Placeholder Image

Subtitles section Play video

  • I've long been fascinated with college sports.

  • I grew up down south where college football is a religion.

  • I saw up close the power of Hoya basketball

  • when I went to Georgetown.

  • And now I've got a son set to play college lacrosse,

  • and that's giving me a whole new window into that world.

  • And as with everything, I see a business story.

  • Right now a first year lacrosse player

  • at a division three school like my son

  • and Trevor Lawrence,

  • Clemson's championship winning quarterback

  • and widely touted NFL star,

  • well, they have something in common.

  • Neither of them are allowed to be paid a dime

  • while they play sports at the college level.

  • And that may be about to change.

  • I think 2021 will be a pivotal year

  • for college sports for a lot of reasons.

  • We've been talking about

  • the potential tipping point in college sports.

  • This may be the time.

  • With the pandemic,

  • with the racial justice issues,

  • with the activity at the federal and state level,

  • with the activity at the Supreme Court,

  • that we say, this is no longer a sustainable model.

  • Schools are conspiring with competitors,

  • agreeing with competitors,

  • to pay no salaries to the workers

  • who are making the schools billions of dollars

  • on the theory that consumers want the schools

  • to pay their workers nothing.

  • After years of asking the question,

  • will paying college athletes destroy college athletics?

  • It looks like finally in 2021,

  • that question will be answered.

  • The tipping point is here.

  • College sports was built on the idea of amateurism.

  • More than a hundred years ago,

  • after the death of 18 students and injuries to 150 others,

  • the NCAA was formed as a nonprofit.

  • Its mission: to protect the lives of football players

  • by adding new rules to the sport.

  • The biggest being the advent of the forward pass.

  • One of the core tenets:

  • these were not professional athletes.

  • Amateurism is defined in the NCAA's 465 page manual

  • as being motivated primarily by education

  • and by the physical, mental, and social benefits

  • to be derived,

  • protected from exploitation by professional

  • and commercial enterprises.

  • In lieu of paying the players,

  • schools provide athletes with scholarships.

  • But today, between the college football championships-

  • Touchdown.

  • DeVonta Smith cannot be stopped.

  • And March Madness-

  • How about that?

  • The NCAA is a money-making machine,

  • with nearly $19 billion in revenue in 2019 alone.

  • And the students, they still don't get paid.

  • When and how did it get so out of control?

  • Like what was there a catalytic moment

  • or was this just a slow bleed as it were?

  • The explosion in revenues came from another

  • Supreme Court antitrust case called Board of Regents 37 ago.

  • Jeffrey Kessler is the co- lead counsel for the basketball

  • and football players who are suing the NCAA

  • for greater economic rights.

  • What happened in Board of Regents

  • is the Supreme Court ruled that the NCAA could not

  • restrict the broadcasts of college football

  • and had to allow the conferences

  • and the schools to compete with each other.

  • That led to an explosion in television revenues,

  • both in college football and then derivatively

  • in college basketball.

  • Rather than two networks broadcasting

  • a total of 14 college football games each week,

  • more than 15 networks carry nearly every college

  • football game on TV.

  • More games led to more ad revenue and events like-

  • LSU sits on the throne of college football.

  • The college football championship

  • brings in close to half a billion dollars

  • in revenue every year.

  • That revenue ends up influencing

  • how college sports is organized.

  • There was a great kind of realignment,

  • if you will, of a number of the major conferences.

  • This is Amy Privette Perko,

  • executive director of the Knight Commission,

  • an independent group that spearheads reform

  • in college athletics.

  • And that was really done to increase the footprint

  • of those conferences for the football TV market.

  • And what may work for the football TV market

  • may not be the best solution

  • for all the other sport programs.

  • While there are more

  • than 350 division one basketball schools,

  • they're only 130 in football,

  • also known as the football bowl subdivision, or FBS.

  • That's led to a great imbalance

  • in schools' athletic budgets.

  • FBS college football is the most powerful sport

  • in college sports from the standpoint of the finances

  • and shaping the entire landscape.

  • Because of the money in football,

  • you have athletic programs in division one

  • whose budgets are $5 million a year,

  • and they're competing in the same division in basketball

  • with universities that have athletic department budgets

  • of more than $200 million a year.

  • College football already rakes in money

  • hand over fist,

  • but the new playoff system is about to make it

  • more profitable than ever.

  • According to CNN, the 64 schools that compete

  • for a spot in that final game

  • brought in a combined $2.8 billion last season.

  • And with billions of dollars now coming

  • into NCAA programs, that money needs to be spent.

  • The phrase they use in economics

  • is rent seeking behavior.

