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Just a Bit Outside: The BIG one is coming!

Travis Galey

@travisgaley
Moderator
Aug 12, 2012
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Froylan Ramirez walked through the tunnel into the bright sunlight and the emotions of the moment were overwhelming.

“We stopped, looked out at the field, players could be seen warming up,” Ramirez wrote about the experience years later. “I grabbed the railing to assure myself that I was actually at my first World Series game!”

Ramirez had been one of the lucky ones. He actually scored tickets to game three of the 1989 World Series featuring his beloved San Francisco Giants and their cross-bay rivals, the Oakland A’s.

Before the first pitch, the nickname of that World Series went from being the ‘Bay Bridge Series’ to the ‘Earthquake Series.’

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“I heard a roar, thought it was a jet plane flying over or near the stadium,” Ramirez wrote. “I looked up and saw nothing. As I scanned the stadium, I saw the light standards swaying. Then, to my horror, saw the entire stadium moving as a mold of Jello moves if one shakes the plate it sits on.

“It shook for what felt like minutes, the only thought was if the stadium falls, please Lord let me fall on something soft so I don’t die!”

The Loma Prieta earthquake lasted 15 seconds.

During those 15 seconds, the ground shook, roadways collapsed, buildings fell and 63 lives were lost.

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The magnitude 6.9 earthquake came on in an instant but looking back on it, seismologists said that the quake was not a surprise. It turned out, the earth had been sending signals that pressure was building with a series of precursors called foreshocks – smaller earthquakes that presage a bigger quake.

College football is not life and death. Thank God. But if you think the changes that we’ve seen in college football over the last few years are dramatic, I’m here to tell you that they are just the foreshocks to the big one … the one that is coming possibly as early as this week.

“It’s the biggest change yet to how college athletics has operated for such a long time,” said Mit Winter, an attorney specializing in NCAA issues.

House vs. NCAA is the landmark lawsuit that will likely shake the ground under the college football landscape.

WHAT IS HOUSE VS. THE NCAA?

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Grant House, a former Arizona State swimmer and Sedona Prince, a former Longhorn who now plays basketball for TCU, are the named plaintiffs in a class-action lawsuit against the NCAA. The suit seeks back pay for name, image and likeness damages before the NCAA rule changes in 2021 allowed for NIL opportunities. The suit also is seeking to force the NCAA and the power conferences to lift rules blocking revenue sharing from broadcast rights.

There is a settlement in the case being finalized now. Conferences are voting to approve the measure but it will still take several months before the judge in the case signs off on the agreement.



HOUSE VS. NCAA SETTLEMENT FEATURES:
  • $2.7 Billion in back pay
  • An optional $20 million in annual revenue sharing from schools to athletes
  • Eliminate caps on number of scholarships
  • Resolve antitrust cases, including Hubbard v. NCAA and Carter v. NCAA

The NCAA urged conferences to sign off on the settlement. Not only is the association on a losing streak when it comes to court cases involving student payment, but losing the court case could incur treble damages which the NCAA is telling conferences could be as high as $20 billion.

“In the current world we live in, planning is very hard to do,” NCAA President Charlie Baker told reporters at last week’s ACC meetings. “If we can land this thing … I think it creates a lot of stability and clarity for schools. And it makes it possible for all of us to start thinking about what the next act will look like as it rolls out instead of feeling like you’re waiting for the next shoe to drop.”

The NCAA’s concern that it could lose the case is well-founded. Judge Claudia Wilken, who is presiding over the House case, is the same judge who handed the NCAA defeats in O’Bannon vs. NCAA and Alston vs. NCAA cases. O’Bannon opened the door to NIL opportunities in the first place and Alston said the NCAA cannot limit athletes’ educational benefits such as graduate scholarships, expenses to study abroad and post-eligibility internships. Wilken’s rulings in both of those cases were affirmed by the Supreme Court.

The NCAA will pay for its share of the nearly $3 billion in settlement damages by reducing how much money it distributes to conferences from things such as the March Madness tournament. Conferences will be on the hook for some and schools on the hook for the rest.

That is going to put a significant financial strain on universities of every shape and size.

REVENUE SHARING

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Further straining schools will be a revenue sharing system where schools will begin sharing the revenue they receive from broadcast rights directly with the student athletes.

“The line in the sand has been schools cannot pay athletes,” Winter said. “That has been like the cardinal sin of college athletics. The settlement is going to change that. Schools will be able to directly pay athletes.

“Schools will be allowed to directly pay in NIL compensation to their athletes. There would be an annual cap on the amount a school can pay to all of its athletes of around $20 million. That's based on the 20 percent of the average P4 schools’ athletics revenue. That is how they back into that annual cap number.”

While the $22 million is the maximum amount of revenue sharing schools can give to athletes, the schools don’t have to give that much. In fact, it would be entirely optional, meaning schools don’t have to give any revenue sharing if they don’t want to.

The revenue sharing plan is optional for schools, but it has the potential to create a much wider rift between the haves and the have nots.

