Tag Archives: O’Bannon

Ask SportsBizMiss (1)

Ask SportsBizMiss: volleyball profit, licensing naming rights, ticket revenue and government subsidies

Ask SportsBizMiss (1)Until now, we haven’t had a mailbag feature here at BusinessofCollegeSports.com, but I do check the search terms people use to find our site almost every day. So many times I wish I could reach out to the person and see if they found what they were looking for, but I don’t actually know who searched the term or how to get in touch with them…so, I’m going to pretend they emailed me and answer a few I’ve seen over the past week.

If you want to submit a question for a future edition of “Ask SportsBizMiss,” instructions are at the bottom of this post.

Here’s a sampling of searches I’ve seen over the past week….

“volleyball program turns profit”

If you were searching for a college volleyball program that turns a profit, you probably didn’t find one. It’s extremely rare for a sport outside of football or men’s basketball to end the year with net revenue (it’s not technically correct to call it “profit” since athletic departments are nonprofit entities). I’m asked about baseball and ice hockey most often, and you can find a program here or there that has a small amount of net revenue, but I’ve never seen a volleyball program with net revenue at the end of the year.

I decided to take a look at a couple of women’s programs first. Penn State and Texas finished last season ranked #1 and #2, so I checked out their financials for women’s volleyball:

School Revenue Expense Net Revenue
Penn State $850,993 $1,395,721 -$544,728
Texas $1,387,377 $3,177,635 -$1,790,258

Unfortunately, I don’t have the time to do this for every school, but I think you get the picture.

Men’s volleyball isn’t doing any better. Penn State’s men’s team only generated $222,044 but spent $346,791.

The fact of the matter is that few (and by few, I mean a handful) of programs outside of football and men’s basketball generate any net revenue. Many don’t make enough to cover scholarships for the student athletes within that sport, much less coaching salaries, trainers, insurance, travel, etc. I wrote last year about how even the top women’s basketball programs don’t generate enough revenue to cover their expenses.

So, sorry whoever searched this, but I doubt you’ll find any volleyball programs generating net revenue.

“licensing naming rights”

If you were looking for naming rights on stadiums, I have an entire database of every deal I know of in college athletics here.

If you were looking for the more recent issue of student athletes licensing their naming rights, the O’Bannon ruling didn’t give student athletes the right to license their own name individually. I think I analyzed O’Bannon from just about every angle and on just about every platform possible:

“ticket revenue Florida State”

This one is easy: $20.3 million total, $17.6 million from football. The Seminoles also had another $15.3 million in contributions to football, and no doubt much of that came from ticket-related contributions (those donations you have to make in order to buy season tickets, get better seats, etc.).

Need tickets to a Florida State game?

“government subsidies for athletics”

There seems to be great concern that state and local governments are subsidizing athletic departments, because the NCAA financial disclosure happens to include a category by this name. Don’t fret. Many times I’ve found the amount reported by an athletic department as support from governmental entities is lottery revenue earmarked for Title IX purposes, meaning it goes to fund scholarships for female student athletes. State and local governments aren’t just cutting checks to athletic departments to fund losses or otherwise bail them out. I looked at a couple of examples in my book, Saturday Millionaires, if you’re interested in learning more about this subject. You can download Chapter 1 for free here.

Any financial numbers I share are from financial disclosures each university files with the NCAA annually. The latest figures are from 2012-2013.

Ask SportsBizMiss

EA Sports NCAA Football 2014 (1)

Are College Football Video Games Coming Back?

I EA Sports NCAA Football 2014spoke with a licensing director at a Power 5 school yesterday about the possibility of college football video games coming back after the O’Bannon ruling. You can see his answer in my latest piece for Outkick the Coverage. Or, if you prefer a podcast, you can check out my latest podcast for a full discussion.

Thus far, EA Sports has not replied to my request for comment.

O'Bannon Does Not Mean

Three Things the O’Bannon Ruling Does Not Mean

O'Bannon Does Not MeanIf you’re not inclined to read my full report on the ruling in the O’Bannon case that came down on Friday, you can probably get away with simply knowing what it does not mean.

