Alston v. NCAA: Athlete Scholarships Fight may go to Supreme Court

Alston v NCAA

Those who wonder why there is such a strong push for college athletes’ rights must look no further than the latest development in the Alston v. NCAA (Alston) case. In Alston, former and current college athletes challenged the NCAA’s amateurism rules on antitrust law grounds. Specifically, the plaintiffs challenged the NCAA’s rules capping grants-in-aid to cost of attendance. The plaintiffs argued that there were less restrictive ways that the NCAA could preserve amateurism. The District Court agreed. The District Court judge ruled that the NCAA could no longer restrict education-related benefits to college athletes. Then the court issued an injunction prohibiting the NCAA from doing so. Education-related benefits include items such as computers or musical instruments. However, the NCAA retained the ability to restrict non-education related benefits. Non-education related benefits include cash payments that may amount to pay-for-play.

Although the NCAA retained the right to prohibit pay-for-play in college sports, the NCAA appealed to the Ninth Circuit Court of Appeals. There, the three-judge panel affirmed the District Court’s decision. The appeals court was scheduled to issue the mandate precluding the NCAA from restricting education-related benefits to college athletes on July 8, 2020. However, on July 6, 2020, the NCAA sought to have the appeals court stay the injunction. The NCAA wants to stay the injunction so they can petition the case to the United States Supreme Court. That is right! The NCAA does not want to allow college athletes to receive extra educational benefits for their athletic prowess. For those who may not understand why there is such a big push for college athletes’ rights, the NCAA actions in the case are precisely why.

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This Case Proves yet Again that the NCAA Cares More About Protecting College Athletics Revenue than Protecting College Athletes

The NCAA does not want to allow its “student-athletes” to receive unlimited educational benefits. They would rather spend time and resources petitioning this case to the Supreme Court. It is amazing how the NCAA can put so much energy into this but leave the schools to fend for themselves in regards to COVID-19 and college athletics. Since the NCAA allowed voluntary workouts to resume on June 1, 2020, athletes at several schools have tested positive for the virus.

With no leadership from the NCAA, Schools are essentially creating a patchwork of guidelines and rules to address COVID-19 and resuming college athletes. However, the NCAA advocates tooth and nail that a patchwork of various state laws addressing college athletes’ names, images, and likenesses will not work and will lead to confusion. COVID-19 has already claimed the lives of over 130,000 Americans. Somehow the NCAA thinks schools should be left to their own devices and handle COVID-19 on their own.

The NCAA’s lack of a unified response has led schools to create documents that amount to a liability waiver for COVID-19. Athletes are required to sign them if they want to resume their sport. Some schools like Ohio State University claim that the document is not intended as a legal document. However, there is plenty of language in the documents that could have legal significance later on. COVID-19 could have a direct effect on college athletes’ health and wellness. The NCAA is again seeing its way out of issues related to athlete health and well-being. However, the NCAA is remaining steadfast in its quest to ensure that college athletes do not receive anything more than the NCAA wishes to give them. That is precisely what the NCAA is doing in its quest to petition Alston to the Supreme Court.

What Exactly is the NCAA Hoping to Achieve by Staying the Injunction to Petition Alston to the United States Supreme Court?

It appears that the NCAA wishes to have the Supreme Court rule that the NCAA’s amateurism rules should not be subject to scrutiny under antitrust law. This should come as no surprise. The NCAA has made it clear that they do not want to be subject to antitrust law anymore.

The NCAA’s Attempt to Persuade Congress to grant it an Antitrust Exemption

In April, the NCAA asked Congress for an antitrust exemption. They made this request when they released their name, image, and likeness report. In the report, the NCAA addressed the numerous antitrust lawsuits that the NCAA has faced over the years. The NCAA essentially plead to Congress that the lawsuits impede the organization’s ability to address the pressing issues facing college athletics. Accordingly, the NCAA wants Congress to grant it an antitrust exemption. If that does not work out, the NCAA appears to be seeking a similar result from the United States Supreme Court.

The NCAA is Planning to Persuade the Supreme Court that any Challenge to Amateurism Rules Based on Antitrust Law Must Fail

Generally, there are three circumstances in which the Supreme Court will review a case. One is where a lower court decision conflicts with a Supreme Court decision. Another is where there are two more conflicting decisions amongst the Circuit Courts of Appeals or a state court of last resort. The third is where the issue involves important questions of federal law. The NCAA asserts that the Ninth Circuit’s ruling conflicts with the rulings of the Supreme Court. The NCAA also asserts that the Ninth Circuit’s ruling conflicts with three other Circuit Courts of Appeals. Specifically, the NCAA argues that the Ninth Circuit’s ruling conflicts with the Supreme Court decision in NCAA v. Board of Regents of the University of Oklahoma.

