market-driven athletics. What that could look like across the board is now present in high-profile form: weakened academic and amateurism standards, millionaire coaches and rampant commercialism, all combined increasingly with deplorable sportsmanship and misconduct.

Even if the larger picture is not yet fully that bleak, the trend is going in entirely the wrong direction. As it accelerates, so too does the danger that the NCAA might divide—with the major programs forming a new association to do business in very much the same way as the professional sports entertainment industry.

Perhaps 40 to 60 universities (mostly those with large public subsidies) could and might indefinitely operate such frankly commercial athletic programs. Critics might say good riddance. But the academic and moral consequences implicit in such an enterprise are unacceptable to anyone who cares about higher education in this nation.

Such a division must not be allowed to happen. It is time to make a larger truth evident to those who want bigger programs, more games, more exposure, and more dollars. It is this: Most Americans believe the nation’s colleges and universities are about teaching, learning, and research, not about winning and losing. Most pay only passing attention to athletic success or failure. And many big donors pay no attention at all to sports, recognizing in Bart Giamatti’s words that it is a “sideshow.”

Part of this larger truth requires understanding something that sports-crazed fans are inclined to ignore or denigrate: Loss of academic integrity in the arenas and stadiums of the nation’s colleges and universities is far more destructive to their reputations than a dozen losing seasons could ever be.

Time has demonstrated that the NCAA, even under presidential control, cannot independently do what needs to be done. Its dual mission of keeping sports clean while generating millions of dollars in broadcasting revenue for member institutions creates a near-irreconcilable conflict. Beyond that, as President Cedric Dempsey has said, the NCAA has “regulated itself into paralysis.”

The Need to Act Together

The plain truth is that one clear and convincing message needs to be sent to every member of the academic community: What is needed today is not more rules from above, but instead a concerted grassroots effort by the broader academic community—in concert with trustees, administrators, and faculty—to restore the balance of athletics and academics on campus.

But a grassroots effort cannot be expected to flourish campus by campus. As long as there is an athletics arms race, unilateral disarmament on the part of one institution would most assuredly be punished swiftly by loss of position and increased vulnerability. Change will come, sanity will be restored, only when the higher education community comes together to meet collectively the challenges its members face.

Presidents and trustees must work in harness—not wage the battles so commonplace today over control of the athletic enterprise. Presidents cannot act on an issue as emotional and highly visible as athletics without the unwavering public support of their boards. As John Walda, president of the Indiana University board of trustees, told the Commission in early 2001:

National higher education associations such as the American Council on Education (ACE) and the Association of Governing Boards of Universities and Colleges (AGB), in particular, can and should do more to help resolve the persistent problems addressed in this report. Intercollegiate athletics should loom larger in their programming priorities. New and creative programs and services should be offered directly to institutions and their governing boards through joint collaboration among these associations.

Conferences and the NCAA must work together as well. Tensions between conference commissioners and the NCAA must be resolved so that the best interests of intercollegiate athletics and higher education prevail. Power struggles for control of big-time football, revenue distribution, and other matters reflect a culture dominated by competitive rather than academic concerns, and one that often ignores the welfare of the athletes representing their institutions.

Faculty, too, have a critical role to play. Above all, they must defend the academic values of their institutions. Too few faculty speak out on their campus or fight aggressively against meaningless courses or degrees specifically designed to keep athletes eligible, suggesting they have surrendered their role as defenders of academic integrity in the classroom. Further, the academy has capitulated on its responsibility and allowed commercial interests—television, shoe companies, corporate sponsors of all sorts—to dictate the terms under which college sports operate. No academic institution would allow television to arrange its class schedule; neither should television control college athletic schedules. There are scattered signs of faculty awakening, but on many campuses, faculty indifference prevails even when informed critics make their case.

Athletics directors and coaches bear a huge responsibility. Directors of athletics steer the enterprise for their institutions and, in that regard, are in the best position to monitor its direction and raise flags and questions when it heads off course. Coaches are closest to the athletes and have the most influence on the quality of their collegiate experiences. Clearly, pressures on athletics directors and coaches to generate revenues and win at all costs must be mitigated. In turn, athletics directors must see to it that athletics programs are conducted as legitimate and respected components of their institutions. And coaches, quite simply, need to be held more accountable for what goes on around them. They set the tone. “When the cheating starts,” the legendary Bear Bryant used to say, “look to the head coach. He’s the chairman of the board.”

