U.S. Markets closed

$weet 16: The latest push to pay college athletes


On Wednesday the National Labor Relations Board ruled Northwestern University football players on scholarship are employees of the school and are therefore entitled to hold an election to decide whether or not to unionize. In his 24-page ruling NLRB regional director Peter Sung Ohr said players spending 50 to 60 hours per week on football-related duties during the season could not reasonably be defined as “primarily students.”

It gets worse from there. As proud Northwestern alum Lauren Lyster and I discuss in the attached video, Ohr’s ruling is effectively a point by point dismissal of every ludicrous, antiquated, self-serving line of bull the NCAA has been serving up for decades. Naturally the organization stuck to the party line in response.

“We frequently hear from student athletes, across all sports, that they participate to enhance their overall college experience and for the love of their sport, not to be paid,” wrote NCAA chief legal officer Donald Remy, formerly a partner at Latham Watkins.

Presumably the billions of dollars in annual revenues taken in by the NCAA merely enhances the overall experience of living amid lavishly appointed jets and sky boxes while watching unpaid athletes compete.

Generally speaking unions are a blight on the landscape of commerce, but every so often they have a point. Like baseball owners before free agency, the NCAA has abused its position so egregiously and for so long that it took organized labor to correct the injustice. To avoid becoming the MLB the NCAA will eventually be forced to adopt a model similar to the once used by the International Olympic Committee.

As is the case in college athletics Olympians are competing for love of country and the glory of sport. Since 1988, Olympic athletes have also been competing to drive up the price of their marketing contracts and sponsorship deals. The free market decides how much a player is paid. Michael Phelps is worth an estimated $55 million. The United States Olympic Committee only pays $25,000 per gold medal. Madison Avenue and companies like Subway picked up the difference.

The NCAA is going to fold on organized labor. Players are going to get paid one way or the other. If the old men in bad blazers don’t buckle now they’ll end up paying 17-year-olds eight figure signing bonuses. No one except high school jocks wants to see that happen.

The proactive move is to buckle on the basic rights being demanded by the Northwestern football team and come up with a system that allows players to secure agents and get a piece of the action on the sale of jerseys, pennants and other personalized memorabilia.

The NCAA deserved to lose. The system had to crack. The only shame is it it took organized labor to force the free market into a billion dollar industry.

More from Breakout:
Lululemon soaring; Citigroup getting chopped; investors hitting reset on GameStop
Traders get chopped as march goes out like a lamb
Buckle up, it's going to be a bumpy market: Fahmy