Brief Summary of NCAA v. Board of Regents of the University of Oklahoma

In that case, the University of Oklahoma Board of Regents sued the NCAA over television broadcasting rights. The University of Oklahoma Board of Regents argued that the NCAA’s rules regarding the broadcast of college football games violated federal antitrust law. The Supreme Court found that the NCAA’s television broadcasting rules did in fact violate federal antitrust law. While the NCAA lost, the Court acknowledged that the “NCAA plays a critical role in the maintenance of a revered tradition of amateurism in college sports“. The Court further stated that the NCAA “needs ample latitude to play that role“. It is exactly this language that the NCAA plans to amplify when they petition Alston to the Supreme Court.

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The Bulk of the NCAA’s Motion Centers on The Aforementioned Points

In their motion, the NCAA asserts that the Ninth Circuit’s ruling conflicts with the Supreme Court’s aforementioned assertions in the Board of Regents case. The NCAA also asserts that the Ninth Circuit’s ruling conflicts with the Third, Fifth, and Seventh Circuits rulings on similar issues. Those circuits have all held that since the NCAA “needs ample latitude” to preserve college sports that any challenge scrutinizing the NCAA’s amateurism rules conflicts with the Board of Regents’ decision. The NCAA argues that the Ninth Circuits ruling in Alston creates a split between the circuits that it wishes the Supreme Court to resolve.

The NCAA also asserts that there are important questions of federal law to be resolved. They further assert that the injunction will cause irreparable harm to college athletics in terms of budget and competitive balance.

Hopefully, The NCAA is Not Granted a Shield Against Antitrust Law

Hopefully, the NCAA is not granted any antitrust law protection. After all, it is one of the only avenues current and former college athletes have to advocate on their behalf. It was not until the O’Bannon case that the NCAA agreed to allow college athletes to receive scholarships up to the cost of attendance. The O’Bannon case was bought on federal antitrust law grounds. The case gave current and former college athletes one of their biggest wins yet. College athletes must retain the ability to advocate for their rights. It is for these reasons that there is such a big push for college athletes’ rights. The NCAA clearly cares more about protecting capitalism, not doing what is best for college athletes.

NCAA Suffers Blow In Alston v NCAA Scholarship Cost of Attendance Case

Alston v NCAA

Late last month, the NCAA suffered another blow to its amateurism model. The United States Court of Appeals for the Ninth Circuit affirmed the district court’s ruling in Alston v NCAA that the NCAA’s restriction on education-related benefits for college athletes violated federal antitrust law. During the trial in 2018, college athletes forced the NCAA to defend its farce of amateurism.

What is Amateurism?

The NCAA’s amateurism rules preclude college athletes from receiving any pay for their athletic skills. The amateurism rules are the outgrowth of the idea that athletes should only play for the love of the game. It is this concept that the NCAA implores to carry out its mission. The NCAA’s mission is to “maintain intercollegiate athletics as an integral part of the student body and, by doing so, retain a clear line of demarcation between intercollegiate athletics and professional sports”. The NCAA uses this concept to further its mission. It does this by ensuring that college athletes do not receive any payment that is not approved by the NCAA.

Somehow the NCAA believes that making sure college athletes do not receive any pre-approved payment is sufficient to keep college sports separate from professional sports. The NCAA conveniently ignores other facets of college sports that are very akin to professional sports. Those facets include coaches’ million-dollar salaries, the billion-dollar television broadcasting deals, and the multi-million-dollar sports facilities on various college campuses. To the NCAA, the only thing that would professionalize college sports is paying the actual people who make all of the revenue possible. Fortunately, college athletes have begun to have enough of the system that intentionally leaves them out of the revenue sharing. College athletes challenged the system during the Alston v NCAA trial where they chiseled away at the sham of amateurism.

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Alston v NCAA District Court Trial

During the trial, college athletes challenged the NCAA’s amateurism rules by arguing that the NCAA has violated federal antitrust law. An antitrust law violation occurs when an organization conspires to place a restraint on trade in a free market. The plaintiffs, in this case, argued that the NCAA did just that through their amateurism rules. Specifically, they argued that the NCAA’s rules limiting college athletes to cost-of-attendance scholarships violates federal antitrust law. Additionally, the college athletes argued that there were other less restrictive ways that the NCAA could meet its goal.