Alumni pressure to escalate athletics programs and produce winning teams distorts and ultimately compromises the values of the institutions they claim to cherish. Alumni must offer strong and visible support to the president and trustees of their alma mater as they work to balance athletics and academics on their campuses. Alumni, better than anyone, should realize that the reputation of their institution depends not on its won–lost record but on its reputation for integrity in all that it undertakes.

A Coalition of Presidents

The Commission understands that collective action is key to overcoming the dynamic of the athletics arms race. No single college or university can afford to act unilaterally, nor can one conference act alone. But a determined and focused group of presidents acting together can transform the world of intercollegiate athletics. Just as Archimedes was convinced he could move the world with the right fulcrum for his lever, presidents from a group of powerful conferences could, in collaboration with the NCAA, create the critical mass needed to bring about the fundamental changes this Commission deems essential.

In its earlier reports, the Commission defined a “one-plus-three” model, with the “one”—presidential control—directed toward the “three”—academic integrity, financial integrity, and certification. The Commission here proposes a new “one-plus-three” model for these new times—with the “one,” a Coalition of Presidents, directed toward an agenda of academic reform, de-escalation of the athletics arms race, and de-emphasis of the commercialization of intercollegiate athletics. The Coalition of Presidents’ goal must be nothing less than the restoration of athletics as a healthy and integral part of the academic enterprise.

The creation of the Coalition is the first order of business, but its creation will be no panacea in and of itself. Given the enormous scope of this reform effort, the Commission recognizes that change will have to be accomplished in a series of steps over time. As in its earlier reports, the Commission feels no obligation to rewrite the NCAA Manual or propose solutions to every problem on campus. Starting from the broad principle that athletic departments and athletes should be held to the same standards, rules, policies, and practices that apply elsewhere in their institutions, the Commission makes the following recommendations for the Coalition’s agenda:

Academics

Our key point is that students who participate in athletics deserve the same rights and responsibilities as all other students. Within that broad framework, the Coalition should focus on the following recommendations:

These recommendations are not new. What is novel is the Commission’s insistence that a new and independent structure is needed to pursue these proposals aggressively.

The Arms Race

The central point with regard to expenditures is the need to insist that athletic departments’ budgets be subject to the same institutional oversight and direct control as other university departments. The Coalition should work to:

Again, the recommendations put forth here have been heard before. The Coalition offers a chance to make progress on them at long last.

Commercialization

The fundamental issue is easy to state: Colleges and universities must take control of athletics programs back from television and other corporate interests. In this regard, the Coalition should:

The Commission is not naïve. It understands that its recommendations governing expenditures and commercialization may well be difficult to accept, even among academics and members of the public deeply disturbed by reports of academic misconduct in athletics programs. The reality is that many severe critics of intercollegiate athletics accept at face value the arguments about the financial exigencies of college sports. In the face of these arguments, they conclude that little can be done to rein in the arms race or to curb the rampant excesses of the market.

Nothing could be further from the truth. The athletics arms race continues only on the strength of the widespread belief that nothing can be done about it. Expenditures roar out of control only because administrators have become more concerned with financing what is in place than rethinking what they are doing. And the market is able to invade the academy both because it is eager to do so and because overloaded administrators rarely take the time to think about the consequences. The Coalition of Presidents can rethink the operational dynamics of intercollegiate athletics, prescribe what needs to be done, and help define the consequences of continuing business as usual.

Membership and Financing

The Commission recommends that the president of the American Council on Education (ACE), working with the NCAA and the Association of Governing Boards of Universities and Colleges (AGB), bring together presidential and trustee leadership drawn from ACE, the NCAA, AGB, and Division I-A conferences to establish the Coalition of Presidents. We emphasize the importance of the commitment and active involvement of presidents; Coalition members must be drawn from their group. This is an extraordinary undertaking that cannot be delegated to conference commissioners or the executive staffs of the organizations represented. As we said in our initial report 10 years ago, “The Commission’s bedrock conviction is that university presidents are the key to successful reform.”

