Employment Rights Expected to Shake Up College Sports Landscape in 2022
By John WallStreet
Name, image and likeness has garnered most of the headlines related to NCAA reform over the last year. That is despite the bulk of NIL deals thus far being relatively insignificant social media or appearance-based tie-ups (at least in terms of dollars spent). The NIL ecosystem will undoubtedly mature as national brands and major agencies enter the space. Group licensing will also raise the stakes. But Casey Schwab (CEO and founding partner, Altius Sports Partners) says there is a greater shift on the horizon that college administrators ought to be focusing on, one that will “completely change the college sports landscape and the economics of it,” he said. “The next wave for conference commissioners, college presidents and athletic directors to grapple with is going to be employment rights.” And he says that wave could wash ashore as soon as 2022.
JWS’ Take: By definition, college athletes are not employees. They are classified as amateurs and sign a social compact (not a binding contract) with their respective universities.
There are several ways that dynamic could change. College athletes could gain employee status via legislation (either at the federal or state level), litigation or the National Labor Relations Board (NLRB), which could deem a group of athletes at a private institution employees (the NLRB only governs private schools and the rights afforded would be dependent on state and local laws). Schwab said all three of those avenues are actively being pursued, and he expects “one, two or all three of those dominoes will fall in 2022.”
Conversations with a pair of Power 5 athletic directors indicated the NLRB domino might be the most imminent threat to the current collegiate model. Back in September, NLRB general counsel Jennifer Abruzzo issued a memo stating that in her view college athletes have statutory rights in line with what employees receive under the National Labor Relations Act. One AD who asked to remain anonymous said he would not be surprised if a group of college athletes were granted employment status within the next 12 months (an unlikely scenario given the process involved).
If that were to happen, it “would be a game changer,” Dave Heeke (director of athletics, University of Arizona) said. Players would gain a multitude of rights and protections under employment law that the schools would have to honor if they wanted to continue playing at the Division I level (think: minimum wages, vacation time, workers’ compensation and FMLA).
But Schwab says most notably, it would give college athletes the ability to form unions and collectively bargain with their universities. And once the negotiations begin, “You’re going to see a collective bargaining agreement that includes revenue-sharing demands in revenue-positive sports, which may eventually change the economic framework of college athletics,” he predicted. To be sure, the people interviewed for this column see reform differently from athlete advocates, and are wary of shocks to the current system.
A potential middle ground does exist, which Schwab says Congress could create. Under that scenario, Schwab says, college athletes would be “pseudo employees or employees for limited purposes, which would entitle them to healthcare and other benefits, but they wouldn’t necessarily get paid salaries.” Both of the ADs we spoke to believe a modified collegiate model (which would allow athletes to retain existing benefits and protections, including a tax-free education, and include some additional benefits or opportunities) is the ideal outcome.
The problem for the NCAA, the conferences and its schools is that the decision will be made for them—and that the timeline is out of their control (of course, they could have addressed these issues long ago). Schwab says college administrators should be “starting to prepare for the change in employment status because it is more imminent than people think. The clearest path to athletes not becoming employees is Congress stepping in and siding with the NCAA, which is less likely than people think.”
While both of the ADs we spoke to said college sports administrators are well aware of the possibility there could be a change in athletes’ employment status, they said few have taken concrete action to prepare for it. Heeke explained that with so many challenges converging on college sports at once (see: NIL, redefinition of the NCAA, conference realignment, CFP expansion, etc.) and so much uncertainty, it is hard to be proactive. “It is certainly a topic of conversation when we’re all together in group settings, whether that is at the conference or national level,” Heeke said. “And there is significant concern this could go down that road. But there are not formulated plans to implement at this point.”