If school “X” is giving its athletes in all sports $20 million each year and school “Y” decided that it either doesn’t want to pay that amount to athletes, or can’t afford to do so, then which school do you think is more likely to end up with the better overall caliber of athletes across all of its sports?

“I've spoken with a great many schools throughout Texas, from the largest schools all the way down,” Texas Senator Ted Cruz told Orangebloods. “We have a real risk of chaos and fundamental damage occurring to college athletics. The current path we’re on could very quickly lead to a handful of super schools with virtually unlimited budgets and having all the best talent while all the other schools are left uncompetitive.”

This divide isn’t just between Power 4 schools and lower division schools. There is already a substantial gap between the University of Texas’s athletic budget and the athletic budget for UT San Antonio.

I’m talking about the gap that already exists between the SEC and Big Ten and the other two P4 conferences, the Big 12 and ACC.

Last week we learned that the University of North Carolina is facing a $17 million dollar budget deficit for its athletic department this year with projections that the deficit could run up to $100 million in the next few years.

UNC is hardly the equivalent of a UTSA. We’re talking about a premiere athletic institution with multiple national championships across a wide variety of sports.

And yet, the Tar Heels took in nearly $40 million from the ACC for the 2021/2022 school year compared to $50 million that Vanderbilt took in from the SEC for that same time period.

The SEC numbers are expected to go up significantly this year with a new contract from ESPN following the addition of Texas and OU. Meanwhile, the ACC is locked into a deal with ESPN through 2036. That means the 10 million dollar gap from two years ago is expected to triple or quadruple beginning this year with little hope for ACC schools to gain ground. What’s more, the SEC’s TV contract comes up before the ACC’s deal allowing the SEC (and Big Ten) to negotiate another media rights deal which would presumably put further separation between the schools.

“I think it will make schools that might be in conferences that are not generating as much revenue as they can really look around for ways to make more revenue and keep trying to get into those other conferences,” Winter said.

We already know that Florida State and Clemson have filed suit seeking to get out of the ACC’s Grant of Rights (presumably to be able to move to either the SEC or Big Ten). If they are successful, then UNC would almost assuredly need to make a similar move in order to be able to simply be able to compete with Vanderbilt.

Or, to put it simply:

Haves = Vanderbilt Commodores
Have Nots = UNC Tarheels

SCHOLARSHIP CAPS GO BYE-BYE

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The elimination of scholarship caps as a result of the settlement could put other financial strains on university athletic departments.

Let’s use baseball as an example.

Current NCAA rules caps the number of scholarships available for D1 baseball teams at 11.7 scholarships to be divided between a maximum of 27 players on a 39-player roster. All players on athletic scholarship must receive a minimum of a 25 percent scholarship. That leaves room for eight walk-ons.

Under the proposed terms of the settlement, the cap on the number of scholarships would go away so that universities could provide scholarships to every single baseball player on the roster. Certainly, a school choosing to give full rides to every player (in addition to being able to participate in revenue sharing and their own NIL deals) would be able to recruit a much higher caliber of player than a school that self-limits how many scholarships it is offering.

For what it’s worth, the same is true for football where the NCAA currently mandates that the maximum number of scholarships available is 85, but schools can carry as many as 115 players on their roster.

That could allow larger, more well-funded universities, to take chances on players that need time to develop. I’m talking about the kind of athlete who, in the past, would be forced to choose between walking on at a school like UT versus taking a full-ride scholarship to play football at a school like Rice. Sound familiar?

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Michael Taaffe had the luxury of making that choice to bet on himself and go to his dream school, UT, and it paid off. He’s now a scholarship athlete and has earned plenty of playing time.

Moving forward, he won’t have to go as a walk-on – a luxury that some students can’t afford. That could create a more competitive roster for the bigger schools that can afford to offer more athletes, while smaller schools who can’t play ball at that level will miss out on some players they would have gotten in the past.

That is going to create a more competitive roster for the big schools … and a much more robust transfer portal for everyone.

But there is a note of caution beyond the expanding chasm between the haves and have-nots. While schools can pay to offer many more scholarships, they can’t go completely crazy.

There are still Title IX considerations which require universities to provide the same number of scholarships for women as they provide to men. That means that boosting football scholarships from 85 to 115 would require a school to also add an additional 30 scholarships for women – likely necessitating the addition of a new sport or two to the roster.

That is great news for women’s sports which is certainly on the rise in popularity … but a considerable financial outlay for the universities.

WHERE WILL THE MONEY COME FROM?

Ross Dellenger, the intrepid Yahoo reporter who has been at the forefront of the House vs. NCAA reporting, is out with a new piece Wednesday saying that schools are getting closer and closer to signing off on a deal to partner with a private equity firm.



According to Dellenger, schools are looking at a possible infusion of as much as $200 million. In return, the private equity partners would get a percentage of surplus revenue. If there is no profit, they would not receive any money.

It is a pretty safe bet for the venture capitalists. More people watched college football games last season than any season ever before and sports remain the one area where people want to watch the events live, not delayed. That provides a big impetus for advertisers.