The presidents who must step forward should represent the conferences conducting the most visible and successful athletics programs—in terms of national championships and revenues produced. These are the conferences representing the lion’s share of big-time programs. They include: the Atlantic Coast Conference (ACC), the Big East, the Big Ten, the Big 12, the Pacific-10, and the Southeastern Conference (SEC). But membership must not be restricted to presidents from those conferences alone. Institutional compromises in favor of athletics are not limited to the biggest sports schools. Coalition membership, therefore, should be strengthened by presidents from conferences that are not founding members of the BCS but that also compete at the Division I-A level.

The Coalition of Presidents should work collaboratively with the NCAA Division I Board of Directors, meeting jointly from time to time to identify priorities for review and discussion, focus on reform solutions, and develop a comprehensive timeline for appropriate action by the Division I board and by the officers of other higher education associations.

To protect the Coalition’s objectivity and the credibility of its recommendations, it is absolutely critical in the Commission’s view that it be financially independent of the athletics enterprises it is designed to influence, namely, the NCAA and the conference offices. The Commission believes the Coalition should be financed independently with assessments and dues from its member institutions, support from the higher education associations, and perhaps grants from the philanthropic community.

To complement and support the critical work that must be done, we recommend that the Knight Foundation consider helping fund the Coalition of Presidents with matching grants based on performance to the American Council on Education, and establishing, perhaps with other foundations and the Association of Governing Boards, a separate and independent body—an Institute for Intercollegiate Athletics. The Commission envisions the Institute not as an action agency but as a watchdog to maintain pressure for change. It should keep the problems of college sports visible, provide moral leadership in defense of educational integrity, monitor progress toward reform goals, and issue periodic report cards.

A Final Word

This Commission concludes its work with an admission and an exhortation. The admission first: Most of us who serve on the Knight Commission have held leadership positions while the excesses we deplore here have distorted American higher education. We offer our indictment of the existing situation painfully aware that it calls us, no less than others, to account.

The exhortation involves a strong reaffirmation of the role and purpose of higher education in enhancing the well-being of our nation. That role is best filled and these purposes best achieved when integrity, character, and honor are the hallmarks of academic activities across the board—on the playing field as much as in the classroom and laboratory.

There are no downsides to thoroughgoing reform. When and if accomplished, athletic contests would still be attended by their fans and covered by the media even if the players were students first and athletes second. None of the measures proposed here will diminish competitiveness. The games will continue and be just as exciting—perhaps more so if played without television timeouts interrupting and changing the very nature of the game. Although there might be some grumbling in the short term, the enthusiasm of students and alumni will not be abated over the long haul, largely because most will not notice the difference.

But if there is no downside to deep and sustained reform, continued inattention to the problems described here is fraught with potential dangers. Failure to engage in self-corrective action may leave higher education vulnerable to external interventions, especially legislative. In some areas that would be welcome, as in steps to control the influence of gambling. In others, it would be unwelcome, as in a possible attack on college sports’ tax-exempt status.

Worse, some predict that failure to reform from within will lead to the collapse of the current intercollegiate athletics system. Early warning signs of just that are abundant and should not be ignored. If it proves impossible to create a system of intercollegiate athletics that can live honorably within the American college and university, then responsible citizens must join with academic and public leaders to insist that the nation’s colleges and universities get out of the business of big-time sports.

The Knight Foundation Commission on Intercollegiate Athletics trusts that day will never arrive. The search now is for the will to act. Surely the colleges and universities of the land have within their community the concerned and courageous leaders it will take to return intercollegiate athletics to the mainstream of American higher education. If not, it is not the integrity of intercollegiate sports that will be held up to question, but the integrity of higher education itself.

[Ed. Note: The commission’s discussion in Appendix A of additional issues that were raised for its consideration for which no specific recommendations were made is omitted. These issues included freshman ineligibility, recruiting restrictions, need-based financial aid, early departures to the NBA, certification and accreditation, and antitrust exemptions.]

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APPENDIX B: ACTION ON KNIGHT COMMISSION RECOMMENDATIONS OF MARCH 1991

Presidential Control

Trustees should explicitly endorse and reaffirm presidential authority in all matters of athletics governance, including control of financial and personnel matters. Trustees should annually review the athletics program and work with the president to define the faculty’s role in athletics.