  • It does not mean all student athletes are getting cost-of-attendance stipends. In fact, it doesn’t even mean all football and men’s basketball student athletes are getting cost-of-attendance stipends. What the ruling said was that the NCAA cannot set a rule limiting stipends to anything less than cost-of-attendance for football and men’s basketball student athletes. If I were a betting woman, I’d say the NCAA sets the limit for stipends at cost of attendance and allows all student athletes to receive that stipend. Some schools will be able to afford to implement the stipend, some will not. There is no requirement in the ruling that schools must starting funding cost of attendance stipends, merely that the NCAA cannot legislate against it.
  • You’ve probably heard about the $5,000 tied to the trust fund idea. It does not mean every football and men’s basketball student athlete is automatically accruing $5,000 per year in a trust fund to access after graduation or exhaustion of eligibility. What the judge said was that the NCAA cannot prevent schools from offering at least $5,000 per year to football and men’s basketball student athletes (to be placed in a trust for disbursement upon graduation or exhaustion of eligibility). The NCAA will likely set the cap at the minimum $5,000/student athlete/year. Each individual school can then decide if they want to participate, but they are not required to do so. One school might decide on the $5,000 number, another might only be able to do $2,500, and yet another might decide they cannot afford to do anything. Whatever the schools choose, they must implement it equally across a recruiting class. You can’t offer higher-profile recruits more than other recruits. You can, however, change the amount with each new recruiting class.
  • Sadly, it does not mean the NCAA Football video game is coming back. The judge did not rule that football and men’s basketball players could pursue individual commercial sponsorship or endorsement deals. In other words, they can’t sign on their own with EA Sports or Nike or Gatorade or anyone else. The ruling simply forces the NCAA to allow schools to share some licensing revenue with student athletes under the two very limited circumstances explained above. Is still means schools will have to decide to license with EA Sports or other video game producers in order for the games to come back. Student athletes cannot join together and go license their name, image and likeness to create video games, at least not under this ruling.

Saturday Millionaires CTA (1)

O'Bannon vs. Title IX

Are O’Bannon Ruling and Title IX at Odds?

O'Bannon vs. Title IXOne of the most complicated parts of the O’Bannon ruling against the NCAA stems from the fact that Judge Wilken did not have to take Title IX into account when she ordered stipends and trust funds for football and men’s basketball student athletes.

I am not a Title IX scholar or expert, but I did interview about a half dozen of them when I was writing Saturday Millionaires for the chapter on pay-for-play. One big misconception I’m seeing from fans on Twitter this morning is that Title IX only covers equal opportunities for female student athletes. That is not the entire story. Most of you are familiar with what we call the “three-prong test” for Title IX, which does focus on opportunities. However, the three-prong test is just one of three parts of a full Title IX analysis.

The issues I see with the O’Bannon ruling and Title IX come in the second part about athletically-related financial aid and in the third part (the laundry list) where publicity and recruitment are factors.

Would a court consider the new stipend and trust fund for football and men’s basketball players “athletically-related financial aid”? Does it matter that football and men’s basketball players are publicized in more high-profile ways than female student athletes? What about the fact that the new trust fund will be associated with recruitment? Those are questions that will have to be answered.

I want to give you some excerpts from Saturday Millionaires where I explained the three parts of Title IX analysis to highlight where the O’Bannon ruling might be at odds with Title IX. Continue reading

NCAA Loses O'Bannon

What the O’Bannon Ruling Means for the NCAA and College Sports

NCAA Loses O'BannonA federal judge ruled against the NCAA on Friday on the O’Bannon case, which deal with student athletes’ inability to be compensated for use of their names, images and likenesses.

Although the judge dealt the NCAA a blow, and certainly gave student athletes a landmark victory, her ruling was very narrowly tailored. I have a detailed breakdown of the case and the ruling on Outkick the Coverage on FoxSports.com.

College Athletes Can Form A Union: What’s Next?

The regional National Labor Relations Board in Chicago issued a stunning decision Wednesday, granting employee status and unionization rights to college football players at Northwestern University (PDF of decision here).  The decision will almost certainly be appealed to the national NLRB in Washington, D.C., and from there can move over into the federal appellate courts and ultimately the Supreme Court.  While we won’t have a final resolution to this issue anytime soon, the decision issued today was significant and will have immediate impact.

Remember, we’re less than three months away from a trial in the O’Bannon v. NCAA case which has been in the courts since 2009.  A judgment against the NCAA there would no longer allow it to profit off of student-athlete (or should I now call them employee-athlete-students?) images and likeness without compensation.