The NCAA conceded that the rules in question did in fact violate federal antitrust law. However, the NCAA contended that their rules served two procompetitive purposes. Specifically, the NCAA argued that their rules were necessary to retain consumer interest in college sports. The NCAA contended college athletes being unpaid is what keeps college sports separate from professional sports. They argued that it is this separation that drives consumer interest. Additionally, the NCAA argued that its amateurism rules were necessary to keep college athletes integrated into the greater college campus community.

Ultimately, the District Court ruled that the NCAA was violating federal antitrust law with its blanket prohibition on payments beyond a cost-of-attendance scholarship. The court ruled that the NCAA could serve their procompetitive purposes using a less restrictive means. Accordingly, the court ruled that the NCAA could no longer restrict benefits given to college athletes that are tethered to education. Such benefits include things like computers and musical instruments. These types of benefits help further college athletes’ pursuit of their education.

The NCAA Can Still Restrict Non-Education Related Benefits

However, the NCAA may still restrict payments above a cost-of- scholarship that is not tethered to education. Therefore, the NCAA is still able to serve its procompetitive purpose of keeping college sports separate from professionals by ensuring college athletes do not receive any non-education related benefit.

The Appeals Court affirmed the District Courts Decision

While the NCAA did not completely lose the District Court case, they still appealed. On appeal, the court considered whether the District Court erred in their ruling. However, the appeals court affirmed the lower court’s decision. The court reasoned that the NCAA could keep college sports separate from professional sports while allowing college athletes to receive unrestricted education-related benefits. The court further reasoned that it would not adversely affect consumer interest in college sports. When the NCAA allowed college athletes to receive cost-of-attendance scholarships, that did not adversely affect consumer interest in college sports, as the NCAA originally said it would. As such, the court affirmed that allowing the NCAA to limit non-education related benefits while requiring the allowance of educational benefits was a reasonable balance that would allow the NCAA to further its mission.

Alston v. NCAA: Judge Rules for Plaintiffs But NCAA Keeps Amateurism

Alston v.NCAA ruling on student athletes educational benefits

On March 8, 2019, amid the March Madness excitement, the highly anticipated ruling in the Alston v. NCAA case was released. In what appeared to be a victory for the plaintiffs, the NCAA still managed to come out essentially unscathed. Judgment was entered in favor of the plaintiffs. However, the NCAA was, unfortunately, able to retain a substantial amount of discretion over student-athlete compensation. Even though the plaintiffs won, the NCAA did not exactly lose.

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In the 104 page ruling, the court willingly acknowledged the disparity between what student-athletes receive in comparison to what coaches, the NCAA, and other college sports administration officials receive. However, that acknowledgment was not enough to make the court fully strip or severely limit the NCAA’s authority over student-athlete compensation that is unrelated to education. Thus, proving the courts’ and the general public’s inclination to refuse to acknowledge that there really is nothing “amateur” about college sports.

Alston v. NCAA Summary

Last fall, Judge Claudia Wilken presided over the Alston v. NCAA case. Judge Wilken also presided over the Obannon v. NCAA trial. In Alston, the plaintiffs included several current and former student-athletes. The defendants included the NCAA and eleven of its conferences that participate in FBS Football and Division I Basketball.

The plaintiffs challenged the legality of the NCAA and its’ member institutions practice of capping grants-in-aid at the cost-of-attendance based on federal antitrust laws. Contrarily, the defendants contended that the rules were necessary because they served several procompetitive purposes permissible under federal antitrust laws. However, only two procompetitive purposes were discussed at trial.

The Procompetitive Purposes Discussed at Trial

The first procompetitive purpose discussed at trial was that the rules were necessary to protect and promote amateurism and retain consumer interest in college athletics. Specifically, defendants argued that fans only engage in college sports because it is distinct from professional sports and that distinction is predicated on the fact that college athletes do not receive payment.

The second procompetitive purpose discussed at trial was that the rules were necessary to promote student-athlete integration into the greater college campus. Specifically, defendants argued that if student-athletes were paid above a cost-of-attendance scholarship other students would essentially become jealous and harbor resentment. The plaintiffs offered three alternatives to the current system. The court accepted a modified version of one of them.

The Alston Ruling

Judge Wilken ruled that the NCAA can no longer “limit compensation benefits related to education.” The ruling also mandated that the NCAA allow conferences to create their own rules and policies for scholarships. Essentially, the ruling will allow student-athletes to potentially receive a scholarship valued at greater than a “full ride” to college.

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Additionally, the NCAA will not be allowed to limit benefits related to education that is not included in the cost-of-attendance. Those benefits include items such as computers and musical instruments. In sum, the NCAA is no longer allowed to limit education-related benefits for student-athletes. This part of the ruling is essentially a win for the Plaintiffs. However, the ruling is not a total loss for the NCAA.