Implementation of this recommendation requires action on individual campuses. Following the release of the Commission’s first report, more than 100 institutions and organizations reported adoption of these principles. Additionally, the Association of Governing Boards of Universities and Colleges (AGB) has worked to educate trustees about their appropriate role in intercollegiate athletics through articles and white papers in its periodicals and publications, and via speakers and meetings focused on this topic.

Presidents should act on their obligation to control conferences.

Based on testimony before the Commission during 2000–2001, presidents do not in practice control at least a handful of Division I-A conferences. At the national level, the 1992 NCAA convention amended the NCAA Constitution to require presidential approval of conference-sponsored legislative initiatives.

Presidents should control the NCAA.

In 1997 the NCAA restructured, giving presidents full authority for the governance of intercollegiate athletics at the national level. The Association’s top body, the Executive Committee, is comprised entirely of CEOs, and the NCAA’s three divisions are led by presidential groups.

Presidents should commit their institutions to equity in all aspects of intercollegiate athletics.

Opportunities for women to compete for NCAA member institutions in NCAA championship sports increased 57 percent between 1991 and 2000. Despite this tremendous progress, during the 1998–1999 academic year (the most recent year for which data are available), 41 percent of these varsity athletes were women even though women comprise 52 percent of the undergraduates at NCAA member institutions.

Women at the Division I level in 1999–2000 — where they represent 53 percent of the student body—received 43 percent of athletic scholarship dollars and 32 percent of overall athletics budgets. Overall, 48 percent of all participants in NCAA-sponsored championships in 2000–2001 were women and 52 percent were men.

Presidents should control their institutions’ involvement with commercial television.

Presidents have been actively involved with contract negotiations with CBS, which broadcasts the Division I men’s basketball tournament, and with ESPN. Their involvement, however, has not led to institutional control over the commercial aspects of televised sports. Further, testimony before the Commission during 2000–2001 indicated that presidents are not actively involved in negotiations for televising the Bowl Championship Series (BCS) postseason football bowl games.

Academic Integrity

The NCAA should strengthen initial eligibility requirements:

The number of required units of high school academic work for initial eligibility should be raised from 11 to 15.

The 1992 NCAA convention raised the Divisions I and II core curriculum requirements from 11 to 13 units, effective in 1995.

High school students should be ineligible for reimbursed campus visits (or signing a letter of intent) until they show reasonable promise of being able to meet degree requirements.

Between 1991 and 1997 the NCAA adopted seven proposals related to proof of a prospect’s academic credentials required before an official (expense paid) visit. Criteria included minimum required test scores and core academic courses completed. In 1997, however, in response to concerns expressed by the U.S. Department of Justice, the NCAA eliminated specific academic criteria and instead requires only that the prospect submit a test score and academic transcript prior to an official visit.

Junior college transfers who did not meet NCAA initial eligibility requirements upon graduation from high school should sit out a year of competition after transfer.

This recommendation has not been adopted by the NCAA. In 1996, however, the NCAA adopted higher minimum percentage of degree requirements for all junior college transfers in Division I football and men’s basketball. These athletes must have completed 35 percent—versus 25 percent—of their degree requirements to be immediately eligible in their third year of collegiate enrollment (see below).

The NCAA should study the feasibility of requiring that the range of academic abilities of incoming athletes approximates the range of abilities of the entire freshmen class.

In its first five-year cycle, the NCAA certification program gathered data related to this recommendation by requiring that institutions compare the academic profiles of all incoming athletes with the rest of the incoming class as a whole. The next certification cycle improves upon this assessment by requiring that comparisons be made on a sport-by-sport basis, as well as by gender and racial subgroups. Significant differences in academic profiles must be noted and explained.

The letter of intent should serve the student as well as the athletics department.

Since 1991, no changes have been made in the national letter of intent program. However, athletes are permitted to appeal the terms and conditions of the letter of intent. Approximately 20,000 such documents are signed each year by prospects planning to attend NCAA Division I and II institutions. During the 1999–2000 academic year—a typical year—170 letters of intent were appealed: 86 percent of the appeals were approved, 12 percent of the athletes were granted a partial release, and 2 percent of the appeals were denied. These data indicate flexibility in the administration of the national letter of intent program.

Athletics scholarships should be offered for a five-year period.

