The House case

[nelsonmuntz]

Sources: New college athlete compensation model may cost power schools $300M each over 10 years

The college sports industry is moving closer an athlete compensation system. At this point, it seems inevitable.

sports.yahoo.com

This case is massive for college athletics, not so much because it is an overwhelming victory for those attacking anti-competitive behavior by the NCAA, and more specifically the P4 (which it will be), but because the P4 are surrendering completely. They know they will lose in court, again, so they are using this case to set up a very expensive framework for the future.

I think there may be one more major lawsuit, and the plaintiffs would be one or more of the colleges locked out of the P4. Oregon State and Washington State are the most likely plaintiffs, but UConn or Memphis could also be on the list. SMU is also a possibility.

I suspect that lawsuit, if it happens, will come after the prospective plaintiffs see what happens with the post-House shakeout. Because as the article states, several schools are not on board with this future model of college athletics. Two things that seem highly likely:

1) every conference will go to an uneven revenue split, which could take many forms.
2) several schools are going to get off the hamster wheel of big time college/pro athletics. Northwestern, Vanderbilt, Stanford and Cal are the most likely candidates.

This is developing into the opening UConn needed to find a home in a major conference.

 

[FfldCntyFan]

Everything else aside (and there is quite a bit), if a football program (Baylor in this case) is looking to an NFL franchise for information on how to successfully manage a roster and payscale, why would they choose the Cardinals?

 

[uconnyankee]

Sources: New college athlete compensation model may cost power schools $300M each over 10 years

The college sports industry is moving closer an athlete compensation system. At this point, it seems inevitable.

sports.yahoo.com

This case is massive for college athletics, not so much because it is an overwhelming victory for those attacking anti-competitive behavior by the NCAA, and more specifically the P4 (which it will be), but because the P4 are surrendering completely. They know they will lose in court, again, so they are using this case to set up a very expensive framework for the future.

I think there may be one more major lawsuit, and the plaintiffs would be one or more of the colleges locked out of the P4. Oregon State and Washington State are the most likely plaintiffs, but UConn or Memphis could also be on the list. SMU is also a possibility.

I suspect that lawsuit, if it happens, will come after the prospective plaintiffs see what happens with the post-House shakeout. Because as the article states, several schools are not on board with this future model of college athletics. Two things that seem highly likely:

1) every conference will go to an uneven revenue split, which could take many forms.
2) several schools are going to get off the hamster wheel of big time college/pro athletics. Northwestern, Vanderbilt, Stanford and Cal are the most likely candidates.

This is developing into the opening UConn needed to find a home in a major conference.

Northwestern isn’t dropping out of BIG. They are building a new stadium

 

[nelsonmuntz]

Northwestern isn’t dropping out of BIG. They are building a new stadium

Those two decisions are only loosely related. I think Northwestern would be more profitable and popular with its alumni in a league with similar schools.

 

[Kolumbo]

Northwestern isn’t dropping out of BIG. They are building a new stadium

Northwestern had the smallest stadium in the conference, and its new stadium will be even smaller by 25% at just 35k seats. Northwestern may not drop out of the Big 10 but if anything, the new stadium might signal that Northwestern is ready to move on from college/pro football.

 

[CTFAN4LIFE]

Northwestern had the smallest stadium in the conference, and its new stadium will be even smaller by 25% at just 35k seats. Northwestern may not drop out of the Big 10 but if anything, the new stadium might signal that Northwestern is ready to move on from college/pro football.

Spending 800m on a new football stadium seems like they're investing, not divesting.

 

[Kolumbo]

Spending 800m on a new football stadium seems like they're investing, not divesting.

Northwestern is investing. Most of the cost is from a private donation and the cost is barely pocket change for NU.

 

[CTFAN4LIFE]

Northwestern is investing. Most of the cost is from a private donation and the cost is barely pocket change for NU.

Right, but any private donor giving a huge sum of money like this gets all sorts of promises from the university that their donation will be leveraged and backed up by additional university investment. In this case, the donors wouldn't haven't provided a hefty sum for what would become a G5 program's football stadium.