The Small, Yet Major Victory for the NCAA

The court found value in the defendants’ argument that the rules were necessary to serve the procompetitive purpose of keeping college sports distinct from professional sports. The defendants did not provide a clear definition of amateurism. However, the court reasoned that the distinction lied in the fact that college athletes are not paid unlimited sums unrelated to education.

With that, the court allowed the NCAA to maintain its ability to limit non-education related benefits for student-athletes. The NCAA is even permitted to define what “related to education” means. Thus, giving undue value to the NCAA’s farce of amateurism and the mythical distinction between college and professional sports.


Why do People Ignore the Other Similarities Between College and Professional Sports?

In response to the Alston ruling, the NCAA’s chief legal officer Donald Remy released a statement. Mr. Remy stated, “the decision acknowledges that the popularity of college sports stems in part from the fact that these athletes are indeed students who must not be paid unlimited cash sums unrelated to education.” This statement re-enforces the NCAA’s argument that rules limiting payment to college athletes are necessary to serve the procompetitive purpose of keeping college sports distinct from professional sports. However, is college sports really distinct from professional sports?

College Sports is not Very Distinct from Professional Sports

Aside from college athletes not being paid like professional athletes, there is no real distinction. For example, Division I college football and basketball garner very similar media deals that professional football and basketball garner. The March Madness tournament generates a billion dollars in revenue for the NCAA. Likewise, the NBA playoffs and Finals generates billions of dollars for the NBA. College football generates billions of dollars for the schools and the conferences. Professional football generates billions of dollars for the NFL and team owners. The coaches make millions in college sports, just as the coaches make millions in professional sports.

Given all of those similarities between college and professional sports, how can anyone claim that Division I college sports are largely distinct from professional sports? Why is payment unrelated to education the crux of the distinction between college and professional sports? Division I college sports resembles professional sports in almost every other way. However, the NCAA is still allowed to claim a distinction based on lack of payment to the athletes who propel the industry. Why are the courts and the public so willing to ignore the other similarities and give deference to a distinction that is largely predicated only on lack of payment?

The NCAA Fights Congressional Bill to Pay College Athletes

Congressional Bill Student-Athlete Equity Act name likeness

On March 14, 2019, Congressman Mark Walker of North Carolina introduced the Student-Athlete Equity Act. The Act purports to amend the tax code so that amateur sports organizations such as the NCAA can no longer strip student-athletes of their publicity rights. Publicity rights are a person’s right to control the commercial use of their name, image, and likeness. Currently, college athletes are required to relinquish control of those rights when they agree to engage in a collegiate sport.

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If signed into law, the Student-Athlete Equity Act would return those basic rights to college athletes. Doing so would go a long way in the pay-for-play debate. Opponents of paying college athletes argue that there simply is not enough money. They further contend that paying college athletes would bankrupt the schools. Opponents also argue that such payments could lead to issues with Title IX compliance.

With these concerns, it would seem that allowing college athletes to profit off their name, image, and likeness would be a no brainer. This simple modification would move the needle forward in creating a more equitable college athletics system. However, the problem lies in the fact that the NCAA does not sincerely wish to create a more equitable system. They demonstrated this in their response to the Student-Athlete Equity Act.

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The NCAA’s Response to the Student-Athlete Equity Act

In the response, the NCAA further affirmed its true purpose; protecting amateurism. The NCAA reaffirmed its contention that in order to protect amateurism, college athletes must not receive any benefit that is “untethered to education.” The NCAA called the bill unnecessary. The organization further argued that the bill “may only benefit a small number of student-athletes and cause unintended consequences and negatively impact opportunities for all other college athletes.” This assumption was a major leap. How does the NCAA know who will benefit from the legislation? The answer is that they do not know. The NCAA’s fear is that it may actually benefit college athletes and expose amateurism for the farce that is.

The Bill Could and Most Likely Will Benefit the Majority of College Athletes

Restoring the publicity rights of college athletes would be moneumental in remedying the injustices in the college athletics system. It could finally give college athletes a viable stake in the billion dollar industry their labor propels. College athletes would be able to garner endorsement deals from companies like Nike, Adidas, or Gatorade. Additionally, college athletes would be able to garner endorsement deals with local businesses in the towns their schools are located.

Many areas where colleges are located are regarded as “college towns.” Almost everyone in the town feels a kinship towards the school and its teams. Accordingly, it is highly likely that local businesses would offer endorsement deals as well. These types of opportunities would go a long way to help every college athlete. Local companies may even offer endorsements to lesser-known college athletes. Specifically, those that attend local Division II and Division III colleges. Those schools tend to have a strong local presence and connection with the local community.