No action to date.

Athletics eligibility should depend upon progress toward a degree.

The 1992 NCAA convention adopted new Division I requirements stipulating minimum percentages of credits earned toward a specific degree, as well as a minimum grade point average toward that degree, for athletes’ third and fourth years of eligibility, effective in 1996. Further, the permissible number of credits earned during the summer to maintain eligibility was capped, and the new satisfactory progress toward degree requirements was made applicable to midyear transfer students after a semester rather than a year on campus.

Graduation rates of athletes should be a criterion for NCAA certification.

NCAA certification incorporates graduation rates as a criterion. In the program’s first five-year cycle, however, graduation rates of all athletes were compared with the student body as a whole. The next certification cycle improves upon this assessment by requiring that comparisons be made on a sport-by-sport basis, as well as by gender and racial subgroups. Significant differences in graduation rates must be noted and explained.

Financial Integrity

All funds raised and spent in connection with intercollegiate athletics programs will be channeled through the institution’s general treasury. The athletics department budget will be developed and monitored in accordance with general budgeting procedures on campus.

Implementation of this recommendation requires action on individual campuses. Data concerning its adoption are unavailable. The NCAA certification program, however, addresses these issues specifically in the first operating principle under the Financial Integrity section of the program’s self-study document, which each Division I institution must address in detail.

Athletics costs must be reduced.

Some efforts to reduce costs have been made, such as reducing the number of allowable scholarships in certain sports and limiting assistant coaches’ salaries in men’s basketball. In the latter instance, however, the salary caps were successfully challenged as a violation of antitrust law; the NCAA settlement with the coaches cost over $50 million. At the institutional level, athletics costs rose steadily during the 1990s, such that the NCAA’s latest financial study reports that roughly just 15 percent of Divisions I and II institutions operate in the black. From 1997 to 1999, deficits at Division I-A institutions where expenses exceeded revenues increased 18 percent.

Athletics grants-in-aid should cover the full cost of attendance for the very needy.

No action to date, although the NCAA’s Special Assistance Fund available to needy athletes has increased from $3 million in 1991 to $10 million in 1998, and is scheduled to increase to $10.4 million in 2002. Additionally, in 2002 the NCAA will institute a new $17 million Student Opportunity Fund, which can be broadly used for anything that benefits athletes but not, specifically, on salaries or facilities. Each fund is scheduled to increase annually throughout the duration of the NCAA’s 11-year CBS contract.

The independence of athletics foundations and booster clubs must be curbed.

Implementation of this recommendation requires action on individual campuses. Data concerning changes in the numbers of independent athletics foundations and booster clubs are unavailable.

The NCAA formula for sharing television revenues from the Division I men’s basketball tournament must be reviewed by university presidents.

The NCAA Executive Committee and the Division I Board of Directors, both composed entirely of presidents, have been actively involved in review of the formula for distribution of revenues from the new $6.2 billion CBS contract. The formula was approved in early 2001 by the NCAA Executive Committee.

All athletics-related coaches’ income should be reviewed and approved by the university.

The 1992 NCAA convention adopted legislation requiring annual, prior written approval from the president for all athletically related income from sources outside the institution. That legislation, however, was eliminated in 2000 as part of an NCAA deregulation effort.

Coaches should be offered long-term contracts.

Implementation of this recommendation requires action on individual campuses. While it appears that more long-term contracts are being offered to big-time football and men’s basketball coaches, the pressure to win has not diminished.

Institutional support should be available for intercollegiate athletics.

Progress in this regard has been minimal. The NCAA Division I Philosophy Statement, for example, still contains language recommending that its members strive “to finance [their] athletics programs insofar as possible from revenues generated by the program itself.” Moreover, several states have laws prohibiting the use of state funds on intercollegiate athletics programs. In Division I-A, institutional support, direct government funding, and student activity fees have increased as a percentage of total revenues from 14 percent in 1993 to 16 percent in 1997.

Certification

The NCAA should adopt a certification program for all institutions granting athletics aid that would independently authenticate the integrity of each institution’s athletics program.

Division I institutions must undergo NCAA certification of their athletics departments. When the program was first adopted, institutions were meant to be certified once every five years; since then, the cycle has been extended to once every 10 years. Division II institutions, which also award athletics aid, have not adopted the certification program.

