Players as employees? High costs of college football union is in millions

The CAPA is looking for many things, including guaranteed medical coverage for current and former players. (USATSI)
The CAPA wants many things, including guaranteed medical coverage for current/former players. (USATSI)

He's followed Northwestern's union fight for 10 weeks. He's consulted with his legal counsel. He's read every news story on the issue. And SMU athletic director Rick Hart's head still hurts.

That's because reliable answers seem scarce. There are so many layers to this fight, from the NCAA's disdain for it to Northwestern's appeal to the National Labor Relations Board's role.

The petition to unionize, with the backing of College Athletics Players Association, was a stealth move, and he's trying to grasp it.

So Hart began asking his own questions, one of which is rhetorical.

"Are you going to fire student-athletes? Is that really what we want?" Hart said. "I think we want the same things but I'm not sure this is the correct avenue."

Hart's concern is one of many implications the FBS-level private schools could be facing if Northwestern players vote pro-union majority on April 25.

Once the NLRB -- which operates only in a private sector while public schools are state-governed -- ruled from its regional office in Chicago that Northwestern athletes should be employees, the threat was tangible. And the fight was officially bigger than Northwestern. It's potentially about these 17: Baylor, Boston College, BYU, Duke, Miami, Northwestern, Notre Dame, Rice, SMU, Stanford, Syracuse, TCU, Tulane, Tulsa, USC, Vanderbilt and Wake Forest.

They could incur serious expenses to fulfill player needs under a union model. Operating within the NCAA's rigid amateurism rules would become increasingly difficult for several reasons, two neutral experts say: state/federal labor laws, the threat of having to pay players a minimum wage salary, increased chance of discrimination lawsuits and the College Athletes Players Association's desire to allow commercial compensation for athletes.

And not many would feel badly for schools because of the billions in television revenue circulating through the game.

"Especially with legal implications, this has the chance to be a nightmare," said Gordon Binder, a trustee with American Enterprise Institute and a former CEO of Amgen who has extensively researched the Northwestern situation. "You'd enter a world where if a player is kicked off the team, that player, as an employee, could file a discrimination suit. You could be looking at North of $100 million for a school."

Cost of Doing Business
Under a unionized college football model, a player would be an employee – meaning a scholarship would be part of that player's salary. So, to find out how much each new 'employee' might cost a school, consulted with three athletic directors from major conferences. They say, on average, employees cost schools at least 20 percent of that employee's salary because of unemployment insurance, workers compensation, disability insurance and pension plans, among other things. Based on that percentage, here is a breakdown of what the 17 FBS private schools would pay for each of their 85 football 'employees' on scholarship. Note: The full 'cost of attendance' would balloon these numbers but those figures are inexact.
'Employee cost'
Boston Coll.
Notre Dame
Wake Forest
Note: Tuition numbers from latest U.S. News 'Best Colleges' rankings

The most explosive issue in this fight is health care for unionized players, added Mel Owens, a 10-year NFL veteran and workers compensation attorney out of California.

"It's an expensive endeavor because of medical costs of players -- covering guys that sustained severe injuries after their careers are done," Owens said. "That adds up."

If private athletic departments haven't consulted with their legal teams yet, they have at least thought about the framework of a deal.

In fact, two athletic directors -- Tulsa's Derrick Gragg and Vanderbilt's David Williams -- have discussed organizing a summer meeting with all 17 private schools to discuss what's to come.

"Am I worried about it? I'm paying attention to it," TCU athletic director Chris Del Conte said. "It affects really [17] schools. That's just the stopping point. What is it? What's amateurism? So many things that could take place."

If you thought stipends would become a dividing line for haves and have-nots, consider the pension plans and lawyer fees associated with unionization.

The NCAA won't allow additional benefits for players under its rules, but the amateurism system has been hotly contested for years, decades. Many believe the model, in its current form, stands on wet sand.

So now seems a good time to imagine a state of college football where all private FBS schools employ unionized players.

Several people interviewed for this story, including Williams, believe public schools would not be immune to unionization if a federal court reviewed an athletes-as-employees model. Binder expects Title IX to be a factor -- "lacrosse players would want rights, too," he said.

But since CAPA is targeting football, the prominent revenue driver in college sports, that is a good place to start.

Save a deal from the NCAA to improve athlete benefits or a minority Northwestern vote, unionization is a factor.

For now.