We also had a new case filed just this month directly targeting the cap on scholarship amounts, demanding that the free market determine what a school may offer a prospective student-athlete.

In January, the NCAA hosted sessions at its convention on the future of Division I athletics.  But the feedback was skeptical and the detail missing.  The presentation reeked of bureaucratic speak such as new committees and task forces.

Now with this NLRB decision, you get the feeling the entire student-athlete / amateurism model is going off the rails.  But what did the decision actually say and how does it apply?

It says the scholarship (walk-ons are excluded) college football players at Northwestern University are employees, and have the right to unionize and collectively bargain for compensation and benefits.  The decision focused mostly on the level of control the school, via its athletic department and coaching staff, has over its athletes.  It covered in depth the athletes’ daily routine, the hours spent on football, and the rules that must be adhered to in order to remain on the team and keep the scholarship.  Special emphasis was placed on the fact the scholarship is contingent on a number of different factors which all ultimately are controlled by Northwestern, the employer.

Northwestern tried to argue that a 2000 NLRB decision involving graduate-students at Brown University should control, and lead to a determination the athletes are not employees.  (I went through a detailed analysis of this last month).  The NLRB said the Brown case did not apply here, and even if it did, the result would be the same.

Presumably, today’s decision would allow other private university athletes to follow a similar path.  The NLRB does not govern public institutions, so athletes at state schools will have to navigate the unionization process in their own state under state law.

To this point, the College Athlete Players Association (CAPA) has not said it will pursue increased financial compensation and/or salaries for performance.  It’s focus has been on better health care as well as some type of structure to receive funds from likeness and image use, as well as sponsorship revenue (i.e. along the lines of O’Bannon case issues).  However, the authority granted by the NLRB today would certainly permit increased compensation to be included in any collective bargaining.

It’s also difficult to read today’s decision and not think it could very easily be applied to many other sports at many different levels down the road.  As I mentioned, the focus was much more on the time commitment of the athletes and the control the coaches and school have over them, rather than the large amount of revenue the athletes in major college football generate.  Many student-athletes in non-revenue sports and at smaller schools are on scholarship, put in the same hours, and are under the same university control.  It will be interesting to see which group of college athletes follows in Northwestern football players’ footsteps.

There are two key dates coming up soon as this process moves forward.  Northwestern must file a list of eligible employees with the NLRB (Chicago) by April 2nd so that an election can take place regarding forming the union.  Then, Northwestern has until April 9th to file an appeal with the national NLRB in Washington, D.C.  It most certainly will do that, and where it goes from there is likely a long, windy road through the federal courts.

Northwestern football players won a victory today.  What remains to be seen is whether, upon further review, the decision is confirmed or reversed.

 

Follow Daniel at collegesportsbriefs.com and @Daniel Hare.

 

 

College Football Super-Division, Penn State and O’Bannon

I wanted to provide some brief thoughts on several hot topics in college sports today, so here we go:

College Football Super-Division

Back in February, I provided some analysis and predictions about the future of the NCAA.  Specifically I discussed the idea of four BCS super- conferences, the possible separation of those schools from the NCAA, and the possible creation of a new football division for the BCS schools.  The jury is still out on super-conferences (though things have stabilized for now with all but the SEC schools granting their television rights to their conferences), and defecting from the NCAA still doesn’t seem to have much momentum.  However the idea of a new football division is picking up steam.

The BCS schools, through the voice of their conference commissioners, are saying enough.  Their aggravated tone and sense of urgency leaps off the page.  No longer will they allow the simple majority of the “have-nots” to out vote them at every turn, on every initiative, and on anything they can’t or don’t want to pay for (stipends anyone?).  A fourth division is coming to an NCAA school near you, and it could be sooner rather than later.  Even the college athletics watchdog Knight Commission came out over the summer with a recommendation that the division be considered.

What does a fourth division mean?  Well, it depends.  Most importantly in my view, it restores some sanity to all Division I football programs and athletic departments.  The idea that schools in the Sun Belt or MAC are on playing the same game as those in the SEC or Pac-12 is ridiculous.  What’s worse, pressuring those schools, administrators, donors/alumni, coaches and athletes to compete with BCS level schools both on the field and in the financial arms race is unrealistic and harmful.