Universities should undertake comprehensive, annual policy audits of their athletics programs.

The Division I certification program requires an annual compilation of athletics policy audits and other data.

The certification program should include the major themes advanced by the Knight Commission, i.e., the “one-plus-three” model.

The NCAA certification program substantially incorporates the fundamental principles of the “one-plus-three” model. The four major components of athletics certification are: governance and commitment to rules compliance; academic integrity; fiscal integrity; and equity, welfare, and sportsmanship.

QUANTITATIVE AND QUALITATIVE RESEARCH WITH FOOTBALL BOWL SUBDIVISION UNIVERSITY PRESIDENTS ON THE COSTS AND FINANCING OF INTERCOLLEGIATE ATHLETICS: REPORT OF FINDINGS AND IMPLICATIONS, OCTOBER 2009

Knight Commission on Intercollegiate Athletics

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III.  EXECUTIVE SUMMARY

The following provides a summary of key findings from the quantitative and qualitative research.

A.  The Dilemma of Reform

It is clear from the quantitative and qualitative research that presidents recognize the need for reform; few, however, are sanguine about the possibilities for positive change. What was striking in many of our findings was the lack of any clear idea of the best way to effect change or the most appropriate entity to move reform efforts forward.

While the quantitative research revealed strong presidential support for studies of policy changes regarding a number of concerns, such as the number of coaches and athletic contests, the qualitative research revealed a sense of powerlessness to effect the kind of change that is needed at the conference and national levels to contain the athletics arms race and address critical issues regarding sustainability, such as rapidly escalating coaches’ salaries. The quantitative research also shows that a high percentage of presidents who believe that sustainability is problematic for their own institution or for their conference or the FBS as a whole believe that sweeping change is necessary across the FBS.

In sum, presidents would like serious change but don’t see themselves as the force for the changes needed, nor have they identified an alternative force they believe could be effective.

While serious problems are recognized, beyond limited actions they can take on their own campuses, presidents are at a loss to describe solutions that will address the broader FBS problems. The following are chief among their concerns:

A majority of presidents interviewed in the quantitative research favor studying the following policy initiatives to explore how these might help control costs and make FBS athletics more sustainable:

B.  Sustainability

Based on findings from the quantitative and qualitative research, it is clear that the question for a majority of presidents of equity and non-equity institutions alike is not whether or not the current model is sustainable but, given the forces at work, how long it can be sustained.

In terms of their own institutions, two-thirds of FBS presidents expressed confidence that, considering current trends in athletics revenues and expenses, athletics operations are sustainable in their current form. However, this confidence was not extended to other institutions in their conferences or to the FBS as a whole. And even in the context of their own programs, nearly half of all respondents (48%) expressed concern that the current outlook will affect the number of varsity sports their institution can retain in the future.

In the qualitative research respondents voiced broad concerns regarding the sustainability of all athletics programs in the face of what a number of presidents described in the qualitative interviews as an “arms race” that is driving up costs for athletics programs and creating tensions that cannot be clearly measured in other areas. These concerns were shared by a majority of those presidents interviewed regardless of their athletics programs’ financial outlook.

Issues identified by presidents as key factors in the accelerating costs of competing at the FBS level include the following:

Presidents also identified a number of challenges associated with the increasing costs of FBS participation, chief among them,

C.  Implications of Increases in Coaches’ Salaries and Sports-Specific Personnel

When asked about salaries across FBS institutions nationally, an overwhelming majority of FBS presidents (85%) indicated that they felt compensation was excessive in the context of higher education for football and basketball coaches.

The qualitative research suggests that presidents see the issue of coaches’ salaries as a key contributor to the “arms race” in intercollegiate athletics. Coaches’ salaries are seen as the greatest impediment to sustainability. In addition to placing strains on the institutional finances, increases in coaches’ salaries and, to a lesser extent, increases in the numbers of other sports-specific personnel required for the athletic enterprise in the FBS were seen to create a public-relations challenge with regard to other internal and external university constituencies.

Presidents are pessimistic about their ability to control these costs. A majority (56%) feels that as the use of private monies to compensate coaches has increased, their control over these salaries has decreased. A majority of presidents do not support attempts to change federal legislation to allow some level of control on coaching staff salaries. This seems to be tied to presidents’ skepticism about the political possibility of intercollegiate athletics being granted an exemption from anti-trust legislation.

