College sports' employment model debate will soon retake center stage

On the heels of his December reform proposal, NCAA President Charlie Baker told attendees at the association’s annual convention last week that stakeholders are finally talking about the “elephant in the room.”

The potentially landmark proposal – which pushes for schools to be permitted to directly pay athletes – does indeed address a rather large elephant. But an even bigger one is poised to retake center stage in the coming weeks: A potential employment model.

An employment model that could radically reimagine the college sports paradigm is the overarching issue hovering over smaller debates regarding moving NIL activity in-house and allowing schools in a rich-school subdivision to pay athletes from a trust fund – the key elements in Baker’s reform plan.

A growing number of college sports leaders view a coming revenue-sharing model as virtually inevitable. Whether at least some athletes will ultimately be deemed employees of their institutions, and what that would mean for college sports, are larger, existential questions. 

As was evident during the convention, Baker – an effective, down-to-earth communicator and former governor of Massachusetts – is increasingly trying to frame the debate surrounding the consequential employment question. He is focusing on the potential ramifications of such a model and, as he stated in the past, claiming that athletes do not want to be employees.

Expect employment to be part of Congressional hearing 

Expect the rhetoric to ramp up. 

The employee question almost certainly will be raised in Thursday’s Congressional hearing titled “NIL Playbook: Proposal to Protect Student Athletes’ Dealmaking Rights.” 

The hearing will discuss the latest version of reform legislation led by Florida Rep. Gus Bilirakis, a critical figure in the fight for NIL reform on Capitol Hill who said his discussion draft “strikes the delicate balance of preserving the ability of college athletes to profit from their own NIL, while maintaining the amateur status of all college athletics.”

Baker is scheduled to testify at the hearing, along with UCLA quarterback/NIL entrepreneur Chase Griffin, Missouri Valley Conference commish Jeff Jackson and Radford volleyball player Meredith Page.

Of note: While the legislation would check a couple of big boxes for the NCAA in providing some antitrust protection and stipulating that athletes are not employees, it would also prohibit schools from entering into NIL agreements with athletes. That directly conflicts with Baker’s proposal, which pushes NIL activity to move under schools’ umbrellas so schools can enter into NIL deals with athletes.

What’s on the short-term horizon?

The National Labor Relations Board hearing is scheduled to resume on Jan. 22 in which three parties – USC, the Pac-12 Conference and the NCAA – are facing charges that they are joint employers. The complaint alleges they misclassify football and men’s and women’s basketball players at USC as student-athletes and maintained certain rules in the USC Student-Athlete handbook.

How would an employee model impact NCAA?

The NCAA unveiled its proposal in large part to get the attention of Congress, which the association continues to aggressively lobby for a federal bill that would afford the NCAA at least limited antitrust protection and codifies that athletes are not employees of their universities.

But time is running out – and the NCAA knows it. A flurry of drafts of reform bills have circulated in recent months. None has progressed to a vote. 

“To maximize these opportunities [in the proposal], it will be important for Congress to provide special status to student-athletes,” Baker said at the convention, per The Athletic. “That way, schools and conferences can engage in NIL and enhanced educational support without turning them into something they are most definitely not – employees.”

But many leading stakeholders believe that, absent Congressional intervention, we are on a slow march toward an employee model. With that prospect looming over college athletics, what’s the sentiment among athletic directors?

“The sentiment is aversion plus fear of the outcome of college athletes becoming employees,” Casey Schwab, CEO and founding partner of Altius Sports Partners, which works with some 40 universities to educate athletes and athletic departments on NIL issues, told On3 on Tuesday.

“From the college sports community, we’ve heard a lot of commissioners, athletic directors and others speak up about why a wholesale employment model would be detrimental, if not the death knell to college athletics.”

Schwab stressed he was relaying sentiments from industry leaders and that his personal view is not necessarily that dire.

NCAA continues pursuit of antitrust protection

An employee designation for some athletes would usher in an entirely new era, which could include athlete unions and revenue-sharing. At the heart of the NLRB cases – a Boston-based NLRB regional director is also weighing whether Dartmouth men’s basketball players are employees – is the question of how much, if any, control schools exercise over athletes.

Rather than focus his rhetoric on that central element, Baker is choosing to paint a picture of a far less favorable, or enjoyable, landscape for athletes under an employee model. Based on interviews with scores of athletic directors and legal experts, many say an employment ecosystem could be a net negative for athletes. 

Opponents of the model say it could lead to athletes being fired and many schools cutting sports because they are unable or unwilling to handle the additional financial burden.

Shortly before releasing the proposal, Baker told On3, “Making all student-athletes a traditional employee would have tremendous negative consequences: student-athletes let go for a bad performance, or paying taxes on scholarships or room and board, and changing the relationship with teammates or coaches from the positive one enjoyed now to one where employees report to a supervisor.”

However, it is possible for college sports to usher in a world of true revenue-sharing in which athletes receive a slice of enormous broadcast revenue pies without introducing an employee model.

The question for many is how college athletics can get to that sweet spot without welcoming in the largest elephant in the room: The employment model.

One veteran source told On3 last week that many leading stakeholders are saying, “I can be on board with paying athletes, but we’ve got to find a way to be able to do that without having to call them employees. We still need that antitrust protection.”