ADVERTISEMENT

College Scholarship Athletes – Students or Employees

April 2014 Corporate

In a rather remarkable decision, the National Labor Relations Board has ruled that football scholarship athletes at Northwestern University should be considered employees and therefore are to be given the right to unionize and bargain collectively.

The implications of this ruling are enormous and far-reaching, and the ruling seems to raise more questions than it answers.

College athletics—specifically football and basketball – have become billion-dollar businesses. On any given Saturday during the football season, commercial and cable networks are telecasting vast numbers of games.  Football stadiums that seat as many as 100,000 or more fans paying anywhere from $50 to $100 a seat routinely sell out every home game from late August to early December.  Then there are the bowl games and the income from concessions and licensing.

Basketball is another enormous cash cow.  Every night during the basketball season, which stretches from October to late March/early April, games are telecast on commercial and cable channels and the crown jewel of college basketball – the NCAA tournament – is under a multi-billion-dollar contract with CBS and TBS.  In addition, the gate receipts from college basketball – especially in the major conferences – are quite large, not counting additional revenues from game concessions and licensing.

The main reason for the commercial success of these sports is the quality of the competition.  In fact, many fans prefer the college game – both football and basketball – to the professional versions of these sports.

While professional football and basketball players routinely earn six- and seven-figure salaries and are covered by player unions that bargain collectively, college athletes receive compensation in the form of academic scholarships.

It is rather remarkable that Kain Colter, the former star quarterback for Northwestern, initiated the action with the NLRB.  Northwestern has one of the highest graduation rates among Division 1 colleges and, as a private school, the value of the Northwestern full-ride athletic scholarship is worth $76,000 a year.  For a student athlete, who generally has five years of eligibility, that translates to nearly $400,000.  Moreover, Northwestern runs one of the “cleanest” programs in Division 1 and its football coach, Pat Fitzgerald and its basketball coach, former Duke star and assistant coach, Chris Collins, are poster children for everything that is good about college athletics.

Initially, the college players have not said they are interested in pay-for-play so much as other benefits – such as payment for medical expenses resulting from injuries incurred while playing and for protecting against loss of scholarships, which can be eliminated at the whim of a coach.  However, it doesn’t take a rocket scientist long to see where this will lead.

And let’s look at some of the implications.  For one thing, should unionization be limited to just football and basketball players or for all student athletes on scholarship?  What about female athletes? For every athletic scholarship given to a male athlete, there are as many given to female athletes due to the Title IX ruling.

What will be the form of compensation if it happens?  There are many stories about athletes who are given tuition, room and board, books, fees, et cetera, but don’t have any spending money if, say, they want to go out for a pizza.

This whole issue is in its infancy.  Northwestern is appealing the NLRB ruling.  However, the NLRB has made a major decision in principle with enormous implications.



About the author

James T. Berger, Managing Editor of The Wiglaf Journal, through his Northbrook-based firm, James T. Berger/Market Strategies, offers a broad range of marketing communications, research and strategic planning consulting services. In addition, he provides expert services to intellectual property attorneys in the area of trademark infringement litigation. An adjunct professor of marketing at Roosevelt University, he previously has taught at Northwestern University, DePaul University, University of Illinois at Chicago and The Lake Forest Graduate School of Management. He holds degrees from the University of Michigan (BA), Northwestern University (MS) and the University of Chicago (MBA). Berger is an often-published free lance business writer who has developed more than 100 published articles in the last eight years. For more information, visit www.jamesberger.net or telephone him at (847) 328-9633.

James T. Berger
More by James T. Berger