Fair Pay and the Things That Can’t be Taxed

Last week, the NCAA announced it would be modifying its amateurism rules to allow college athletes “opportunities” to “benefit” from use of their names, images, and likenesses (NIL), just days after the Fair Pay to Play Act (SB-206) was officially passed into law. It’s an announcement that’s been regarded as unprecedented by many, but the language surrounding it is concerning. Nowhere does the NCAA’s statement mention money or compensation, and the NCAA made it clear that it still won’t consider college athletes university employees.

Even so, the internet exploded, and the digital conversation surrounding the Fair Pay to Play Act has been unfolding for months over the course of its passing. Prominent sports figures have been supporting SB-206 for months, and many believe the NCAA’s reaction is a direct result of the bill officially passing into law. Even politicians who have never expressed an interest in college sports have been following the ordeal, from Mitt Romney to Elizabeth Warren, to Richard Burr, who tweeted:

“If college athletes are going to make money off their likenesses while in school, their scholarships should be treated like income. I’ll be introducing legislation that subjects scholarships given to athletes who choose to ‘cash in’ to income taxes.”

There’s a lot wrong with this tweet, but that’s another article for another day. Still, Burr highlights why SB-206 has generated the kind of conversation it has: athletic revenue is taxable. NCAA policy usually doesn’t interest people outside of college sports, and as someone who researches it, I can tell you that I routinely wear out my college sports fan friends by diving 400 pages deep into the Division 1 Manual in the middle of a football game. That’s more than understandable. I’d like to enjoy the game too, and I have to go through extensive mental gymnastics to do it.

That being said, it’s undeniable that the Fair Pay to Play Act and the NCAA’s reactions have been headline-grabbers, even to those who have never expressed an interest in college sports. Athletic amateurism has become the low-hanging fruit for policy-makers and bi-partisan political talk: nearly everyone agrees that athletes deserve to profit from their NIL. But that’s only a fraction of the issues that affect college athletes.

Over the course of the SB-206 storyline, two independent investigations have taken place surrounding coach abuse of softball players at the University of Nebraska and Rutgers University, and more ugly information has surfaced regarding former Ohio State team doctor Richard Strauss, who allegedly assaulted over 300 of his student-athlete patients over the tenure of his decades-long career there. Why have only a handful of stories been written about the systemic abuse of college athletes?

I’ll be blunt: revenue garnered by college athletes is taxable income, and that’s why it demands attention. Athletic safety can’t be taxed, so it gets put on the back burner while everyone else debates amateurism. In a way, Richard Burr is correct about cashing in, but it’s not the athletes who are getting payouts. I would argue that politicians, like Burr, who express a desire to “cash in” on college athletes need to care about their humanity just as much, even if that can’t be taxed.

SB-206 Wins the Battle, not the War.

If you follow college sports at any level, you are likely aware that California governor Gavin Newsom just signed the Fair Pay to Play Act (SB-206) into law yesterday morning. This means that in 2023, college athletes may be able to profit from their images, likenesses, and skills, depending on the responses of the NCAA and California universities (It’s a hard “maybe” for now. Check out ESPN’s nifty little School House Rock-esque video explaining the potential path of the bill here).

I think it’s safe to say that everyone deserves to profit from what is rightfully theirs, and many sports fans consider SB-206 a monumental victory in the fight for athletic rights. It’s definitely a win, but it’s probably not as big of a deal as most people think. Here are ten key reasons why:

1.) In spite of the name, the Fair Pay to Play Act isn’t paying athletes. Rather, it’s allowing financially-illiterate eighteen-year-olds the right to be entrepreneurs, which is potentially dangerous because the bill doesn’t provide any monetary regulation or financial education for the young adults it affects. But because it’s a state law, SB-206 is a great way for California to pay off its debt through taxable revenue.

2.) SB-206 won’t grant college athletes employee status and the benefits (e.g. insurance and the right to unionize) that come with it.

3.) The bill won’t fix the fact that there is no definition of athletic abuse in the Division 1 Manual, let alone any rules against coaches and trainers harming the athletes they oversee (Google Larry Nassar, Richard Strauss, or Sylvia Hatchell for examples of what abuse looks like in athletic settings). Athletes will still be just as vulnerable to abuses of power if/when SB-206 goes into effect.

4.) It won’t provide discriminatory protections to minority athletes and coaches. Discrimination is legal, according to the gaps in the Division 1 Manual.

5.) It won’t provide mental health services to athletes, and these initiatives are desperately needed. Poor mental health among college athletes is a silent epidemic, and college athletes are particularly susceptible to anxiety, depression, PTSD, and eating disorders, all of which put them at a higher risk of heart issues and suicide than the general population. The NCAA has yet to address these problems at a meaningful level.

