Fair Compensation to Athletes (Employees)


 

Derek Dierkes

MGMT 312 – PAPER 2

March 18, 2014

Fair Compensation to Athletes (Employees)

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 In this case I will be discussing the court case of the National Labor Relations Board and their finding that the Northwestern football players should indeed be considered employees. With the finding that these players are employees it presents the argument that in some instances in NCAA division 1 football and basketball athletes are being undercompensated. This case is the first time that these athletes have been recognized as employees rather than student-athletes or amateurs. Seeing these athletes as employees allows them to form a union that could help them argue that compensation does not have to be limited to tuition, room, board, and books. To further support this finding I will show the revenues and expenses of The Ohio State University football team who like northwestern is a member of the Big Ten Conference, how the NCAA is comparable to a cartel, and how this situation could be supported by the ethical thinking of Rawls, A Theory of Justice.

For this situation I will be summarizing the court case held by the National Labor Relations Board Region 13 involving Northwestern University (employer) and the College Athletes Players Association (CAPA). All of the facts presented in the summary of Northwestern court case come directly from the case. Any lengthy parts taken directly from the case will be shown in quotes with a footnote reverence to the page the quote is from. This case will be broken down and presented in six parts; Overview, Background, Player Rules & Regulations, Player Obligation & Time Commitment, Academic Requirement, and Court Findings(decision).

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Northwestern University Case

Overview

On March 26, 2014 a case was brought to The National Labor Relations Board Region 13. The case involved Northwestern University (employer) and the College Athletes Players Association (CAPA). In this case CAPA was the petitioner. The issue was the petitioner (CAPA) argued that football players receiving grant-in-aid (scholarship) from Northwestern University (employer) were employees and fell under section © of the National Labor Relations Act. Falling under this act would allow the Northwestern football players to choose whether or not they wanted to be represented for the purposes of collective-bargaining. Northwestern University argued that the players are temporary employees who are not eligible for collective bargaining.

Background

Northwestern University is a private, non-profit, university with its main campus located in Evanston, Illinois. The University has an intercollegiate athletic program and is a member of the National Collegiate Athletic Association (NCAA). The school is also a member of the Big Ten Conference and has 19 varsity Division 1 sports, 8 men sports and 11 women, totaling 500 students. Apart of the university’s athletic program is the varsity football team which competes in Division 1 (FBS). The team is made up of about 112 players of which 85 are players who receive football scholarships that pay for tuition, fees, room, board, and books. The total grant-in-aid is approximately $61,000 per year. The players are also able to receive additional compensation from a Student Assistance Fund that can cover expenses like health insurance, dress clothes required to be worn by the team while traveling to games, the cost of traveling home for a family member’s funeral, and fees for graduate school admittance tests and tutoring. The players also do not receive a W-2 tax form from the Employer.

Player Rules and Regulations

Starting in 2012 the NCAA decided to give schools the option of giving football athletes either 1 year renewable or 4 year contracts. The Northwestern Football program has opted for the 4 year contacts. These contracts are referred to as tender. Under NCAA rules the contact can be terminated or reduced for any of the following reasons, if the player;“(1) renders himself ineligible from intercollegiate competition; (2) engages in serious misconduct warranting substantial disciplinary action; (3) engages in conduct resulting in criminal charges; (4) abuses team rules as determined by the coach or athletic administration; (5) voluntarily withdraws from the sport at any time for any reason; (6) accepts compensation for participating in an athletic contest in his sport; or (7) agrees to be represented by an agent.”[1] This decision to whether or not the rules have been broken is left up to the coach. His decision is then reviewed by the Athletic Director. The players are also subject to following the Team Handbook, being approved by the coach to live off campus, being approved by the athletic department to receive additional employment, they must disclose to their coaches detailed information pertaining to the vehicle that they drive, they must abide by a social media policy which restricts what they can post on the internet, including Twitter, Facebook, and Instagram, and the players are prohibited from denying a coach’s friend request and the former’s postings are monitored. The players are also prohibited by the employer to swearing in public, embarrassing the team in any way, and profiting off their image or reputation. They are also required to sign a release permitting the Employer and the Big Ten Conference to utilize their name, likeness and image for any purpose. The players are subject to strict drug and alcohol policies and must sign a release making themselves subject to drug testing by the Employer, Big Ten Conference, and NCAA, and are subject to anti-hazing and anti-gambling policies. Some additional requirements are abiding to a strict dress code for games, freshman must attend six hours of study hall each week, and attend one hour of study hall on consecutive days for each minute late to a practice. In the past five years only two players have lost their scholarship, one for shooting BB gun in a dorm, and another for failing two drug tests.

