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Just a Bit Outside: Is Texas going to kill the NCAA? ***UPDATE WITH CDC RESPONSE***

Travis Galey

@travisgaley
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Aug 12, 2012
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One of my favorite sayings in life is “the child is the father to the man.”

I love it because of its simple, universal truth. Who we are today is largely dictated by who we were then.

While that saying is largely about our personality and all of the quirks that fester in us and manifest themselves in adulthood, it’s also true about pop culture.

Nearly everyone thinks that the culture of their youth is better than the culture of today.

It’s why music and television shows from the 70s, 80s and 90s remain so relevant to me in the 2020s.

I am happy to concede that tv shows from that time period were filled with clichés, but that doesn’t bother me in the least.

One of my favorite television clichés is when a doctor or medical examiner is working on someone only to realize that it’s too late. There’s always a dramatic pause – look up – and then declare the time of death. That scene has played out so much, it has been easily mocked multiple times.

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The thing is, clichés become clichés for a reason. It is a simple and easy way to get an idea across. The writer knows everyone will understand exactly what he or she means when they use the cliché. Which is why most people are taught to avoid clichés because it can come across as hacky and uninventive.

But I am nothing if not a hacky and uninventive writer.

That’s why I’m calling it … time of death for the NCAA is June 27, 2023.

That’s the date it sent a memo to all schools saying that NCAA rules supersede state laws.



The NCAA memo clarifies its policy on NIL stating that “if a state law permits certain institutional action and NCAA legislation prohibits the same action, institutions must follow NCAA legislation.”

Perhaps the most important part of the memo is when the NCAA practically dares schools to do something about it.

“NCAA rules are adopted by member schools.” The memo goes on, “schools who do not like the application of a particular rule should work through the NCAA governance process to change the rule. Unless and until the membership change a particular rule, all schools, as part of a voluntary membership, are required to comply.”

This law is aimed directly at Texas.

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Texas Governor Greg Abbott signed House Bill 2804 into law and it takes effect beginning this Saturday.


The NCAA is coming after NIL collectives such as the Texas One Fund, which is the main collective offering NIL benefits for UT student-athletes.

Although the Texas One Fund says it is not affiliated directly with the University of Texas, the two have a very clear and public working relationship. For example, the Texas One Fund was the presenting sponsor of this year’s Orange and White spring football game.

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The NCAA memo says such close cooperation is against the rules.

“Any entity that is so closely aligned with an institution that it is viewed as an extension of the university is subject to the same NIL scrutiny as the institution and must adhere to NCAA rules and policy,” the memo states. “This includes the prohibition on compensating student-athletes for use of their NIL.”

NCAA rules still forbid boosters from directly paying athletes to participate in sports at their schools and the NCAA memo says collectives such as the Texas One Fund are boosters.

However, the new Texas state law clearly states that 501(c)(3) organizations such as Texas One or the 12th Man + Fund associated with Texas A&M are separate entities from the universities themselves. As such, under the new Texas state law, the NCAA does not have the right to punish the university, its athletic programs or athletes for participating in NIL deals.

According to the legislation: “An athletic association, an athletic conference, or any other group or organization with authority over an intercollegiate athletic program at an institution to which this section applies may not enforce a contract term, a rule, a regulation, a standard, or any other requirement that prohibits the institution from participating in intercollegiate athletics or otherwise penalizes the institution or the institution’s intercollegiate athletic program for performing, participating in, or allowing an activity required or authorized by this section.”

The bill also allows these collectives to offer perks to donors such as priority seating at athletic events and parking. Those kind of benefits go against NCAA rules.

The NCAA is putting its member institutions, such as UT and A&M in a real bind. They’re telling these state institutions that they are not allowed to follow state law. Bear in mind, these are state institutions themselves. How can a state-funded university say it is going to ignore state law?

“The state law is going to govern how we do business,” Texas A&M athletic director Ross Bjork told ESPN this week. “We will continue to communicate with the NCAA on a variety of matters, but in terms of this, the state law will reign.

Ultimately, there are three ways this NCAA vs. Texas fight ends (or some combination of the three).
  • The battle between the NCAA and schools impacted by state laws (Texas is the big one but other states have their own NIL laws on the books) will be settled in the courts.
  • Congress passes NIL laws which would trump state law and provide for an even playing field for every school.
  • The schools leave the NCAA.

THE LOOMING COURT BATTLE

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The only reason student-athletes are able to receive compensation for their name, image and likeness in the first place is because of lawsuits.