"I don't think we have consensus on what it would all mean, what exactly we're dealing with," Hart said.

The College Football Union

First, let's start with the desires of CAPA, a fight spearheaded by longtime player activist Ramogi Huma and former Northwestern quarterback Kain Colter:

Guaranteed medical coverage for current/former players.

Minimizing sports-related brain trauma.

Establishing a trust fund for players graduating on time.

Increasing athletic scholarships and allowing compensation for commercial sponsorships.

Ensuring due process rights on potential rules violations.

CAPA has not advocated for professional salaries. The scholarship is essentially the salary, Huma said.

"We do recognize health coverage, a trust fund for education -- those aren't forms of compensation," Huma said.

If the NLRB ruled that CAPA could represent players in all 17 FBS privates, the 'College Football Union' would have its own roster separate from the publics.

CAPA would collectively bargain with these schools, assuming all player pools would win a majority vote to unionize.

This is a diverse group, from national football powers (USC, Stanford, Notre Dame, Miami) to schools outside of the major-conference structure such as SMU, Tulane, Tulsa and Rice. The Atlantic Coast Conference would be most affected. Five of its 14 schools (six counting part-time lover Notre Dame) are privates.

The division of power and smaller conferences is important here because the ACC, SEC, Pac-12, Big 12 and Big Ten will soon carry weighted voting power in the NCAA.

Using public schools as a reference point, revenue lines from the five smaller conferences -- American, Mountain West, MAC, C-USA and Sun Belt -- range from UConn at $63.5 million to Troy at around $16 million, according to a USA Today revenue database.

More of that money than ever would go to player welfare.

"The costs would be the same regardless of the school revenue, and that might be undoable," Owens said.

What's The Cost?

Without hard numbers, one can assume USC and Notre Dame and Stanford can handle expenses associated with unionized players. They are major players in today's game.

But by applying the term "employee" literally, all schools would take notice.

After asking three power-conference athletic directors, all three agree: An athletic department must cover certain costs with any standard employee (unemployment insurance, workers compensation, disability insurance, FICA, etc). And those costs are at least 20 percent of that employee's salary, they say.

Most schools cover primary and secondary medical insurance for current players. But Binder says unionized players might fight for life-long medical coverage at the bargaining table, especially for sustained brain trauma or long-term injury recovery. One athletic director says a school's yearly medical costs are about $6,000 for a non-married employee.

Huma said details of medical care must be collectively bargained.

Let's return to that 20 percent figure. Without exact cost of attendance figures, the next-closest thing is the average FBS private school scholarship of $40,152, according to U.S. News and World Report's "Best Colleges" rankings.

Twenty percent of that is $8,030. That number times 85 scholarship players equals $682,550 per year during eligibility, with the promise of post-career insurance at $510,000 annually ($6,000 x 85). By the way, an 85-man employee roster is bigger than some whole athletic departments.

Walk-ons have rights, too, but since the Northwestern vote involves scholarship players, this math is specific to the 85.

When players cycle through the system and receive post-career benefits, those two major costs would overlap at slightly less than $1.2 million -- unless negotiated down in bargaining.

That's before lawyers get involved. Oh, there will be lawyers. Standard hourly rates for high-level collegiate matters reach the hundreds, and lawyers could work long hours in a few cases: handling employee grievances or collective bargaining counsel. They can help universities answer tough questions.

Check your budget
Below are the 17 private schools that could face player union efforts in the coming years if Northwestern succeeds, broken down by conference affiliation and revenue ranges for public schools in those conferences (private schools are not obligated to disclose budgetary matters). The National Labor Relations Board, which approved Northwestern's petition to unionize, only deals in the private employee sector. The lower the revenue number, the more difficulty private schools could face if covering union costs that could reach the millions.
Conference Schools Budget
American SMU
$35-$64 million
ACC Boston College
Wake Forest
$63-$100 million
Big Ten Northwestern $64-$142 million
Big 12 TCU
$55-$163 million
C-USA Rice $19-$35 million
Independents Notre Dame
Pac-12 Stanford
$41-$94 million
SEC Vanderbilt $51-$125 million
Note: Figures from USA Today revenue database

"Every one question or one scenario or one thought process that I can come up with probably leads to three or four or five more questions in that area," Williams said. "Are Northwestern players full time or part time employees? If there is a union, what does the union negotiate for?" Couple union costs with the stipend -- which could run departments at least $500,000 if all scholarship athletes get it -- and you have college football's new bundle package.