With the plethora of possible opportunities, it difficult to understand why an organization that claims to work for the college athlete’s best interest would be so against it. Especially, when allowing college athletes to profit off their name, image, and likeness would not cost the schools nor NCAA any extra money. Furthermore, it does not present any Title IX issues. It would seem that the NCAA would view the Act as a positive and as an opportunity to teach college athletes important life skills.

The NCAA Should View the Act and a Positive and as a Teaching Opportunity

The NCAA and its member institutions could introduce college athletes to a whole new world. The world of financial empowerment. With endorsement opportunities, the NCAA and the schools could teach college athletes about contracts and how to negotiate. They could teach college athletes about financial planning and how to invest. In short, the NCAA could teach college athletes life skills to help them best use their endorsement money and the future earnings from their highly valued degrees.

Together with the earnings from their endorsements, the earnings from their degrees, and their financial literacy training, college athletes would be in a position to truly experience upward mobility and build wealth. Implementing these sorts of initiatives would go a long way to push the NCAA’s student-athlete welfare agenda. Will this ever happen? Probably not, because the NCAA’s primary concern is preserving amateurism.

Interview w/Ricky Volante: Historical Basketball League Plans to Disrupt NCAA

Historical Basketball League

Educate and Compensate

Should college athletes be paid? The Historical Basketball League says yes. The HBL is a start-up basketball league that plans to disrupt the NCAA’s current economic model. It was co-founded by sports and entertainment attorney Ricky Volante and economist Andy Schwarz. The HBL plans to totally disrupt the NCAA’s system. Their aim is to give “basketball athletes a unique US-based opportunity without economic and academic exploitation.” With its inaugural season set for 2020, the HBL plans to pay their players their market value while ensuring they receive a quality education.

There are college sports fans on both sides of the debate about compensating college athletes. Opponents contend that an athletic scholarship is a sufficient compensation for the hard work that college athletes put in. They also contend that college athletes who wish to be paid should simply play where they can receive payment. Whereas, supporters contend that an athletic scholarship is not enough compensation for the billion dollar industry that the labor of college athletes propels. Until recently the only such option was to play in a professional league in another country.

In November, the HBL announced that former two-time NBA Champion David West would be joining the league as its first Chief Operating Officer (COO).  In light of this announcement, I interviewed Ricky Volante to get more insight into the HBL and exactly how it plans to take over the college basketball market by educating and compensating the players.

Kassandra: First, before we dive into the Historical Basketball League could you tell me a little about yourself?

Ricky:  I started off as an attorney based in Cleveland, Ohio working with individuals and issues related to sports, film, and music. I got the opportunity to work with a number of athletes during their professional careers. While in law school, I worked with one of the mid-major five conferences. There, I got the opportunity to see how things worked within the enforcement side of the NCAA’s amateurism rules. Those two experiences were a driving factor for me getting more involved with college sports and led to Andy and me connecting.

Kassandra:  Could you briefly explain what the Historical Basketball League is?  What Prompted you and Andy Schwarz to create the league?

Ricky:  Essentially we are building the Historical Basketball League to become the primary opportunity starting with men’s college basketball players. Initially, Andy and I came together to write an article analyzing the O’Bannon decision. During that time, we both realized a similar passion related to bringing about change within college sports. He then shared with me the original iteration of the HBL. He thought it was a way to bring about change by putting it into economist terminology.

The way he presented it was that you break up an economic cartel in four ways.  Number one is legislation. It simply is not going to happen legislatively given the current political climate. Furthermore, legislation is not going to be drafted to benefit predominately black college athletes.  Number two is litigation.  He [Andy] has been involved in White v NCAA, Obannon v NCAA, and now Alston v NCAA. In various ways, those litigations have chipped away at little pieces of the amateurism mold. However, there have not been wholesale changes to the very foundation.

Number three is an organization or unionization. This failed at Northwestern. The NLRB (National Labor Relations Board) punted on the decision and did not allow the Northwestern players to unionize. Accordingly, there are additional restrictions for students at a public university to try to unionize. Therefore, for now, that door seems closed. The only option left [to break up an economic cartel] was competition. We decided to form a league that would compete with the NCAA. Initially, we were focused on that competitive element maybe bringing about change to the NCAA. However, we have now shifted into a focal point of replacing them as the primary option for college basketball players.

Kassandra:  What is the structure of the league and how will it operate?