When you combine the increased viewership with an expanded college football playoff, you can bet money that the media rights deals will continue to grow – providing private equity partners a really good chance to make their money back and then some.

WHAT IS CONGRESS’ ROLE IN THE FUTURE?

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NCAA President Charlie Baker was hired for this exact moment in time.

All of these cases that have roiled the collegiate landscape so far have been filed as antitrust cases.

Baker, the former Governor of Massachusetts, has been utilizing every tool at his disposal to get Congress to give the NCAA an antitrust exemption which he believes will bring stability to college athletics.

Baker says the House vs. NCAA settlement may finally pave the way for that to happen.

“It creates a framework that then makes it possible to have a different kind of conversation with Congress,” Baker said following a briefing with ACC coaches and administrators. “In many ways, I'm hopeful.”

Texas Senator Ted Cruz had previously said he thought it was a 50-50 proposition that Congress would act. The House settlement could up those odds – slightly.

“It could spur Congress to act,” Senator Cruz told Orangebloods. “I think the best outcome, which requires Congressional action, would be a scenario where the NCAA has the authority to set basic rules that protect student athletes’ NIL rights and preserve what is great about college athletics – which is why I’ve put forth draft legislation that would do just that.”

Most of the issue is bipartisan. In addition to Cruz, other Republicans including Senators Tommy Tuberville from Alabama and Jerry Moran of Kansas have also introduced bills. The same is true on the Democratic side where Senators Joe Manchin of West Virginia, Cory Booker of New Jersey and Connecticut’s Richard Blumenthal have also been sponsors of bills.

All sides say they want to protect student athletes’ abilities to make money off their own name, image and likeness and all parties say they want to bring stability to college athletics. But how we get there is where you start to see some partisan divide.

The big issues sticking point, even after the House settlement, remains whether student-athletes can be considered employees of universities and have the right to collectively bargain as union members.

“I fear that many of the proposals, particularly proposals that treat student-athletes as employees with unions, would imperil women’s and non-revenue sports,” said Cruz. “That would be a disaster. Congress should work hard to avoid that outcome as well as give a safe harbor to the NCAA, conferences and universities for setting rules that allow the system to work.”

The issue of employment and unionization is also not a straightforward partisan issue.

Connecticut Senator Chris Murphy co-sponsored legislation put forward earlier this year that would give athletes the right to organize.

“Instead of fighting athletes' rights in courts and spending millions on lobbying Congress, the NCAA and its members should start negotiating directly with players on revenue-sharing, health and safety protections, and more,” the Connecticut Democrat said in a statement. “This legislation would make it easier for the athletes to realize their power, form unions, and start to collectively bargain.”

But the senior Senator from Connecticut – Richard Blumenthal – who is also a Democrat – says he is not yet sold on the idea of student-athletes as employees.

“I’m hearing from coaches and athletic departments; they think it’s a terrible idea,” Blumenthal said. “A college president regarded it as an anathema.”

Beyond the complicated legal issues, the political calculus cannot be ignored either. None of the legislation proposed in Congress to date has even been able to make it out of a committee. It will be even harder to move forward with a bill this year with lawmakers focused on the upcoming elections.

“From the political aspect of it, I'm very skeptical that Congress will ever pass a law that gives the NCAA an antitrust exemption,” said Mit Winter. “That's a big ask. It may be possible.”

The issue is not going to go away.

The Dartmouth College men’s basketball team voted in March to unionize, and the National Labor Relations Board official ruled that the students were employees under federal labor law who had the right to form and join a union.

All of which to say that more lawsuits are inevitable.

It may be that House vs. NCAA is ‘the big one,’ but it could just as easily be that it is yet another foreshock with a bigger tremor just about to make its way through the courts.

TWEETS OF INTEREST:



The 2024 college football tv schedule has been coming out in drips and drabs. Wednesday, we learned some playoff games will end up on TNT. At least you NBA fans will be used to flipping over to TNT for playoff action.

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Fox Sports announced earlier this year that it is creating a slate of Friday night games.

Fox executive Mike Mulvihill was on the Joel Klatt Show this week and was excited about the chance to stake a claim to the Friday night time slot in a way that hasn't previously happened ... likening the potential to their Big Noon Saturday games.



Actually, if any of you are interested in how the networks pick the college football games, then this is an interview that is very much worth a listen. Mulvihill broke down Fox's process for doing the draft with ESPN, CBS, NBC and the other networks where they pick which games they want to showcase. (Technically, they pick which week they want the first pick of games.)

Friday nights may end up being a big deal, but it is going to be hard to draw in a lot of fans for whom Friday nights are dedicated to high school football. They're also going to have to do better than this slate. Iowa at UCLA and UCLA at Washington are probably the biggest games on Friday night.

I probably won't be catching many of these games unless I'm just bored and in need of a college football fix (which could happen).



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If only this were going on at the Big 12 baseball tournament ... it would be more entertaining.



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Who needs a bottle opener when you have a mullet?



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I think I saw this same bit in an ESPN commercial with Peyton and Eli Manning.



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Hey, I know how to raise the flag!



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These are just facts.

 
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