The LEAD1 Angle will provide informative and engaging content to the LEAD1 membership and college sports community on issues in college sports that warrant more discussion. Our audience will hear diverse perspectives on these key topics from some of the most knowledgeable professionals in our industry.
Ep. 17: Gabe Feldman, Tulane University Sports Law Program
Employment status of college athletes. Name, image, and likeness (NIL). The Supreme Court’s Alston decision. National Labor Relations Board (NLRB). And more. If you’re a college sports stakeholder, by now, you’re very aware of all the legal issues that are changing the landscape of the enterprise. That is why LEAD1 President and CEO, Tom McMillen, former Congressman, booked Gabe Feldman, Director of the Tulane University Sports Law program, as the 17th guest on the “LEAD1 Angle with Tom McMillen.” The pair recently presented before the Knight Commission on Intercollegiate Athletics; McMillen bringing the political angle, and Feldman the legal viewpoint. They continued their discussion on the LEAD1 Angle. Here are some of the main takeaways from their conversation:
On NIL, according to Feldman:
How the NCAA enforces NIL will impact their ability to defend the principle of “amateurism” in the courts. Given the NCAA’s permissive Interim NIL policy, if the NCAA continues to allow for huge NIL deals, it will undermine their ability to defend amateurism or prohibitions on “pay for play” in the courts under antitrust law. In this vein, the Supreme Court Alston decision, Justice Kavanaugh’s concurrence specifically, makes the point that college sports should be treated more like other enterprises, and not given differential treatment based upon amateurism. For college sports to protect the collegiate model, the enterprise must focus on the academic mission as the differentiating feature from other enterprises.NCAA investigations on NIL deals, like BYU and Miami, are fact determinative, but may be more of an exploratory exercise at this point.The NCAA’s Interim NIL policy does not permit compensation for work not performed by college athletes (e.g., legitimate NIL deals must be quid pro quo). The NCAA enforcement issue, therefore, is whether these “collective” NIL deals, like Miami and BYU, are legitimate and not just an “end-around” for boosters to funnel cash to athletes. Because the NCAA’s Interim NIL policy is very deregulated and generally defers to state laws where applicable, recent reports of the NCAA investigating various institutional NIL agreements may be more of an exploratory exercise to learn more about the nature of the deals, than a true investigation.A “crisis” may need to occur for the Congress to get involved in college sports. As McMillen has stated, a crisis, like a college athlete suffering significant harm because of an NIL agreement, due to lack of regulatory oversight, may create the type of impetus for the Congress to get involved in college sports. Unlike the current NIL landscape, according to Feldman, professional sports are heavily regulated, including with respect to agent involvement, so the NIL landscape may be unfortunately “ripe” for some significant negative event to occur to a college athlete.On the employment status of college athletes, according to Feldman:
It is plausible that the new NCAA Division I, being charged with implementing transformative change, could factor in collective bargaining for college athletes into their rules-making considerations. DeMaurice Smith, Executive Director of the NFLPA, recently made comments that there needs to be a new model in college sports with college athletes having bargaining power but not defined as employees. He believes a conference could lead the charge by creating a College Athlete Corporation where college athletes would share in revenue and have other bargaining rights. According to Feldman, new NCAA Division I could consider modifying pay for play rules considering this possibility, particularly if athletes were to bargain for a portion of television revenue.Albeit unlikely, College Basketball Players Association recent unfair labor practice charg
Ep. 16: Michael Schreiber, Playfly Sports
On Wednesday, LEAD1 Association (“LEAD1”) released its 16th episode of the “LEAD1 Angle with Tom McMillen,” where LEAD1 CEO and President, Tom McMillen, interviewed Playfly Sports CEO and Founder, Michael Schreiber, on the topic of multimedia rights (MMR) and related opportunities in college sports. Playfly Sports is one of the big new players in MMR in our enterprise and helps collegiate athletics departments, and other sports enterprises, develop sophisticated strategies to monetize and better promote their media content.
There are a couple new trends in college sports including name, image, and likeness (NIL), and increased over-the-top (OTT) digital streaming, that according to Schreiber, will help create more MMR opportunities for collegiate athletics departments. On NIL, many new advertisers are coming into college athletics using college athletes as influencers to promote their brands. This new trend could indicate that many new companies may be willing to spend money in college sports perhaps more broadly in the future.
In that regard, some NIL critics have stated that one unintended consequence of NIL is that funds that would otherwise be directed to an entire athletics department may now only be directed solely towards individual college athletes. In fact, some of the NCAA’s earliest proposed NIL legislation precluded third parties from contracting with both an institution and an institution’s college athletes. While there may be some examples of displacement, Schreiber, however, believes that third parties, institutions, and college athletes all working together can create even greater opportunities for these stakeholders.