Ricky:  We will be structured as a single entity.  Therefore, all of the players will be employed by the HBL.  The teams will be owned by the HBL. There will be a centralized leadership group as opposed to the traditional ownership model that is employed by the NFL, NBA, MLB, and NHL.  For those who may not be aware, there are other single entity leagues. The NBA G-League, Major League Soccer, and Major League Lacross are single entity leagues. We are by no means inventing the wheel, we are just utilizing what is already in existence to our benefit.

There are a few reasons for doing that. One is that we want to have controlled sustained growth as opposed to the rocketship mentality of let’s see how high and how far we go and how fast we can get there.  That [mentatilty] has been the main reason for start-up leagues to ultimately crumble and fail when they try to compete with a long-standing incumbent such as the NCAA.

For both legal reasons and from a business standpoint, we wanted to have that single entity structure in place. Our league is going to be comprised of teams operating out of various cities across the country that will be closely located to a number of universities that will ultimately be providing the educational piece of our player’s compensation package.

Kassandra:  The HBL has chosen 20 potential cities to host HBL teams. How were the potential Cities Chosen?

Ricky:  We looked at a range of factors.  First and foremost we wanted cities that would be beneficial and attractive to players to live in.  Second, we wanted the teams to be in close proximity to a number of universities. With the model we are using there is no one to one match. For example, our Cleveland, Ohio team could have players [attending] Cleveland State, Case Western, Akron, and a number of other universities.  We wanted to create as many options for the players as possible. The available schools would likely play a factor in the player deciding what city to play in. Therefore, if a player always wanted to attend a certain school that player would pick the city that is closest to that school.

Also, we wanted to pick cities that we felt would be attractive to team operators, potential sponsors, and that would create an opportunity for us to grow the revenue of the league as we continue to develop.

Kassandra:  How will the final cities be selected?

Ricky:  The cities will be narrowed down from 20 to 12 on a first come first serve basis.  We are reaching out to potential team operators. Potential team operators are reaching out to us.  A team operator will be a shareholder of the HBL. The team operator will control certain elements of the team, but will not own the team.  The team operator will have access to certain other rights.  Team operators will have input on venue selection, jersey design, team name, and other things depending on how early they get involved.

Kassandra: Being that we are both from Virginia, I have to say I am pulling for Richmond, Virginia.

Ricky:  I am too. We also considered the saturation of the sports market in particular cities when we selected the potential cities.  Richmond only has a minor league baseball team and a number of universities. These facts made it sort of a perfect option for us. The city has gone through a lot of renovations in terms of infrastructure, transportation, and investment in certain developments in the area. It is a much more attractive city to live in now. However, it does not have a major sports team to latch on to as a city. This is why Richmond is one of our primary choices even though people may not think of it as a first thought city when it comes to sports.

Kassandra:  Originally the HBL wanted to get schools, specifically Historically Black Colleges and Universities (HBCUs) to participate in the league. Is that still a goal?

Ricky:  We wanted to keep the HBCU element alive as best we could.  Selecting cities that were near HBCUs was another factor we considered. Our southeastern cities are areas where HBCUs are clustered together. However, this is a pretty drastic shift from what the original plan was where the teams would be the universities’. That plan is long since gone.  We ultimately decided that as the new entrant into the market we needed be agile and able to move very quickly. For good reason, institutions of higher education do not have that ability because there is a lot of bureaucracy and red-tape. We decided that to create the best atmosphere and product for our players, we did not want to have the direct involvement of higher education in our leadership team.

However, we do still view institutions as a huge resource and opportunity for our players from an educational standpoint. It is essentially divided up. Universities are going to handle the educational side. We will handle the commercialized sports side. Everybody gets to stick to their strengths. In short, is there a direct link to HBCUs in our current model? No. However, we picked cities with that [HBCUs] in mind. Hopefully, a number of our players will be attending HBCUs while playing for the HBL.

Kassandra:  Since you moved away from the schools to the city model, what are the Title IX ramifications? Are there any?

Ricky:  I suppose we will not have the answer until we are truly up and running. As of today, we are very comfortable with the idea that the money we put into scholarships for our players is unlikely to be subject to Title IX. However, if it is we are not shying away from the possibility of doing a matching donation to an institution. However, I do not think it will be a problem.

Kassandra:  What has been some of the challenges in creating the HBL?

Ricky:  Undercapitalization is the biggest challenge for any startup, and we are no different.  However, with the addition of David [West], we are very quickly getting over that hurdle. Our biggest hurdle to date was the question of  – who is your basketball person? Andy, myself, the advisory board, and others who have been involved have great minds within sports business. However, no one played in the NBA or played college basketball as far as I am aware.  This was a continuous criticism. We were faced with the question of how could we look a family in the eye and say we know what is best for you in your basketball career? Therefore, it became my primary focus to answer that question.  David was at the top of my short list from day one.