Penn State

The NCAA did something right this week by granting back some of Penn State’s scholarships taken away in the wake of the Sandusky debacle.  It simply had no business wading into criminal matters that it does not legislate; and while this certainly doesn’t make what it did to Penn State right, it provides hope there is at least some clear thinking going on today in Indianapolis.

O’Bannon

As I’m writing this post, news is breaking that the O’Bannon plaintiffs have settled their dispute with two of the three defendants in the case, EA Sports and the Collegiate Licensing Company (CLC).  It appears EA Sports will no longer produce its college football game, though the terms of the settlement were not yet disclosed.  This of course still leaves the NCAA as the lone defendant, and the case against it will presumably continue.

Those of you who have been following the Ed O’Bannon case probably know we’ve been waiting for the big ruling regarding whether or not the plaintiffs will be certified as a class (dramatically upping the stakes).  The hearing on this issue occurred in June, and since then we’ve seen several procedural tactics but nothing too critical to the ultimate outcome of the case.

This week we’ve also seen the NCAA beef up its legal team, as well comment they are prepared to go all the way to the Supreme Court.  This isn’t too surprising at this point in the proceedings; and it will be interesting to see if the tough talk continues if/when the plaintiffs are certified as a class.

Follow Daniel on Twitter @DanielHare and at collegesportsbriefs.com.

Preparing for a post-O’Bannon world

Stewart Mandel has a piece out today on SI.com describing the range of urgency athletics administrators are feeling regarding the O’Bannon v. NCAA case currently making its way through the courts.  For those of you who haven’t kept up with the case, I wrote about it in more detail here.  Essentially, former UCLA men’s basketball star Ed O’Bannon and his co-plaintiffs are suing the NCAA, and other defendants, for not sharing the revenue generated in part by student-athletes both while they are in school (e.g. TV) and afterwards (e.g. video games, archive footage).  If the O’Bannon plaintiffs were to win, or even settle the case in their favor, the current structure of college athletics will be forever altered.

Mr. Mandel profiled University of Southern California athletic director Pat Haden’s concern that the case is by no means a slam dunk for the NCAA, and how he and his colleagues should be preparing for the aftermath if it were to lose the case.  I appreciated Mr. Haden’s comments.  Up until now the little we’ve heard from administrators are the doomsday scenarios spouted off by the likes of Big Ten Commissioner Jim Delaney, who claimed his schools would rather de-emphasize sports and join Division III than go along with any type of pay for play scenario.

Mr. Haden is a lawyer.  He’s been reading the articles from legal analysts and scholars.  He knows the NCAA is vulnerable and the case is soft.  More importantly, he knows the stakes have never been higher.  It reminds me of this Family Guy/Star Wars clip, with Mr. Haden as Darth Vader and NCAA president Mark Emmert as the Empire’s henchman talking about the “invulnerable” Death Star (current NCAA structure).  Mr. Haden is right to be concerned.  He is right to be asking questions.  He is also right to be taking proactive steps to address the possible outcomes, or perhaps look at acceptable settlement options.

The contrast to Mr. Haden is University of Texas athletic director DeLoss Dodds.  He was also quoted in Mr. Mandel’s piece, but with much less concern or urgency than Mr. Haden.  Mr. Dodds seemed to think he and other athletics administrators have “more immediate things to worry about,” and “have no control over (the case).”  In my view, nothing could be further from the truth.  The case exists only because of how the NCAA and its members (of which the University of Texas and Mr. Dodds is one) have constructed the current college athletics model.  If those in power change the model, the case goes away.  And while Mr. Dodds might simply be one person in a massive bureaucracy, he leads arguably the most powerful athletic department in the country, and SI.com recently named him the 8th most powerful person in college athletics (notice Ed O’Bannon ranks #4).  My guess is others will listen when he speaks.

Last week much of the country’s attention was fixed on the Supreme Court’s hearing of two significant same-sex marriage cases.  Reading through much of the post-argument commentary from both sides, it seemed apparent that at some point in the future, though perhaps not as a direct result of these two cases, same-sex marriage will be legal across the country.  I get that same feel about the O’Bannon case and paying student-athletes.  It may not be this case or right now, but at some point in the future college athletes will be paid.  The only question is when the new era is ushered in, and how.  Pat Haden recognizes this and wants to take action; good for him.

Follow Daniel on Twitter at @DanielHare.