Player Obligation & Time Commitment

The actual start of the season begins in the first week of August for these players. At this time they will go though one month of training camp. This is known as one of the most grueling times of the year for these players. A normal day of training camp would go as follows; from 6:30-8 a.m. all injured players are to report for medical treatment, from 8-8:30 a.m. they will eat breakfast, they will go to position meetings from 8:30-11 a.m., walk-thru 11-12 p.m., lunch 12-1 p.m., team, group, and position meetings 1-4pm, practice 4-6:30 p.m., dinner, from 8-10 p.m. they will have meetings to go over the days practice and further install, and then bed check is at 10:30 p.m.. They will have about the same schedule all throughout camp, although at times there will be lifts in place of meetings. The first week of training camp is held on campus and then the remainder of camp is at Kenosha, Wisconsin. The estimated time spent per week is 50-60 hours, but can be even more at times.

Once training camp is over the regular season starts, during this time it is estimated that players will put in 40-50 hours a week into football activities, but it can be even more during away games. A normal day will consist of receiving medical treatment, multiple meetings for install and to watch both team film and opponent’s film, lift Tuesday-Thursday only, and practice. All of this is done by 12 p.m. Scholarship players are also required to go to the training table where they receive food. For players underweight this is used to pack on the pounds. For the remainder of the day the payers are required to go to class, and then there are optional 7 on 7 practices and film study later in the in afternoon. This is optional and even though coaches can’t force players to come it is in their best interest to be present. Fridays are different than other days. For away games the players will travel either by bus or plane. For both home and away games there will be around 3 hours of walk-thru and meetings. On game days players are required to be at the stadium 3 hours before the game and most games will last 3 hours. Sunday is the off day for the players and they are only required to check in for injury check and medical treatment. The regular season normally consists of 12 games. If the team makes a bowl game their season is extended by one month where they follow a similar schedule as a regular game week. They are allowed to go home a couple days prior to Christmas, but are required to be back on campus by Christmas day.

After the season is over the players have a two week dead period were there are no football obligations, but they are heavily encouraged to lift during this time. After the dead period there is one month of winter workouts were players are required to do footwork, speed, and conditioning drills for one hour followed by one hour of lifting daily. Scholarship players are also required to go to the training table for recovery supplement and weight gaining. The estimated time spent on football actives is 10-15 hours, but can sometimes be more. Next, there is a one week testing period were players are broken down into groups, tested for conditioning, and have lifting completions. The estimated hours spent on football activities is 15-20 hours, but can sometimes be more. After this players start a two month period of spring ball. A normal day consists of lift, meetings for install and film review, practice, and treatment. Scholarship players are also required to go the training table. The estimated mandatory time spent on football activities is 20-25 hours, but can be more. At the end of spring ball there is a spring game were players are broken down into two teams and play against each other.

After spring ball players are given one week off, but are encouraged to lift. Following the off week players will be required to daily condition and lift one hour each until the end of the academic school year. At the end of the school year players are allowed to go home for a couple weeks, but are encouraged to continue to lift and condition during this time. After a couple weeks off the players are required to report back to campus for summer workouts were they will spend 20-25 hours of mandatory football activities. These activities consist of conditioning, lifts, 7 on 7, and film study. After this time training camp will start again and the process starts over.

Academic requirements

The players are subject to a number of academic requirements. To be eligible players must; “(1) enrolled as full-time students; (2) making adequate progress towards obtaining their degree; and (3) maintain a minimum GPA. For players entering their second year of school, they must pass 36 quarter ours and have a 1.8 GPA. For players entering their third year of school, they must have 40% of their degree applicable units completed and a 1.9 GPA. For players entering their fourth year of school, they must have 60% of their degree applicable units completed and a 2.0 GPA. For players entering their fifth year of school, they must have 80% of their degree applicable units completed and a 2.0 GPA.” [1](pg11)During the regular season layers are not allowed to schedule any classes before 12 p.m. so they do not conflict with football.

Court Findings

                For this case the burden of proof was put on the Northwestern University to justify denying its scholarship football players employee status. Under the common law definition, an employee is a person who performs services for another under a contract of hire, subject to the other’s control or right of control, and in return for payment. [1a] it was found that “players receiving scholarships to perform football-related services for the Employer under a contract for hire in return for compensation are subject to the Employer’s control and are therefore employees within the meaning of the Act.”[1](pg14) Some of the additional reasoning’s for this ruling were the players performed services that benefited the employer ($235 million in revenue generated 2003-2012) and in return the football players received compensation, the players were subject to the employer’s control in the performance of their duties as football players, the players are employees under the common law definition, the players are not “Primarily Students”, their athletic duties do not constitute a core element of their educational degree requirements, academic faculty does not supervise players in athletic duties, compensation is not financial aid, players are not temporary employees within the meaning of the act, the petitioned-for unit was appropriate, and the petitioner is a labor organization within the meaning of the act. Following this ruling the all current scholarship players for Northwestern University will be able to vote on whether or not they would like to form a collective bargaining agreement. Northwester is appealing the ruling and the case will be reviewed by the Board in Washington.