Kassandra:  How did you get David West involved? What do you hope to gain from his involvement?

Ricky: I believe I waited all of seven minutes after he announced his retirement to begin the reach out process. We were very lucky to get him on board. Now we are able to say don’t take it from us, take it from this gentleman who played four years at Xavier, who had a successful 15-year career in the NBA, and who is a two-time NBA Champion with a college degree. 

Furthermore, David and his brother run one of the top AAU programs in the country. Therefore, he is intimately tied to the grassroots basketball community at the high school level. He is a “pros pro.”  You can ask anybody in the league whether, in the front office or players who played with or against him, everyone has a great deal of respect for David.  David thinks holistically about the development of players, bringing together both the basketball and educational side. David checks a lot of boxes that we did not have checked before getting him on board.

Kassandra:  Are there any other big names to fill any other positions in the works?

Ricky:  I do not know about filling positions per se within our leadership team.  However, as far as the next big names go, we are primarily focused on the first team operator, first team coach, and the first player.  We want to make big splashes with each of those firsts.

Kassandra:  Do you foresee issues with getting athletes interested in the HBL with the NBA G-League’s new program?

Background: This fall the NBA announced an alternative to college basketball for elite men’s basketball players. Elite players will have the option of receiving a “select-contract” valued at $125,000 to play in the NBA G-League.

Ricky: I do not see it as an issue for us. Most people have portrayed this as a potential negative for us, but I view it as a positive.  First and foremost, it proved that our compensation range is right on the mark. We were publicly saying that $50,000-$100,000 would be our salary range.  We had internally discussed exceeding $100,00 in the right situation.   Shortly after the G-League announced the $125,000 “select-contract” we announced our maximum salary range would increase to $150,000. In a way, it set the market for us and validated what we were thinking from an economic and business standpoint.

I appreciate the G-League providing another option for players, but it is still playing into the false choice of education or compensation. We are focused on education and compensation. Being that we are offering education and a higher maximum salary than the G-Leauge, we will be an attractive option to players. When you compare the cities that we are going to be in with the cities that the G-League is in, our cities will likely be more attractive to players looking to build a brand.

Kassandra:  The players will be able to be represented by agents. Is the HBL going to have its own certification process for agents?

Ricky:  We are going to have a certification program for HBL agents. Agents often get a bad reputation. There are some bad apples out there. However, not all agents are bad. Since the players are at a very vulnerable time in the life, we are going to have protections in place. We are going to do our best to protect the players.  Also, we are going to have a certification process for financial advisors as well. The NFLPA has a registration system for financial advisors, and we will have a similar program to ensure that we know who is helping with the financial management of our players.

Kassandra:  Where do you see the HBL in five years?

Ricky: I would like to see us up to between 24 and 30 teams.  I would like to see us crossing into at least the $500 million and potentially 1 billion dollar threshold in terms of revenue generated by the league. Hopefully, by year five, we will be the primary destination of 50 or more percent of the top 25 players every year from every recruiting class.

Also, five years down the road our first recruiting class will have graduated. Hopefully, every one of our players whether in the NBA, in an international league, or doing something outside of basketball will be having a successful career. An outcome for us is not limited to success in the NBA. If we have a player who plays for us for five years and graduates with a four-year degree and a master degree who starts his own business with the salary received from the HBL, that would be a wonderful outcome as well.

Kassandra: What is the HBL Foundation?

Ricky:  The HBL foundation website launched on Tuesday, November 27th. The foundation is primarily focused on providing educational opportunities, resources, and support for students in need that are often overlooked.  The foundation will have both an athlete scholarship fund and a business of sports scholarship fund for non-athletes looking to enter sectors that service the sports world. Sectors such as athletic training, journalism, or sports management.

Unfortunately, in the current system, if you accept a traditional college athletic scholarship, it comes with a lot of ties that are often detrimental to the player. The player has to maintain both academic and athletic eligibility. This often means that the player cannot get a job to cover any cost the player or the player’s family may have while in college.  It also means that the player is pretty much at the mercy of their coach. We want to create an alternative option where our scholarship fund (both the one for athletes and for non-athletes) can cover that cost of attendance.

The foundation will also create original content. The content will be for middle and high school students who are preparing for athletic careers in college and those who wish to pursue a sports-related major.   We are excited about being able to create that content and make it easily accessible and free to people that would otherwise be overlooked.