 

[nelsonmuntz]

Right, but any private donor giving a huge sum of money like this gets all sorts of promises from the university that their donation will be leveraged and backed up by additional university investment. In this case, the donors wouldn't haven't provided a hefty sum for what would become a G5 program's football stadium.

You think Northwestern donors are demanding that the school gets pummeled by Ohio State and Michigan from now to the end of time?

If you gave Northwestern's students and alumni the choice to join a league of Stanford, Vanderbilt, Rice, Cal and (name a few other elite schools) or stay in the Big 10, the elite school league would win by about 80% to 20%.

 

[Patman]

You think Northwestern donors are demanding that the school gets pummeled by Ohio State and Michigan from now to the end of time?

If you gave Northwestern's students and alumni the choice to join a league of Stanford, Vanderbilt, Rice, Cal and (name a few other elite schools) or stay in the Big 10, the elite school league would win by about 80% to 20%.

They are currently doing exactly that at a very large penny. Why don't you go to the Northwestern boards and ask.

 

[nelsonmuntz]

They are currently doing exactly that at a very large penny. Why don't you go to the Northwestern boards and ask.

I am not going to debate you in your fantasy world where Alston and House do not exist and cable is still the wave of the future.

I miss the old days where a poster would slink off to oblivion or at least change his handle when he was as wrong as you were. It wasn’t like I has holding you to a prediction made months or years earlier, you had called bullspit on back pay days before it came public that the P4 had already conceded to a multi billion dollar settlement.

 

[CTFAN4LIFE]

You think Northwestern donors are demanding that the school gets pummeled by Ohio State and Michigan from now to the end of time?

Ah, probably not - who wants to get pummeled?

If you gave Northwestern's students and alumni the choice to join a league of Stanford, Vanderbilt, Rice, Cal and (name a few other elite schools) or stay in the Big 10, the elite school league would win by about 80% to 20%.

You got actual data on this, or you spitballing?

 

[uconnyankee]

You think Northwestern donors are demanding that the school gets pummeled by Ohio State and Michigan from now to the end of time?

If you gave Northwestern's students and alumni the choice to join a league of Stanford, Vanderbilt, Rice, Cal and (name a few other elite schools) or stay in the Big 10, the elite school league would win by about 80% to 20%.

Nope…. NU is not U Chicago. They are very proud of athletic history and appreciate the uphill battle they have.

Don’t see them pulling out of big time athletics.

 

[nelsonmuntz]

Ah, probably not - who wants to get pummeled?

You got actual data on this, or you spitballing?

I don’t think Northwestern is interested in doing what it takes to compete with the Michigan’s and Ohio State’s, which could lead to such a permanent divide competitively that there is no point in continuing to play those games every year. If elite school alumni cared about being competitive against the athletic powers, they would have done something about it a long time ago. These schools have massive endowments, but Northwestern and Vanderbilt have sucked in forever. It is not like these schools couldn't do anything about it, they simply chose not to.

Higher education is also going through a massive transformation, and these schools are re-evaluating every aspect of their enterprise, including where athletics sits within it. When the SEC and Big 10 were sending them big checks without them having to do anything, inertia led Vanderbilt and Northwestern to doing nothing about the fact that they generally were not competitive. Now, those football programs are going to become breakeven, at best, or completely non-competitive, and Vandy and NW Administrations have likely already asked themselves how a football game against Mississippi State or Minnesota really helps the school in any way in terms of positioning to attract top students or drive alumni engagement. BUT, a game against Stanford followed by a game against Rice followed by a game against Cal would be exactly the kind of positioning those Administrations might like.

I have made my prediction, and you can agree or not. I actually made this prediction almost two years ago, before House was even on anyone's radar, and before the impacts of the student demographic cliff have become more pronounced. Based on some of the quotes and off the record background in the story in the OP, it looks like some schools have already been thinking about whether they want to continue to compete at the highest level. Logically, the crazy prediction at this point would be that every school in the P4 leagues is going to continue to march in lockstep to the same future.

