In College Athletics, Dealmaking Could Be a Win-Win

By Katie Shonkon / Dealmaking

A recent ruling by a regional branch of the National Labor Relations Board (NLRB) raises the question of whether college football and basketball players will engage in the kind of collective dealmaking with university administrations that is found in business and government.

In March, the NLRB in Chicago sided in favor of a group called the College Athletes Players Association (CAPA), which had petitioned for Northwestern University’s scholarship football players to be allowed to unionize as employees. The regional NLRB director, Peter Ohr, ruled that Northwestern’s players should be considered employees rather than students because of the amount of time they devoted to team activities and the fact that coaches control their scholarships.

Northwestern and the National Collegiate Athletic Association (NCAA) plan to appeal the decision to the NLRB in Washington. The case could eventually reach the federal courts and even the Supreme Court.

At many U.S. universities, football and basketball programs generate millions in revenues and donations that universities spend on stadiums, athletic centers, and coach salaries, in addition to less lucrative sports, scholarships, and other school programs. The college football playoffs have secured a television contract worth $7 billion over 10 years, and the March Madness college basketball playoffs generate $800 million annually for the NCAA.

Players are widely credited with boosting these profits, and some critics say they deserve a piece of the pie, other than their scholarship money.

Though some observers have speculated that the ruling could spell the end of the NCAA as it currently exists, the ruling currently applies only to scholarship football players at one private university, write Steve Eder and Ben Strauss in the New York Times. If football and basketball programs begin to unionize, it will not be for at least several years. But we can for the moment speculate about what future labor negotiations in college athletics would look like.

Following the model of unionized leagues such as the National Football League and the National Basketball Association, the stakeholders—the players, the athletic conferences, and the NCAA—might agree to salary parameters that set ranges for how much teams would pay their players. Rules might be set for a process of free agency, drafts, and performance bonuses, writes the New York Times.

Other issues unique to the college environment could be up for negotiation as well. The CAPA has developed a long wish list of potential negotiation issues: medical coverage for players, measures to reduce concussion risks, increases in scholarships, the possibility of paid sponsorships for players, measures to improve graduation rates, and an improved process for handling accusations of rule violations.

Universities and the NCAA can be expected to push back against continued efforts to unionize college sports. But if a new conception of elite college athletes as employees eventually takes hold, the number of issues at stake suggests that the negotiations would be complex and multi-faceted—and thus ripe for the type of dealmaking that could allow all parties involved to declare victory.

Related Article: Dealmaking – Second Guessing the Terms of the Deal


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