Kassandra:  Do you have a funny story that you experienced while creating the HBL that you would like to share?

Ricky:  I have a few. While David [West] was making his final decision as to whether he was going to join the HBL he presented at a conference. Afterward, a woman came up to him and told him a story about unlikely allies. It is now a rather amusing thing between David and me for the following reasons. David finished his career in Oakland playing for the Golden State Warriors. Andy lives in the bay area and is a Warriors fan. I live in Cleveland and am a Cavaliers fan.

During the entire development of the HBL, it has been the Warriors and the Cavs in every NBA finals. Andy and I have had a running rivalry. The very thought that it would be somebody on the Golden State Warriors who beat my Cavs the last two years who would end up working with the HBL and helping us move to the next level is funny. Furthermore, it makes David’s story about unlikely allies rather fitting.  I found it to be very amusing for what ultimately happened.

Update: Alston v. NCAA: Amateurism on Trial for Violating Anti-Trust Law

Amateurism

The NCAA will stop at nothing to preserve its beloved “amateurism.”  This article is an update to the initial details of the Alston v. NCAA case detailed on the Unafraid Show. The NCAA demonstrated this last week with the parade of witnesses they called to defend their bedrock principle of “amateurism” in the Alston v. NCAA trial.  In Alston, former college athletes sued the NCAA to have the cap limiting athletic scholarships to cost-of-attendance removed.  The Plaintiffs argue that the cap is a violation of federal antitrust laws.  Each witness offered justifications in support of the NCAA’s assertion that the cap is necessary to protect “amateurism” and to help “student-athletes” become apart of the greater campus community.

There was a recurring theme amongst the NCAA’s witnesses.  Almost every witness argued that removing the cap would have a detrimental effect on college athletics.  However, many of the witnesses failed to offer any hard evidence of that assertion.  They relied on their opinions, which are not sufficient in this antitrust case.  The issue of whether removing the cap would have a detrimental effect on college athletics is the main issue in the case. Therefore, arguments for and against must be supported by expert testimony and/or quantitative data.

NCAA Witnesses in Support of “Amateurism”

The NCAA called several witnesses who offered complex testimony that addressed a variety of issues.  The following are highlights from a few of the testimonies.

Rebecca Blank’s Testimony

First, the NCAA called Rebecca Blank, the Chancellor at the University of Wisconsin, Madison (Wisconsin).  Her testimony was fascinating as it will likely do more harm than good to the NCAA.  While Blank testified that “student-athletes” should not be paid, she also criticized how much coaches are paid.   She stated that it was “unfortunate” that the cap on coaches salaries’ was removed and asserted that the high salaries make the programs look bad.  This assertion made Blank appear to not fully support the NCAA’s and Power 5 conferences’ model.

Relatedly, Blank testified that if “student-athletes” were paid, Wisconsin would reconsider its participation in college athletics. Wisconsin issued a statement the very next day that completely undermined Blank’s testimony. The statement made it clear that Wisconsin has no plans to stop offering college athletics.  Blank’s testimony and Wisconsin’s response makes the NCAA and the Power 5 conferences look disjointed. Furthermore, Blank failed to offer any quantitative evidence to support her assertion that loosening the cap would negatively affect college athletics.

Michael Aresco’s and Eugene Smith’s Testimonies

Similarly, American Athletic Commissioner Michael Aresco testified that the rules capping scholarships are necessary to help smaller conferences like his compete.  He argued that the cap ensures that the “big” schools cannot recruit all of the talents.  This argument is flawed.  Even with the cap, it is generally the same teams in the football bowl games, in the college football playoffs, and in the later rounds of the March Madness Tournament. While Aresco’s testimony is more helpful than Blank’s, he too failed to offer any quantitative evidence in support of his claim that loosening the cap would negatively affect college athletics.

Accordingly, the athletic director at Ohio State University Eugene Smith testified.  His testimony was generally helpful to the NCAA.  He pointed out that not all college athletes will play professionally and that they need to be prepared for that reality.  Smith acknowledged if college athletes were paid there would still be fans, although there may be less.   He also asserted that donors might be less inclined to donate.

What is Next in Alston

On Monday and Tuesday of this week, each party presented the rest of their witnesses.  The trial ended on September 25.  Each party will submit a written closing argument to the judge.  The judge will then take some time to review and then issue a ruling.  After the ruling is issued the parties will have the option to appeal to the federal appeals court in the 9th circuit.  This case could possibly reach the United States Supreme Court.  Alston v. NCAA is extremely significant to college athletics.  If the plaintiffs succeed, it could completely change the world of college athletics.