 

[nelsonmuntz]

Nope…. NU is not U Chicago. They are very proud of athletic history and appreciate the uphill battle they have.

Don’t see them pulling out of big time athletics.

There is going to be "competing in bit time athletics", and really competing in big time athletics. The elite academic schools could still be good, and generate a lot of revenue, in a league with each other rather than playing a bunch of random state schools who are only in the league with these elite schools out of inertia.

As I said, it was easy to just leave the athletic department alone when it was generating a lot of revenue with little associated costs. Now it is generating a lot of costs too, and I do not see a lot of strategic rationale for Northwestern staying in the Big 10.

Read the article in the OP. Some schools are already re-evaluating whether they want to stay at this level of spending and effectively become a rival pro league to the NFL and NBA. Who do you think those schools are if they are not Northwestern and Vanderbilt?

 

[uconnyankee]

Those two decisions are only loosely related. I think Northwestern would be more profitable and popular with its alumni in a league with similar schools.

Very wrong. Good friend is NU alum. They are in BIG. It’s part of their identity.
I don’t think NU has a money problem.

 

[nelsonmuntz]

Very wrong. Good friend is NU alum. They are in BIG. It’s part of their identity.
I don’t think NU has a money problem.

You think every P4 team is going to just keep marching along with those leagues. I heard you the first time. I love people coming down hard on a position (see @Patman @Rufus @John arguing last week that there would be no back pay for athletes, days before it was reported that the P4 are negotiating backpay for athletes). That is the great thing about this board. You have 10 minutes after posting to change a position, and after that, it is available for eternity.

 

[Rufus]

You think every P4 team is going to just keep marching along with those leagues. I heard you the first time. I love people coming down hard on a position (see @Patman @Rufus @John arguing last week that there would be no back pay for athletes, days before it was reported that the P4 are negotiating backpay for athletes). That is the great thing about this board. You have 10 minutes after posting to change a position, and after that, it is available for eternity.

Umm..........I never argued there would be no backpay for athletes????

 

[nelsonmuntz]

Very wrong. Good friend is NU alum. They are in BIG. It’s part of their identity.
I don’t think NU has a money problem.

You took a swing at me early in the streaming thread. Turned out I got a lot right there.

Streaming College Sports

ESPN was on every cable box in the country, and had a critical mass of sports programming to give it good positioning on those boxes, often with multiple spots in the first 50 channels. That real estate in the cable channel directory was really valuable, 20 years ago. In a streaming world...

the-boneyard.com

 

[John]

You took a swing at me early in the streaming thread. Turned out I got a lot right there.

Streaming College Sports

ESPN was on every cable box in the country, and had a critical mass of sports programming to give it good positioning on those boxes, often with multiple spots in the first 50 channels. That real estate in the cable channel directory was really valuable, 20 years ago. In a streaming world...

the-boneyard.com

Taking credit again for being broke clock right.

 

[Drew]

Why would SMU (who is in the ACC) start or join a lawsuit in regards to being left out of the P4?

 

[nelsonmuntz]

Taking credit again for being broke clock right.

I really nailed the "UConn should be in the Big East" threads going back 13 years. I KILLED IT in those threads. I don't want to turn this thread into all the times I got it right, because I get it right a lot. I have limited insider connections to UConn (a couple of friends drop an interesting tidbit for me every few years), and I came up with all of this on my own. That's how I roll.

 

[Drew]

Nelson, I appreciate your dedication to this Northwestern thing, but it’s so far off base and blatantly just incorrect that I’m not even going to spend a ton of time trying to convince you otherwise. If you’re of the mindset that they’re building an $800M football stadium so they can play Penn and Harvard you’re more lost than anyone on this board is, including Shizzle.

 

[nelsonmuntz]

Why would SMU (who is in the ACC) start or join a lawsuit in regards to being left out of the P4?