In June of 2021, the Supreme Court ruled unanimously against the NCAA saying that the association does not have the right to limit education-related compensation benefits for student-athletes for things such as computers or graduate scholarships.

In the immediate aftermath of the ruling, states such as Alabama, Florida and Georgia swiftly moved to pass legislation allowing athletes to receive NIL compensation. The NCAA, having been so resoundingly rebuked by the Supreme Court, adopted an interim policy that allowed NIL deals to move forward.

Now, two years removed from that ruling, the NCAA could be setting itself up for another legal fight … and if it does make it back to the Supreme Court, at least one justice has already signaled that he’s inclined to rule against the association again.

During the NCAA vs. Alston case, Associate Justice Brett Kavanaugh wrote a concurring opinion that went well beyond the very narrow ruling of the court.

Kavanaugh wrote that the NCAA’s remaining compensation issues pose serious antitrust issues.

“Although the Court does not weigh in on the ultimate legality of the NCAA’s remaining compensation rules,” Kavanaugh wrote in the opinion, “the Court’s decision establishes how any such rules should be analyzed going forward. After today’s decision, the NCAA’s remaining compensation rules should receive ordinary “rule of reason” scrutiny under the antitrust laws.”

Kavanaugh continued, adding a sharp rebuke of the NCAA’s business model.

“To be sure, the NCAA and its member colleges maintain important traditions that have become part of the fabric of America,” Kavanaugh wrote. “But those traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student-athletes who are not fairly compensated. Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate. And under ordinary principles of antitrust law, it is not evident why college sports should be any different. The NCAA is not above the law.”

Kavanaugh’s opinion all but ensures that lower court judges would likely rule against the NCAA if a member school or state took the association to court. It's hard to imagine any scenario where judges won’t read that opinion and apply it to any lawsuit against the NCAA if it takes action against schools for NIL deals.

And IF a case does eventually make it to the Supreme Court, Justice Kavanaugh has already laid down a very high bar that the NCAA must now clear to prove its case.

CONGRESS'S ROLE

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Texas is just one of many states that have put together a patchwork of laws legislating NIL compensation deals. The extreme differences in the laws means there is an unequal playing field between schools as to what is allowed and what isn’t allowed. That has state legislatures racing to pass laws to give their state schools an edge in recruiting.

This random collection of laws is part of the reason the NCAA issued the memo yesterday.

NCAA President Charlie Baker warned earlier this month that if Congress didn’t act to clean up NIL, the NCAA would.

“I think it was a big mistake by the NCAA not to do a framework around NIL when they had the opportunity,” Baker said during the Future of College Athletics Summit. “I think there were too many people in college sports who thought no rules would work really well for them. And what everybody’s discovered is no rules, no transparency, no accountability, no framework, doesn’t work well for anybody.”

Former Ole Miss, Auburn, Texas Tech, and Cincinnati head coach turned Senator Tommy Tuberville (R-AL) is leading the charge on a bill that would set national standards for NIL.

Tuberville, who is working with Democratic Senator Joe Manchin of West Virginia on legislation, called the current NIL landscape is a “disaster.”

“Our universities, our colleges, our athletes, our coaches, administrators and our fans need a lot of help with this because this is out of control and we cannot sustain this,” Tuberville said in a video released to USA Today. “If we don’t get some kind of control, we will not have the same product on the field. We will not graduate as many students through education and it will be a disaster when it comes to having only a few people able to afford this across the country, basically cutting out the middleman and the little guy.”

Tuberville says he and Manchin have been working on the bill for more than a year and finally have it in a text form, but they have yet to introduce the legislation on the floor of the Senate.

NCAA President Baker says that because 2024 is an election year, he believes Congress needs to pass something this year.

“One way or another,” Baker said, “I believe there needs to be a framework in place – whether it’s ours or a congressionally mandated one – by the end of the year.”

SEE YA LATER!

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If, as I suspect, the NCAA has set itself up for legal challenges, then the battle may result in a schism that sees the NCAA member schools leave the association altogether.

It may not be the most likely scenario, but it can’t be ruled out.

The reason it can’t be ruled out is because of the Golden Rule … whoever has the money has the power.

College football fans today know all about the power of television dollars. From the very beginning, it has been the driving impetus behind realignment. They’ve seen university presidents make decisions to forego decades of rivalries in favor of “greener” pastures in other leagues. That green, of course, is being provided by media rights deals.