D.  Budget Pressures Produced by Increasing Costs of Operating Successful Athletic Programs

Quantitative and qualitative results suggest that the increasing costs of operating successful athletic programs, especially in the current economic climate, present serious challenges to FBS presidents. For presidents of non-equity institutions, which operate with far less athletics revenue, these challenges are especially daunting.

Most presidents reported making athletics budget cuts in the most recently completed fiscal year, and a significant number anticipate continuing declines in revenues through next year. A majority of presidents (62%) believe the recession has affected athletics budgets at the same level as other units of their university. Key factors associated with the recession’s impact on FBS campuses include the following:

E.  Cross-Institutional Benefits of Successful Athletics Programs

Despite the concerns expressed by presidents regarding the pressures placed on their institution through its participation in the FBS, competing at this level is seen to carry considerable financial as well as less tangible benefits. Although a number of presidents are aware of scholarly research questioning the relationship between big-time athletics and non-athletic benefits, personal experience plays a much more powerful role in defining presidents’ attitudes toward athletics than do the results of these studies.

A significant majority of FBS presidents believe that athletics success provides substantial benefits to their institutions. These include tangible benefits such as increasing applications, quality of the student body, and donations to the university.

Presidents also see indirect benefits stemming from athletics success, including enhancing school spirit and raising the profile of the institution with regard to the general public, public officials, and other university presidents. Some of these latter benefits are seen to provide leverage for more concrete benefits such as helping to generate higher levels of giving and helping to attract more and better qualified students.

Presidents do not view fundraising for athletics and academics as a zero-sum game, in which financial gains for athletics programs are made at the expense of the academic side of the house. Despite research suggesting that athletics are taking a larger share of donations, some 80 percent of presidents expressed the belief that athletic fundraising does not take from the same pool of money that would otherwise go to general university fundraising.

F.  Transparency

With regard to the financial information currently available, a majority of presidents (95%) agree that they are confident in the accuracy of the financial information they receive from their athletics departments, with a vast majority of these (82%) being very confident. Presidents expressed lower levels of confidence regarding the financial information reported by their peer institution (61% were “somewhat” confident this information was accurate).

Their confidence in data currently available notwithstanding, nearly 8 in 10 presidents agree that greater transparency of athletics operating and capital costs is needed.

Many presidents, particularly those at public universities already required to comply with state standards regarding financial data, are convinced that their programs currently practice transparency, although some acknowledged that not all information is readily available. Furthermore, there is a lack of consensus regarding what constitutes transparency and a recognition that it is possible to game the system regarding the nature and appearance of financial data. That said, generally, presidents agree that standards should be set regarding reporting of individual institutional data so that measures are consistent.

Nearly 9 out of 10 FBS presidents have reviewed the NCAA financial dashboard indicators for their institutions. The NCAA is viewed as a key player in providing even greater transparency, particularly in a way that provides a reliable basis for cross-institutional and conference comparisons that would be available to the media and general public.

Discussion Questions

1.  Which constituency is the most likely to be able to effectuate a change in intercollegiate athletics? Which is the least likely to effectuate change?

2.  What is the likelihood that the reform measures suggested by the Knight Commission will be adopted by the NCAA?

3.  Why do people cling to antiquated (and mythological) notions of amateurism when discussing intercollegiate athletics?

4.  What, if any, reforms would you make to intercollegiate athletics? How could you make these reforms economically feasible?

5.  What would be the impact if athletes in revenue-generating sports were paid a stipend?

6.  What problems would arise if only athletes in men’s basketball and football were paid?

7.  Are there any potential racial repercussions to not fully contemplating pay for student-athletes?

8.  Should the revenues of profitable sports be used to support those that are not profitable?

9.  What justifications exist for the continuation of the existing amateurism model in collegiate sports?

10.  Discuss the “athletic arms race” that universities are facing, including the aggravating factors and any suggestions that you feel would properly address the situation.

11.  What factors have led to the commercialization of college sports? What are the implications of this commercialization?

12.  What would be the impact of NCAA regulations targeting coaching and sport personnel?