In addition, the trend of athletics departments creating OTT digital streaming, content distributed directly to their fans, as opposed to just traditional linear cable television, according to Schreiber, will also help collegiate athletics departments bring in more broadcast and advertising monies than before. “Direct communication with fans [such as direct to consumer subscriptions] and building media business models [based upon that] is the new focus,” [in terms of consumption] said Schreiber.
In that vein, because the consumption of college sports can be fragmented among interested fans, whether due to geographical, age, or other differences among fans, collegiate athletics departments should consider novel approaches in their MMR efforts to create more “membership” and “community” around their fans, said Schreiber. “We want our partners to “think more like a media company.”
So as college sports evolves with NIL and digital trends like OTT, more revenue streams and other opportunities can be maximized for those athletics departments that choose to embrace it.
More in the recording can be found on the intersection between college sports and the latest MMR trends.
Ep. 15: U.S. Representative Lori Trahan (MA-03)
On Tuesday, LEAD1 Association (“LEAD1”) released its 15th episode of the “LEAD1 Angle with Tom McMillen,” where LEAD1 CEO and President, Tom McMillen, interviewed Rep. Lori Trahan (MA-03) to discuss her proposed College Right to Organize Act, which would amend the National Labor Relations Act (NLRA) to define college athletes as employees.
Trahan’s interest in college sports stems from her being a former Division-I volleyball player, which helped her become the first person in her family to graduate college. Because of her background, Trahan fully understands the sacrifices that college athletes make in terms of balancing athletics and academics. In addition to her collective bargaining legislation, Trahan has sponsored a name, image, and likeness (NIL) bill and is a member of the House Energy and Commerce Committee, which is scheduled to hold a hearing on college athletes NIL legislation this Thursday.
On the employment issue, many critics of collective bargaining and possibly revenue sharing point out that all non-revenue and low revenue sports, not subject to Title IX, would be cut because of budget pressures, which would irreparably harm our Olympic effort that depends on college athletes for its pipeline of Olympic participants. Employment rights would also possibly subject college athletes to social security and Medicare taxes, federal and state unemployment taxes, worker’s compensation insurance, as well as at will employment status, which could lead to termination for non-performance on the playing field. Employment rights could also further complicate universities balancing academic and athletic priorities.
Trahan’s core response to these possible consequences of employment rights is the following—defining and organizing college athletes as employees would provide them with the necessary tools and voice to best advocate for their futures, and further close gender equity issues within college sports.
More can be found in the interview on the intersection between collective bargaining and Title IX, as well as other possible employment status considerations.
Ep. 14: Dr. Andrew McGregor, Dallas College
There is a saying that history often repeats itself. During its infant stages, the NCAA adopted a principle of institutional autonomy called the “Home Rule” principle. In other words, college sports agreed to act individually on regulating the enterprise and generally no national rules were implemented until the NCAA’s 1948 “Sanity Code,” which resulted in more centralization of rulemaking and a more powerful NCAA. In terms of present day, after NIL, and the Supreme Court Alston decision, the answer for college sports may very well look like a variation of Home Rule.
This was the genesis of LEAD1’s 14th episode of the “LEAD1 Angle with Tom McMillen,” released today, where LEAD1 CEO and President, McMillen, chatted with Andrew McGregor, college sports historian and professor of history at Dallas College. McGregor recently published an Op-ed in the Washington Post (link) about the parallels between Oklahoma and Texas moving to the SEC, relative to the history of Oklahoma’s long-standing fight against the NCAA’s role as the central authority in college athletics. In fact, Oklahoma was one of the first institutions to be put on probation when the NCAA first established regulatory authority over the enterprise in the mid twentieth century, and, Oklahoma challenged the NCAA’s former television monopoly, which eventually empowered the conferences to negotiate their own television contracts, leading to our current landscape today. In other words, the recent expansion of the SEC, and conferences taking more authority, is emblematic of the NCAA’s former Home Rule principle, or further deregulation of the NCAA.
During the episode, McMillen and McGregor further discuss that if the current version of Home Rule failed in the years ahead, it may be up to the Congress to restore the powers to a national organization to create the more even playing field, which has been so fundamental to college sports. Today’s version of Home Rule, for example, could create even further stratification between the resource rich and lesser resource schools, creating greater impetus for the Congress to possibly intervene. McMillen and McGregor also reimagine the intersection between athletics and academics, questioning whether college sports has become more of an entertainment enterprise, than an educational one. More on how history is repeating itself in college sports, including the possible status of student-athletes as employees, can be found in the episode.
