The Excerpt podcast: Billions at stake for NCAA facing lawsuits in 'pay for play'
On Sunday's episode of The Excerpt podcast: The NCAA is facing a new antitrust lawsuit on behalf of student athletes seeking compensation. It's the latest chapter in the ongoing saga over pay for play and just how to fairly compensate athletes at the college level. USA TODAY Sports Project Reporter Steve Berkowitz joins The Excerpt to explain the multiple lawsuits and how they might impact college sports going forward.
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Hit play on the player above to hear the podcast and follow along with the transcript below. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.
Taylor:
Hello and welcome to the Excerpt. I'm Taylor Wilson. Today is Sunday, December 17th, 2023.
The NCAA is facing a new antitrust lawsuit on behalf of student athletes seeking compensation. It's the latest chapter in the ongoing saga over pay for play, and just how to fairly compensate athletes at the college level. To dive deeper into this conversation, I'm now joined by USA Today sports reporter Steve Berkowitz. Steve, thanks for hopping on the Excerpt.
Steve:
Thanks a lot for having me on.
Taylor:
So Steve, I want to just start by looking at some of the recent and ongoing lawsuits involving the NCAA and this kind of pay-to-play concept. There's a new suit against the NCAA and the Power Five conferences that challenges rules around player pay. What's the crux of this case, Steve?
Steve:
The basics of this is that they're challenging now the whole construct of pay for play, the idea that athletes ought to be compensated for providing athletic services to the university.
Taylor:
And there's another case going on specifically around NIL or name, image, and likeness. We've talked about this here on the show before. Can you break down what's at stake here, Steve?
Steve:
Sure. So altogether there are really four pending lawsuits that the NCAA has big concerns about. So there's the Pay for Play case, that's the most recent one. The NIL case that you're referencing is a case that's now pending with the Ninth US Circuit Court of Appeals. Where that case stands is that the damages class or set of damages classes in that case have been certified by the district judge. And as a result of that, because they're seeking damages in excess of, it's $1.4 billion when you have antitrust cases, if it goes before a jury, those damages are tripled. So at stake here is more than $4 billion in what's the NIL case.
There is yet another case in that string of cases that pertains to the Academic Achievement Awards that became available in the wake of the Alston litigation. That was the case that went to the Supreme Court and where the NCAA lost a unanimous verdict. So all of these cases have sort of stacked up on top of one another. And the Alston case really sort of stacked up behind the Ed O'Bannon litigation, which proceeded that.
Elsewhere, the other case that's going on is pending in the Third Circuit, which is a case coming out of Pennsylvania that pertains to whether athletes should be covered under the Fair Labor Standards Act and should be treated as hourly employees and should be paid at least the minimum wage. Sort of similar to work study students who perform a whole variety of jobs around campuses, including selling popcorn at the ball games that the athletes are playing in.
Taylor:
And Steve, the NCAA and its conferences really want to end lawsuits like these through federal legislation. What would this legislation look like?
Steve:
That's a really good question. As far as what the NCAA wants it to look like, they want a component of any kind of a federal bill to include some measure of an antitrust protection. Now, what that looks like remains to be seen. I mean, there are a variety of possibilities.
One could involve an antitrust protection and would protect the NCAA from any lawsuits about the connected changes that they make as a result of that legislation. And it's sort of on a going forward basis.
Now, there was a proposal in the last Congress that included a provision that would provide an antitrust protection to the NCAA on a retroactive basis and potentially would've threatened the pending lawsuits. I don't know whether or not the NCAA is campaigning for retroactive protection. The conferences which are also lobbying Congress and the schools who are lobbying Congress maybe lobbying for that. What that ends up looking like, it's really up in the air because there have been lawmakers on both sides of the aisle that have talked about their particular feelings that either they should or they shouldn't grant this kind of antitrust exemption even on a very narrow basis to the NCAA.
Taylor:
I mean, what's next for that conversation on Capitol Hill? I know there was a hearing just this fall a couple of months ago. Is there real energy from Congress to act on this, Steve?
Steve:
There's a lot of smoke and a lot of action and a lot of arm waving, and there's definitely interest. But converting interest into a bill and then having that bill be able to get 60 votes in the Senate, those are two very different things, and it's hard to say how all of that is going to unwind.
There are a group of senators who are keenly interested in seeing a bill put together: Ted Cruz, Richard Blumenthal, Corey Booker, Jerry Moran, Chris Murphy. I mean, these are folks who have talked about a variety of different federal solutions to this issue on a broader basis, covering a lot of different things.