  • This is my colleague, Joe Nocera,

  • a Bloomberg opinion writer and author,

  • who's been delving into the inequalities

  • of college sports for more than a decade.

  • That means money has to go somewhere.

  • And with division one basketball

  • and football being the lion's share

  • of where the revenue comes from,

  • the money goes straight back into those programs.

  • Where's it going to go?

  • It goes to the administrators.

  • It goes to the conference commissioners.

  • It goes to the coaches.

  • It goes to the assistant coaches.

  • It goes to the weight coaches.

  • It goes to these fancy buildings.

  • It goes to a new football stadium.

  • Nick Saban makes north of

  • five and a half million dollars a year.

  • Very simply, is he worth it to the University of Alabama?

  • Nick Saban's the best financial investment

  • this University has ever made.

  • About 45 of the 50 states where either

  • the basketball coach or the football coach

  • is the highest paid state employee.

  • However, there is one place

  • that money does not go.

  • They all say, well,

  • we can't afford to pay the players.

  • Of course you can afford to pay the players.

  • You've just chosen not to.

  • For years,

  • the NCAA has made two main arguments.

  • The first-

  • Well, they are paid.

  • We're here to educate them and help them grow as people,

  • but we're not here to help them

  • in terms of their financial gain.

  • The second being that paying players

  • would take away from college sports quote,

  • spirit of amateurism,

  • and some people do agree with those sentiments,

  • even some of the players.

  • I think on the financial side,

  • what the influx of, you know,

  • monetary incentives has done

  • is it's just made that process a little bit harder, right?

  • This is Kendall Spencer,

  • former track star at the University of New Mexico,

  • Olympic hopeful and the first student to ever sit

  • on the NCAA division one board.

  • I reflect on just ideally what I would want

  • a student athlete to be thinking about

  • when they were choosing their institution was

  • you know, where can I go

  • to not only get this great athletic experience,

  • and you know, maybe I'm trying to make an Olympic team

  • or maybe I'm trying to make the professional leagues,

  • but beyond that, where can I go

  • where I get what I need academically?

  • So that no matter what happens, I'm going to be successful.

  • Kendall and others argue

  • that this is actually what the current model accomplishes

  • for the vast, vast majority of athletes.

  • They say that reforms shouldn't unduly punish

  • those true student athletes in the process

  • of reforming a system that's been undermined

  • by two big money sports.

  • So for some, a strong education really is the

  • best compensation they can get for playing college sports.

  • But the money is hard to ignore,

  • and the pandemic made it even harder.

  • Tonight, the NCAA president says

  • there will be no fall championships

  • except for the college football playoff.

  • The money was so important for the universities.

  • They were going to play football, come hell or high water.

  • It didn't really matter

  • if the athletes got COVID.

  • They were going to play.

  • They'd always said, you know,

  • they're students first and you know, athletes second.

  • And they're there for an education.

  • So here you had a situation where most of the rest

  • of the university, in many cases, was not even on campus.

  • We reached out to the NCAA

  • about the health risks posed to players,

  • but they didn't respond.

  • And critics say that the canceling of one sport

  • but the continuation of another solely

  • because of financial reasons

  • makes the NCAAs amateurism argument moot.

  • The mythology that D one basketball

  • and FBS football was just like

  • another extracurricular activity,

  • as if it were, you know, rowing, you know,

  • or this or the newspaper or the drama club,

  • when in fact, these have become gigantic businesses

  • that are completely independent

  • of the educational mission of these schools.

  • And in college sports,

  • there was not only the argument that if we pay the players,

  • it will destroy the sport.

  • This is Gabe Feldman.

  • He's a professor of Sports Law at Tulane University

  • and overall expert on all things NCAA.

  • There was this added layer

  • that if we pay the players,

  • that will mean that much of the benefit will flow

  • to a relatively small number of players,

  • and the other sports will be hurt.

  • So we'll end up with college football

  • and maybe some men's and women's basketball,

  • but rowing and swimming and diving and golf and lacrosse,

  • that'll all collapse

  • because schools are struggling to make money.

  • So if the pandemic laid bare the importance

  • of college football revenue,

  • and the NCAA stood firm on not paying players,

  • could there be a middle ground?

  • I think there were plenty

  • of people who bought that argument,

  • accepted that we will do damage to college sports as a whole

  • if we provide compensation

  • for football and basketball players.

  • And so name, image, and likeness rights

  • were seen as I think, a compromise,

  • as a workable solution that would provide benefits

  • for college athletes.

  • Compensation for name, image, and likeness,

  • or NIL, doesn't involve colleges paying players

  • but does allow athletes to benefit

  • from their accomplishments

  • as the schools, conferences, TV networks

  • and others already are.

  • Help me understand how NIL fits