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Exhibit 1 below shows the revenues and expenses for The Ohio State University football program. As you can see the football program generated $ 48.7 million in revenue. With a number of different expenses the program also had $13 million in expenses. This gave left a profit of $35.7 million. The largest expense of $3.7 million is A & P which accounts for the yearly salaries for the coaches. There are three expenses that go directly to the football players which are meals $0.46 million, lodging $0.22 million, and grant-in-aid of $3.4 altogether totaling approximately $4.1 million. I must also mention the $3.4 in grant-in-aid is paid right back to the University. Using these numbers of the $48.7 million dollars of revenue generated 8.4% goes back to the athletes and of that 8.4%, 82.9% of that goes right back to the University as the price of tuition room, board, and books. [4]

Exhibit 1

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[4] “Ohio State’s Football Budget.” N.p., n.d. Web. 18 Apr. 2014.

Looking into the way the NCAA is organized it is very similar to a cartel. By definition, from Investopedia, a cartel is “An organization created from a formal agreement between a group of producers of a good or service, to regulate supply in an effort to regulate or manipulate prices.”[3] Basically after high school if athletes would like to continue their career in football they have no other option than college football. This allows the NCAA to have complete control over how they compensate athletes because they have no competitors. These athletes are highly skilled employees that could not be easily replaced. They also provide a unique service which helps the NCAA generate billions of dollars in revenue. To further back my argument I will refer to a thesis written by Tyler Jacob Andrews titled, Fair Play: An Ethical Evaluation of the NCAA’s Treatment of Student Athletes. One point that is made in Andrews thesis is that these groups (members of the NCAA) go above and beyond standardizing the rules of the came and collude with one another to maximize profits, an example of this is conferences working together to maximize television profits. Another point that is made is that the compensation for the athletes has remained the same while profits have drastically increased. [2]

Next I would like to look at this situation from an ethical point-of-view. From A Theory of Justice, Rawls uses a veil of ignorance to determine justice as fairness. From the reading it states, “Our social situation is just if it is such that by this sequence of hypothetical agreements we would have contracted into the general system of rules for which defines it.”[5] Looking through a veil of ignorance one would assume that Division 1 football players would indeed be seen as employees providing a highly skilled service for the NCAA and there partners. With the billions of dollars that is generated from these highly skilled employees one would assume that they would be fairly compensated for their service. At the least one would think that these players should be compensated for their injuries that were acquired during there playing days even after their time at the university. I think there is also room for argument that they could be paid an actual salary. From looking at the revenues and expenses of Ohio State it was found that the athletes were only being compensated 8.4% of the $48.7 million dollars of revenue, and of that 8.4%, 82.9% of that goes right back to the University as the price of tuition room, board, and books.

Using the terms student-athlete and amateurism the NCAA has been able to create a completely controlled workforce that is subject to their every decision. I chose this case because I think it is a great example of one of many organizations within the NCAA that exploits the use of cheap labor to generate high revenues. While these organizations are not seen as businesses they are run in a way to maximize revenues just like a business would and they have done this off the backs of young athletes. This is the case for many dominate Division 1 football and basketball programs. The cost of tuition at Northwestern is somewhat higher than many schools making their compensation better than most schools though. Being a former Division 1-AA football player I can say from personal experience that this case only briefly demonstrates the physical and mental strains that being a college football player entails. It also does not describe the lasting physical effects the game can cause on these players. This case goes against the notion that these so called student-athletes are students first. It displays this in the ruling that the players are indeed employees that performed services that generated the University millions of dollars. It also proves this by showing that the athlete’s majority of time and primary focus is spent doing football activities.

 

 

Works Cited

[1] 13-RC-121359. The National Labor Relations Board Region 13. 26 Mar. 2014. Print.

[1a] Brown University, 342 NLRB 483, 490, fn. 27 (2004) (citing NLRB v. Town & Country Electric, 516 U.S. at 94).

[2] Andrews, Tyler J. Fair Play: An Ethical Evaluation of the NCAA’s Treatment of Student Athletes. Thesis. University of North Florida, 2013. N.p.: n.p., n.d. Print.

[3] “Cartel Definition | Investopedia.” Investopedia. N.p., n.d. Web. 17 Apr. 2014.

[4] “Ohio State’s Football Budget.” N.p., n.d. Web. 18 Apr. 2014.

[5] Sandel, Michael J. Justice: A Reader. Oxford: Oxford UP, 2007. Print.

 

 

 

 

 

 

 

 

 

 

 

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One thought on “Fair Compensation to Athletes (Employees)

  1. You certainly can document how far from being primarily a student these people are. The fact that none of the athletics is at all part of the educational program of the school is also important.

    But, to me, the solution is not to acknowledge how they are employees. Because in that case we have professional athletes on our payrolls and staffs who take classes. Or do they even do need to take classes? If we acknowledge they are employees first, then why even bother admitting them to the university?

    I know it may seem “impossible,” but to me the only solution is to somehow reclaim the much less intensive role for real amateurs. This may mean the NFL needs to start its own minor leagues to build a reserve labor pool instead of relying on this sham.

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