Ep. 13: Lyle Adams, Spry Payments
On Tuesday, LEAD1 Association (“LEAD1”) released its latest episode of the “LEAD1 Angle with Tom McMillen.” LEAD1 President and CEO, McMillen, sat down with Lyle Adams, CEO at Spry, a comprehensive platform that helps athletic departments adapt to the NIL landscape, particularly with regard to how student-athletes can disclose their prospective NIL opportunities, while helping institutions identify potential conflicts. Spry's main priorities are to keep student-athletes eligible (compliant), while increasing the efficiency of athletic departments and prioritizing student-athlete education.
If Adams’ name sounds familiar – it should. Adams and Spry have been a big LEAD1 supporter during this pandemic, most notably as the presenting partner for LEAD1’s virtual spring meeting. His team is also helping LEAD1 athletic departments better prepare for NIL changes coming soon. Adams’ story is admirable – he’s a former LEAD1 student-athlete, professional soccer player, and following his playing career, was one of the first employees at Uber. Those experiences, Adams describes, led to the creation of Spry. As an early Uber employee, Adams learned supply chain management , product and engineering tactics, which serve as a major influence for Spry’s platform and infrastructure.
In the interview, Adams discusses the intersection between NIL and technology. With thousands of potential student-athlete NIL deals among Division I college sports, and compliance departments limited to a couple of staff people, technology, according to Adams, can be used to effectively track disclosure of NIL deals and build intelligence in monitoring deals over time. Adams’ philosophy is aligned with LEAD1’s NIL Working Group’s principles, which has advocated for disclosure of all NIL deals, and using technology to help ensure regulatory compliance, including monitoring agent and booster activity. Spry’s platform, for example, can alert student-athletes whether agents are registered with the school and has similar software to identify conflict areas with boosters. Spry’s platform has extensive reporting functionality, which can identify opportunities that could be potentially harmful or malicious in nature.
McMillen asked Adams “what keeps you up at night?” Adams responded by bringing up a fairly buried point in the NIL conversation –some of the unintended consequences of NIL, particularly Pell Grant eligibility. In general, students whose total family income is $50,000 a year or less qualify for Pell Grants. Pell Grant calculations are based upon a number of factors including cost of attendance (which varies by institution), status as a full-time student, and other considerations. Accordingly, student-athletes need to consider whether NIL endorsements are lucrative enough to potentially sacrifice their financial aid.
While Adams believes that NIL will be a tremendous opportunity [for at least half of all student-athletes to earn some additional cash], in addition to being a real-life apprenticeship opportunity, with opportunity comes some risk. Adams’ platform, Spry, can help LEAD1 athletic departments mitigate such risks.
Ep. 12: Richard Giller, Pillsbury Winthrop Shaw Pittman LLP
On Tuesday, LEAD1 Association (“LEAD1”) released its 12th episode of the “LEAD1 Angle with Tom McMillen.” In this latest episode, McMillen is joined by Richard Giller, Partner at Pillsbury, a familiar guest for the LEAD1 audience who appeared on a LEAD1 panel last year providing expertise on the impact of event cancellation and business interruption insurance for college sports. This time, the focus of McMillen and Giller’s conversation centered on possible name, image, and likeness (NIL) insurance issues as well as other insurance topics that athletic departments should be thinking about.
With regard to NIL, the recent Tiger Woods car crash got Giller thinking about endorsement insurance issues for college sports. Giller, a Los Angeles resident who was on the road that day, actually saw Woods’ recently flipped car right after the crash. From an NIL standpoint, Giller talks about how it is common for endorsement deals to have a “pay for play clause” where an athlete could be required to actively play his or her sport (as opposed to, for example, being permanently sidelined from injury) to receive endorsement payment pursuant to the contract. Giller thinks this situation would only apply towards big national NIL contracts at the college level, given that the threshold for professional athlete endorsement contracts is typically at least $500,000.
Giller also described other insurance policies that all college athletes should consider. While the NCAA provides permanent total disability (PTD) coverage (i.e., lump sum for not being able to play sports again), the NCAA does not offer loss of value (LOV) insurance (i.e., injured, but not permanently) because the coverage has not shown to consistently benefit athletes who file a claim. According to Giller, “the bigger the claim, the more likely to be denied by an insurance company.”
In addition, McMillen and Giller discussed the trend of NCAA Student Assistance Fund (SAF) monies being more and more directed towards paying insurance premiums as opposed to other intended areas for student-athletes such as educational, health, safety, and personal or family expenses.
More can be found in the interview on coverage for COVID-19 insurance claims.