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
Showing posts with label Northwestern University. Show all posts
Showing posts with label Northwestern University. Show all posts
Wednesday, May 7, 2014
Tuesday, May 6, 2014
CAPA's reasons for standing up for the Northwestern players
On March 26th of 2014, Northwestern football players went before the National Labor Relations Board in Chicago, Illinois to gain employee status. They want adequate compensation for the revenue they bring to Northwestern and for the time they spend training year-round. In addition, they want the right of collective-bargaining so they will be better cared for by the NCAA and Northwestern. Kain Colter, with the College Athletes Players Association (CAPA) as acting petitioner, made a list of grievances against NCAA policies that they hope employee status can fix. They go on to compare different aspects of a Northwestern student-athlete’s life to that of an employee to further their position for unionization.
In their review of the Northwestern case, the NLRB wrote that the Northwestern players are playing for the benefit of the school, so they should be able to negotiate for pay. They make vasts amount of revenue for Northwestern from broadcasting contracts, merchandising, and licensing.
“Clearly, the Employer's players perform valuable services for their Employer. Monetarily, the Employer's football program generated revenues of approximately $235 million during the nine year period 2003 — 2012,” the National Labor Relations board's judge Peter Sung Ohr said in his analysis of the Northwestern case.
The NLRB also wrote that player scholarships and scholarship agreements are like wages and work contracts. They argued that the Northwestern head coach Pat Fitzgerald is like a boss, since within their scholarship agreements, he gives them demanding itineraries and punishes them if they don’t follow his schedule.
“In the instant case, the record establishes that the players who receive scholarships are under strict and exacting control by their Employer throughout the entire year. Commencing with training camp which begins approximately six weeks before the start of the academic year, the coaches exercise a great deal of control over the players,” the NLRB said.
CAPA contended that the NCAA takes poor care of their athletes, and that collective bargaining will lead to improved player care. Many players get severely injured while playing football, and the NCAA does not force schools to help them. This leaves the players with massive medical expenses, on top of their remaining school tuition.
“The NCAA recently stated in court papers that it ‘has no legal duty to protect college athletes’ from injury, and has failed to investigate and minimize concussion-related deaths,” CAPA said on their website.
“Currently, over $1.2 billion in NEW TV revenue is flooding NCAA sports yet players are too often stuck with sports-related medical expenses, can lose their scholarships if they are permanently injured, and “full” scholarships are capped by the NCAA below the cost of attendance by $3,000-$5,000 per player per year.”
The Northwestern players simply desire to be seen as employees and be properly taken care of. The outcome of this case will determine whether or not these demands are met. Without collective bargaining the players might not get the care or say they want in their college careers, and all the problems that CAPA has identified may remain in college athletics for a much longer time.
By: Austin Carvey and Kofi Odame
In their review of the Northwestern case, the NLRB wrote that the Northwestern players are playing for the benefit of the school, so they should be able to negotiate for pay. They make vasts amount of revenue for Northwestern from broadcasting contracts, merchandising, and licensing.
“Clearly, the Employer's players perform valuable services for their Employer. Monetarily, the Employer's football program generated revenues of approximately $235 million during the nine year period 2003 — 2012,” the National Labor Relations board's judge Peter Sung Ohr said in his analysis of the Northwestern case.
The NLRB also wrote that player scholarships and scholarship agreements are like wages and work contracts. They argued that the Northwestern head coach Pat Fitzgerald is like a boss, since within their scholarship agreements, he gives them demanding itineraries and punishes them if they don’t follow his schedule.
“In the instant case, the record establishes that the players who receive scholarships are under strict and exacting control by their Employer throughout the entire year. Commencing with training camp which begins approximately six weeks before the start of the academic year, the coaches exercise a great deal of control over the players,” the NLRB said.
CAPA contended that the NCAA takes poor care of their athletes, and that collective bargaining will lead to improved player care. Many players get severely injured while playing football, and the NCAA does not force schools to help them. This leaves the players with massive medical expenses, on top of their remaining school tuition.
“The NCAA recently stated in court papers that it ‘has no legal duty to protect college athletes’ from injury, and has failed to investigate and minimize concussion-related deaths,” CAPA said on their website.
“Currently, over $1.2 billion in NEW TV revenue is flooding NCAA sports yet players are too often stuck with sports-related medical expenses, can lose their scholarships if they are permanently injured, and “full” scholarships are capped by the NCAA below the cost of attendance by $3,000-$5,000 per player per year.”
The Northwestern players simply desire to be seen as employees and be properly taken care of. The outcome of this case will determine whether or not these demands are met. Without collective bargaining the players might not get the care or say they want in their college careers, and all the problems that CAPA has identified may remain in college athletics for a much longer time.
By: Austin Carvey and Kofi Odame
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