Players could face costs, too. Hart is concerned about player hazards if everything is merit-based - failure to perform on the field or in the classroom could result in a lost scholarship. Taxation on scholarships could be an unintended consequence.

"You're really not going to have the same protections on the same things as you have now," Hart said.

The payoff?

That's easy. Better players, which leads to better results and more revenue.

If you're USC or even Rice, you could say to a recruit, 'I know you're talking to these other two schools, but if you come here we'll pay your medical insurance for five years, plus you can collectively bargain for other things you want, plus if you graduate early you'll get extra dough in a trust fund, and perhaps you can capitalize off marketing value if you become our star quarterback …'

This would appeal to the athlete that believes in player rights and is adept to change. It's also against NCAA rules, but the hypothetical allows us to ditch amateurism for a bit.

Auburn running back Corey Grant says he hasn't thought much about unionization, but he does know playing college football, though a great experience for him personally, creates revenue that players don't see.

"Those guys are helping bring in money and they don't get any of it and they are the ones out there putting in hard work all the time and they go out on Saturdays and through the week and compete," Grant said. "I think they should get some type of reward or something from that." In a unionized world, schools can help. As Binder sees it, players could get at least minimum wage for hourly football work since, well, what employees aren't paid at least that?

Could boosters treat recruiting like the Wild West?

"If you want to keep that All-American, and commercialism is allowed in a union, that booster could offer him $100,000 to sponsor Joe's Hot Dog stand," Binder said.

Such a plan could cause the so-called 'three-percenters' -- stars such as Marcus Mariota or Braxton Miller -- to get a bigger salary than others, potentially costing schools huge amounts if they "monopolized a salary pool," Hart said. It could also create a false market for decorated high school players that might not pan out.

Another potential advantage is exposure. Northwestern is in the news because of its labor fight. It's too early to see if that publicity will spike recruiting, but it's possible.

Now, the power conferences, with more legislative power as early as this summer, could always recreate the system and duplicate the union plan.

As Del Conte points out, "we were already having those discussions" about accommodating needs CAPA outlines. Power conferences want to pay for player stipends or for family expenses for recruits on official visits, among other things.

For now they can't do those things. Maybe unionized schools can beat them to it.

"I (think) the NCAA will get there and fix the system first, before it gets there," Owens said.

Huma, however, isn't so sure because of the NCAA's track record of inaction.

"The NCAA has done pretty good job of making people fear any type of change," Huma said.

Which schools would embrace unionization?

Based on the tepid reaction from administrators about unionization, finding enthusiastic collective bargainers might be difficult. Athletic directors are taking a wait-and-see approach. Too much is unclear. Most agree change is necessary, but not like this.

"The reason unions are created is because people have been mistreated," Auburn athletic director Jay Jacobs said. "I know here at Auburn we treat our students-athletes very well, but we need to continue to do more."

No doubt most, if not all, schools will appeal an NLRB ruling if they got one. Lawyers will charge hundreds per hour to uphold amateurism. If those efforts become futile in the union realm, how will athletic departments approach this?

"If my kids came to me and said this is what we're looking at, I'd say don't get caught up in the emotion and look at all the research," Del Conte said. "Let's look at what we provide and where we're headed." Like Northwestern is doing now, schools can create a case for why players should vote no. CAPA and its leaders would create a case why they should vote yes. Maybe the big-money privates could support a union. They are in competitive recruiting markets, so why not?

So is Vanderbilt, which, as the only SEC private, could thrive in unionization.

As an independent not named Notre Dame, perhaps BYU would benefit from the enhanced recruiting while offering cushy family plans for players with children.

Williams doesn't know how Vanderbilt would approach this because it's hypothetical, but he knows a union wouldn't change the fact students should be treated well.

"If you have employees, the concept is to try to make sure you are treating them fine," Williams said. "Our position is trying to prepare ourselves for whatever the landscape is, most importantly to hope we're doing a positive and the right thing as it relates to our student-athletes -- whether employees or not."

The phrase 'college football player as employee' is explosive and could be so for a while.

Even a coach who considers himself "incredibly proud" of Northwestern players for free thinking can't get past that.

"I'm an advocate for change, I just don't believe unionization is the way to go," Northwestern's Pat Fitzgerald said.

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