In the meantime, the NCAA is hoping to go forward with some rule changes pertaining to NIL and trying to bring a little bit of order to the NIL environment. Those rules changes are supposed to be voted on at the convention in January. And in theory, those changes could subject the NCAA to yet another lawsuit. So it's hard to know how all of this is going to end up putting together.
Taylor:
You mentioned maybe another lawsuit. This latest suit we talked about came days after NCAA President Charlie Baker unveiled a proposal that really, Steve could alter college sports involving a new subdivision. What exactly is this proposal?
Steve:
The timing of that lawsuit I think was both coincidental and not coincidental. I mean, you don't put together a 60 or 70 page complaint in three days. So I mean, that lawsuit was being worked on before Charlie Baker said what he said and when he said it.
Now, once he said what he said, did that give additional ammo to the plaintiff's lawyers in that complaint? You bet. No question about it. Because what Baker was talking about, was a concept of creating a new competitive subdivision, presumably within the football bowl subdivision, the biggest, most wealthy athletics programs. And in order to be in that competitive subdivision, the schools would have to be willing to pay at least half of their athletes at least $30,000 a piece through what they were describing as an educational trust fund.
Now, the parameters of that trust fund were very loose. They were very deliberately vague about what that would look like. They're trying to give schools the wherewithal to sort of decide what they want to do and how they want to administer it, and let that sort of process evolve. And Baker wanted to put it out there and then let people have at it. But that's the guts of what he's talking about.
Now, that would have to be done within the construct of Title IX. So you'd have to provide similar funding for male and female athletes depending on the composition of the student population and the athlete population, which are supposed to be basically proportionate unless there are some other things going on at schools. That's one basic way that schools can comply with Title IX. So there are a whole different set of things that are going on there, but that's the main top line thing that Charlie Baker is talking about doing. The idea of essentially paying the athletes to play, that's basically what it is. That the schools would be allowed to pay the athletes simply for showing up every day and doing what they do.
Taylor:
And so Steve, who would potentially lose out under this proposal?
Steve:
That's really hard to say. I mean, there's always been sort of a sky is falling parade of horribles that the NCAA and the conferences and the schools have trotted out through the entire run of this legislation and these lawsuits and all this stuff that's been going on. And they've talked about how fans would turn away and there would be less interest and it would kill the, so-called non-revenue sports.
And to this point, it hasn't happened. I mean, fan interest is as high as it's ever been, certainly for college football. And what kind of impact this would have on schools choosing to drop sports in order to fund football and men's basketball and women's basketball, that's hard to know. And some of that is at the NCAA's control. The NCAA as an association, the member institutions set the minimum sport sponsorship requirements for colleges and universities. And so depending on how you set those numbers, you have to have a certain number of teams in order to compete at a certain level within the NCAA.
Some of this is within the school's control. How this will all wind out in the end, who knows? I mean, the schools keep saying, "Oh, we're going to run out of money. Oh, we're going to run out of money." And then three days later they come up with a new television contract that's going to pay them even more money, and it becomes harder and harder for the NCAA and for the schools to make this kind of case when they're constantly making a new television contract. You're expanding the college football playoff. All of these things generate more and more money.
Taylor:
Yeah. I mean, as you say, Steve, a lot of layers to this conversation. What's the timeline look like going forward around some of these lawsuits and just this general conversation on pay to play in the coming months and years?
Steve:
I mean, I think you're going to see some of this start to come into focus in January because you'll begin to see the NCAA pass these rules on NIL and the basic construct there. What the upshot of that will be is going to be interesting to see.
As far as the lawsuits go, these antitrust cases have really, really long time horizons. I mean, the Alston case, by the time it was decided by the Supreme Court, I believe that case had been going on, I think for like five, six or seven years. So these cases take a long time to go through.
With what's going on in Capitol Hill, it would seem on a realistic basis that something would have to happen before you get too deep into the presidential election cycle because just stuff kind of stops happening on Capitol Hill. So there'll be a window at the beginning of the year where something potentially could get passed. If it doesn't happen then, it probably wouldn't happen in 2024. Doesn't mean that it can't come around again after the election. So that could go on. They've been talking about this on Capitol Hill in a pretty serious way for three or four years.
Taylor:
All right, Steve Berkowitz is a sports project reporter for USA Today. Thank you, Steve.
Steve:
Thanks a lot for having me on.
Taylor:
Thanks to our senior producer, Shannon Rae Green for her production assistance. Our executive producer is Laura Beatty. Let us know what you think of this episode by sending a note to podcasts@usatoday.com. Thanks for listening. I'm Taylor Wilson, and I'll be back tomorrow morning with another episode of the Excerpt.
This article originally appeared on USA TODAY: The Excerpt podcast: Billions at stake for NCAA facing lawsuits
