How will college football change if Jeffrey Kessler's antitrust lawsuit succeeds?

Northwestern’s effort to unionize college football players will cause major changes to college football should it succeed. Unionizing will result in the scholarship players becoming employees and will cause financial issues to arise for the NCAA and colleges associated with it.

Many of the changes to college football will stem from the financial issues associated with the new employee status of the players. With the hundreds of football players in the NCAA, there will be a lot of extra money being spent if they become employees; however, it is still unclear how these financial issues will impact college football for the NCAA.

If student-athletes become employees, then the schools will have to pay extra expenses for them. These schools that are going to maintain Division I football teams are going to have to pay 20% in excess of the student’s tuition because of health care, pensions, disability insurance, and unemployment insurance. This is going to lead to a decrease in the amount of money that can be spent to maintain football teams across all divisions in the NCAA.

For the student-athletes, the status change from player to employee will also have its own effects. Colleges can offer its own financial backing plan for each athlete and players can choose which plan is best for them. As a result of that, colleges that have more of a financial backbone can pay for better players than those that do not.

“If you're USC or even Rice, you could say to a recruit, 'I know you're talking to these other two schools, but if you come here we'll pay your medical insurance for five years, plus you can collectively bargain for other things you want, plus if you graduate early you'll get extra dough in a trust fund, and perhaps you can capitalize off marketing value if you become our star quarterback,'” SMU athletic director, Rick Hart, said in a 2014 CbsSports.com article.

Taxes are also another problem that has to be considered. An athlete receives a scholarship to play for a team and study at school as a student. If they are going be employees of the school, the scholarship and wages that they will receive is taxable by the IRS. It would make it increasingly difficult for college football players to pay for and attend college because of the taxes they will be responsible for on both accounts.

"The fact that the players were not considered employees in the past is essentially the reason why their scholarship or parts of it weren't taxed before,” Garret Higgins, a partner of the Exempt Organization Tax and Advisory Services group, said in an ESPN article. ”The IRS may be able to make the argument that the scholarship is really payment for services, and therefore compensation, and is now taxable to the athlete.” 

Financial issues are only part of the reason as to why the changes are coming to college football in the NCAA, but its impact is going to be felt immediately. Smaller universities may not be able to pay as much as larger ones, widening the skill difference across Division 1 athletics. Some student-athletes may find it harder to attend college because of the taxes they are required to pay.  If this lawsuit passes, the NCAA will find their profits cut by a large margin if they want to continue college athletics.

Written by Allan Lee and Sean Santiago