But many college football fans today may not remember that it used to be the NCAA that negotiated television deals and distributed the money between its members.

However, in 1984, the major power brokers in college football decided that they, not the NCAA, should take charge of the media rights deals. A group of universities broke away and formed the College Football Association in order to wrestle control of the television dollars away from the NCAA.

The resulting lawsuit, NCAA vs. Board of Regents for the University of Oklahoma, wound up before the Supreme Court. Once again, the justices overwhelmingly ruled against the NCAA, 7-2.

The Court decided that the NCAA was breaking antitrust laws by limiting the number of games available to TV broadcasters. They called it an anticompetitive form of “horizontal price-fixing.”

With that decision, the NCAA was delivered a sharp blow and the universities gained control over their own media rights deals.

The battle over NIL could see universities once again questioning why they deal with the NCAA in the first place.

It is important to note that the biggest players in college athletics have already been showing independence from the NCAA. For example, the College Football Playoff is put on by the Power 5 conferences, not the NCAA. As a result, it’s the schools, not the NCAA, that get money from the college football playoff.

It’s not hard to see a scenario where university presidents look at the money generated by the NCAA led March Madness tournament and think they could cut out the middle man and run the basketball tournament themselves.

The NCAA earned roughly a billion in revenue from the men’s basketball tournament in 2022. That money then gets distributed amongst the conferences.

This may just be the impetus that schools need to break away from the NCAA and set up their own power structure.

A Knight Commission Survey released in October 2020 showed 65 percent of Power Five schools within the NCAA supported the idea of creating their own division within the NCAA in order to determine their own operating rules.

44 percent of schools surveyed (351 Division 1 schools) supported the FBS separating from the NCAA completely.

Obviously, that number is not even a majority, but that was also three years ago. Dissatisfaction with the NCAA’s handling of the seismic changes in college sports would likely see that number be much higher now.

Once the universities start seeing the cash flow generated by the expanded college football playoff, and they look at the money they could get from running their own March Madness tournament, the next logical step is that they will decide they don’t need the NCAA … especially those same president’s read through the NCAA’s memo and see paragraphs like this:

“NCAA rules are adopted by member schools. schools who do not like the application of a particular rule should work through the NCAA governance process to change the rule. Unless and until the membership change a particular rule, all schools, as part of a voluntary membership, are required to comply.”

That’s why I’m calling it … time of death, June 27, 2023.

****** UPDATE *****

Texas Athletic Director Chris Del Conte sent a letter to foundation members Thursday.



TWEETS OF INTEREST:

Just exactly how much money is being spent on NIL? The numbers may blow your mind.



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There’s an old saying that if you want to know what someone truly values, see how they spend their money (paraphrasing).

If that’s true, then take a look at how Texas linebacker Anthony Hill is spending his NIL money.



Football has provided a lot for Hill in his life (I feel comfortable saying that even though I don’t know him). And he is clearly giving back, hoping to help others.

This is exactly the type of player you can feel comfortable cheering for when he takes the field at DKR for the first time this fall.

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Texas Football has never been more popular.



I know there is plenty of excitement about the 2023 season, but I have to wonder how many people got their season tickets now, so that they could be guaranteed to get to buy them next year when the Longhorns move to the SEC?

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Texas vs. OU and Texas vs. Alabama are two of the most expensive tickets on the secondary market this season.



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Or maybe it’s not just Texas? Clearly football is more popular than ever before.



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I think it’s absolutely incredible that this year’s College World Series got such big tv numbers!



But I do have a couple of thoughts about this. First, how did so many people watch those games? Two out of the three were blowouts. Second, college baseball being a ratings draw is great for the game and will be great for the SEC when it renegotiates its media rights deal, especially as ESPN shifts to a streaming only option. Third, LSU winning it all is not a good thing for Texas baseball. UT and LSU compete head to head for too many players.

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Television dollars, as I’ve stated, is the biggest driver in college athletics and I’m not sure that Notre Dame won’t be able to get this number on their own without joining a conference.



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Gambling in the NFL has become a real problem.



But don’t fool yourself, it is a real problem in college sports as well. The Texas NCAA compliance office needs to make this a major point of emphasis as the new school year starts up again.



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It’s simply a tragedy that Ryan Mallet died so young.





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In honor of tonight’s NHL Draft, I present you this. I absolutely LOVE that an HBCU school is starting a hockey team.



And you KNOW those jerseys are going to be popular items.

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I love Futurama and I can’t wait for it to come back.



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Finally … this is just trippy.

 
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