Because the anti-competitive nature of the conference affiliations forced SMU to take a wildly below market deal purely because of the monopoly power of the P4. This would actually probably be the easiest potential case to litigate damages for, it is just a question of whether it would be in SMU's interest to do it.

I admit this one is unlikely, but I could see SMU threatening this if it really wanted out of the ACC or wanted to renegotiate its deal in a couple of years.

As I have said on the Boneyard for over 2 decades, the entire enterprise of major college sports is an anti-trust violation the way it is currently structured, and that is why it ALWAYS loses to any serious legal challenge.

 

[nelsonmuntz]

Nelson, I appreciate your dedication to this Northwestern thing, but it’s so far off base and blatantly just incorrect that I’m not even going to spend a ton of time trying to convince you otherwise. If you’re of the mindset that they’re building an $800M football stadium so they can play Penn and Harvard you’re more lost than anyone on this board is, including Shizzle.

I am not dedicated to anything Northwestern. I am just making an observation that Northwestern in the Big 10 is a bad fit for both sides, and the economic reason to stay there just became a lot less compelling, and may continue to get even less compelling if the Big 10 goes to an unequal revenue split. Maybe nothing happens, but if you are looking for points of instability in the conference landscape, the status of the elite academic schools that play D1 football stands out.

 

[Kolumbo]

I've also wondered how lax the top academic schools are with academic requirements for athletes. I've always assumed Northwestern and Vandy were very strict while Michigan and Texas and certainly UNC probably didn't care too much, but I don't know. It would seem the transfer portal would put NU at a disadvantage because the academics would be a big hurdle for many players.

Northwestern could still have a proud athletic tradition outside of the Big 10 and continue winning women's lacrosse championships while playing in another conference. The Ivy League schools are still proud of their storied programs while they compete against each other.

NU is building a new stadium and money is no object, but rather than a bigger stadium more like its conference mates, it is building a smaller MWC or AAC sized stadium. Imagine if UConn received a B1G invitation and decided to build a smaller stadium. Whoa, Nellie!!

 

[uconnyankee]

You think every P4 team is going to just keep marching along with those leagues. I heard you the first time. I love people coming down hard on a position (see @Patman @Rufus @John arguing last week that there would be no back pay for athletes, days before it was reported that the P4 are negotiating backpay for athletes). That is the great thing about this board. You have 10 minutes after posting to change a position, and after that, it is available for eternity.

You specifically said Northwestern.
I’m telling you, based on conversations with an NU alum, they are not going to walk away from BIG.
Now you’re changing the argument to be ‘EVERY P4 team’…

Will some schools pull back? Probably is a good guess. I would not bet on NU being one of them.

if anyone changed positions, it was you.

 

[nelsonmuntz]

One practice the P4 are engaging in which is a clearly anti-competitive practice is the 9 game schedule. The 20 game basketball schedule is also not on particularly firm ground. These scheduling practices would likely cost the majors some money if it was challenged by the G5.

There is a lot of legal precedent for enforcement against this kind of practice of restrictive scheduling. One of the more well known is that in the 80's, and I think into the 90's, Coca Cola used to require grocery stores to have exclusive promotions for all its products, focused on the colas, for 26 weeks of the year. By exclusive, the grocery store could not run another cola promotion the same week it was running one for Coca Cola. But shockingly, Pepsi also required grocery stores to commit to 26 weeks of exclusive promotions every year. Which meant that no other cola company could run a promotion at the grocery stores.

It is weird that these schools, many of whom have excellent law and business programs, never bothered to check with their own professors before they engaged in a bunch of stupid and obviously illegal behavior.

 

[Drew]

How in the world is a league playing 9 conference games an anti-competitive act? And by the way- only 2 of the 4 play 9 game league schedules

 

[billybud]

I think that some of us on this board have read the John Gresham novels, watched every episode of the Lincoln Lawyer and L.A. Law and have earned our JD in TV Law....

Count me in...I have watched every episode of the Lincoln Lawyer and read every book in the series, read all of the Gresham novels, and watched Judge Wapner on the People's Court.