6.) SB-206 won’t improve training room health care for athletes, because the NCAA requires literally nothing of the healthcare specialists that work with its athletes. There’s a whole handbook of guidelines (which hasn’t been updated since 2015), but no hard and fast requirements, which puts athletes at medical risk.

7.) It won’t close the pay gap between male and female coaches, or the funding gaps between men’s and women’s athletic programs.

8.) The bill won’t lift scholarship caps. Contrary to popular belief, the vast majority of college athletes don’t have full ride scholarships, because the NCAA limits the amount of monetary resources teams can provide them. For example, Division 1 track teams receive 12.6 full scholarships to be dealt out to rosters that typically hover around 30 athletes. This keeps resources scarce, which keeps things toxically competitive among teammates, and makes college athletes dangerously controllable. If coaches maintain financial control over athletes, they can make athletes do just about anything, and SB-206 won’t leverage that playing field for the majority of college athletes who aren’t worth millions of dollars.

9.) SB-206 won’t give college athletes any job security. Coaches get multi-year contracts, but can legally cut an athlete’s scholarship without warning, and for virtually any reason.

10.) It won’t give athletes anywhere to go with any of the aforementioned problems. There is no standard operating procedure for reporting athletic grievances, which is why most athletes stay silent when they are mistreated (e.g. the University of Nebraska softball team) and keeps the system in place.

Allowing college athletes to earn money is a good fight to fight, but it’s certainly not the only one. The NCAA needs a complete structural reform before it actually starts benefitting its athletes, so although the one-sidedness of the amateurism conversation is frustrating, the national attention is encouraging. Maybe SB-206 will serve as a good wrecking ball to start dismantling–and then rebuilding–a crooked, but promising, organization.

SB-206 and (Ir)Responsible Recruiting Standards

Today, I’m going to do two things I really don’t want to do.

First of all, I’m going to go out of order. I wanted to start off this series with the NCAA’s commitment to value-based legislation. We’re going to be talking about its commitment to responsible recruiting standards instead. It’s a short commitment, so I’ll include the full text:

“Recruiting bylaws shall be designed to promote informed decisions and balance the interests of prospective student-athletes, their educational institutions, the Association’s member institutions and intercollegiate athletics as a whole. This commitment includes minimizing the role of external influences on prospective student-athletes and their families and preventing excessive contact or pressure in the recruitment process.”

Recruiting is a dirty game for a lot of reasons, but I’ll talk about that in another post. For now, let’s move onto the second thing I really don’t want to do, because you’re going to want to stick around for this one. Today, I have to admit that Mark Emmert is right about something. That’s painful for me to write but I have to give him credit. It’s only responsible.

Last week, the NCAA released a statement in response to the Fair Pay to Play Act passing the California assembly. It only has one more hurdle until it becomes law and has until July 11^th to do so. Emmert is lobbying to prevent that from happening. And his justification actually makes sense. Here’s an excerpt of the letter he wrote to the final committee that explains why:

“When contrasted with current NCAA rules… as drafted the bill threatens to alter materially the principles of intercollegiate athletics and create local differences that would make it impossible to host fair national championships.”

He’s right. I hate to say it, but Mark Emmert is right. Which links back to responsible recruiting standards and excessive pressure, and externa influences mentioned in the Division 1Manual. Any reform to amateurism needs to be comprehensive. South Carolina representative Mark Walker knows this, which is why he’s working to pass a similar law through congress. I like his approach a lot better than California’s. Here’s why:

If only California athletes are allowed to accept payment, that creates an egregious unfair competitive imbalance to California universities. Coaches will be able to leverage that when they recruit high school athletes and the Pac-12 will have national championship teams until other member states hop on board, which could take a while. That’s not fair.

I’ll give you a scenario to illustrate my point: University of Southern California head coach, Clay Helton and defending national champion coach, Dabo Swinney both go to recruit an athlete. Swinney has prestige on his side and USC hasn’t won a national championship since 2004. But, should SB-206 finally pass, Helton now has money on his team, or at least the potential for his athletes to earn it.

Helton can offer recruits the opportunity to receive hundreds of thousands of dollars while they play at USC. Swinney can’t do that unless he wants to do it illegally. He won’t. Swinney doesn’t think athletes should be paid in the first place. Who do you think is going to win that recruit over? Especially if he comes from poverty, which, contrary to popular belief, most full-ride athletes do.

I’ve said before that I’m all for fair compensation. It’s not the NCAA’s right to give or take away in the first place. But amateurism reform needs to be comprehensive. That’s why I’m a fan of Mark Walker’s bill and critical of SB-206. Widespread bylaws are the only way the NCAA can maintain its commitment to responsible recruiting standards. Mark Emmert is right. And I hate to admit that. But it’s only responsible.