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The NCAA agreed to pay the players.  You won’t call them employees.
Economy

The NCAA agreed to pay the players. You won’t call them employees.

The immediate takeaway from the historic $2.8 billion deal the NCAA and major sports conferences agreed to Thursday was that it goes right to the heart of the organization’s cherished model of amateurism: Schools can now pay their athletes directly.

But another fundamental principle remains intact, and maintaining it is likely a priority for the NCAA: that players paid by universities are not employees of them and therefore do not have the right to bargain collectively.

Congress must “establish that our athletes are not employees, but students pursuing college degrees,” John I. Jenkins, president of the University of Notre Dame, said in a statement when the deal was announced.

It is the NCAA’s attempt to salvage the last vestiges of its amateur model, which for decades prohibited college athletes from receiving payments from schools or anyone else without jeopardizing their eligibility. That stance came under increased legal and political scrutiny in recent years, leading to the agreement, which still requires a judge’s approval.

At first glance, the argument may seem peculiar. Over the past decade, public pressure and a series of court rulings (not to mention the reality that college athletics generated billions of dollars in annual revenue and athletes received none of it) have forced the NCAA to eliminate restrictions on player compensation. A California law that made it illegal to block college athletes from name, image and likeness, or NIL, agreements, paved the way for athletes to seek compensation, with some receiving seven figures annually.

At the same time, college sports have become an increasingly national enterprise. Regional rivalries and traditions have been cast aside as schools have shifted their allegiances to conferences in pursuit of television money. Individual conferences can now stretch from Palo Alto, California, to Chestnut Hill, Massachusetts, meaning many athletes in a variety of sports spend more time traveling to games and less time on campus.

“I don’t know how not to call them employees at this point,” said Adam Hoffer, director of Excise Policy at the Tax Foundation and former economics professor at the University of Wisconsin-La Crosse. “The NCAA will look more like a professional league than ever before.”

But the stance fits with the NCAA’s long-standing position that classifying athletes as employees is a potential death sentence for college sports. In February, the organization’s president, Charlie Baker, said Congress needed to enact legislation to protect the “95 percent” of college athletes who he said would be harmed by a ruling recognizing them as employees. He said many colleges, those outside the so-called power conferences, already lost money on athletics and that spending more to pay players could lead some to eliminate teams.

Much remains unclear about the deal, which arose from an antitrust lawsuit. If a federal judge in California approves, the schools will decide how to divide the revenue they set aside to share with athletes: up to $20 million.

By reaching a deal, the NCAA is counting on receiving an antitrust waiver from Congress, which would protect it from new compensation lawsuits that it says would hurt its ability to set its own rules. In recent years, the organization has spent millions lobbying the government to create an antitrust exemption similar to that enjoyed by professional baseball.

The agreement is also an attempt by the NCAA to limit the amount of money its institutions will have to pay athletes, said William W. Berry III, a law professor at the University of Mississippi who has studied the issue of compensation for athletes. players in college athletics. Under the formula presented by plaintiffs in the case, the deal would pay players about 22 percent of future revenue. Berry noted that it was much less than the shares paid to players in professional leagues such as the National Football League and the National Basketball Association.

“What they’ve done with the settlement is say, ‘We’re going to share some of the proceeds with you,'” Berry said, adding that a loss in court could have funneled even more money into the settlement. players and has been financially ruinous for the NCAA

Following the granting of the NIL subsidy, the athletes have attempted to negotiate collectively. In February, a federal judge in Boston ruled that players on the Dartmouth men’s basketball team had the right to unionize and should be considered employees. Dartmouth is appealing the decision. At the University of Southern California, football and basketball players demand the right to unionize and be classified as employees. The agreement could strengthen those arguments.

“One of the hallmarks of employment is that you receive compensation for your services,” said Matthew Mitten, a law professor at Marquette University and executive director of the National Sports Law Institute.

But the deal alone is unlikely to generate a radical push for unionization in college athletics. Dartmouth is a small private school in New Hampshire, which has laws favorable to unionization. Many football powerhouses, such as the University of Alabama and the University of Georgia, are located in right-to-work states, where unionization efforts face tough legal and political obstacles.

And non-union compensation could be the preferred route for some athletes at higher-revenue schools.

“I think it’s pretty unlikely that athletes at Power Four schools will want to unionize,” Mitten said, referring to the Atlantic Coast, Big Ten, Big 12 and Southeastern Conferences.

But the NCAA faces radical change, even if its athletes are not called employees.

“The fact that schools will likely have to pay these actors means that the existing business model has to change,” Hoffer said.