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Confusion Over Stipends Could Be Disastrous for NCAA

When people who do not work in college athletics get things wrong about the NCAA, it is significant, but not that damaging. There are plenty of age old misunderstandings about NCAA rules, like athletes being limited in how much they can earn in a job, that would be better if they were cleared up. But since in many cases the NCAA has already fixed the issue that is being incorrectly reported or argued, there is only so much the NCAA can do and only so much exposure.

But when people within college athletics get things wrong or are imprecise about NCAA policies, it is much more harmful to the NCAA. No issue has highlighted this more than ongoing debate over increasing scholarships past the full grant-in-aid. Oklahoma head football coach Bob Stoops did it in the spring. Stanford’s David Shaw followed at Pac-12 Media Days. The latest is veteran Oregon State athletic director Bob De Carolis.

De Carolis was asked how he felt about paying college athletes and this was the beginning of his response:

Given that the scholarship has never changed since who knows when, there’s a way to do it under the guise of cost of attendance.

De Carolis goes on to make it clear he is talking about cost-of-attendance scholarships or a stipend to cover a portion of the gap between a full grant-in-aid and cost of attendance. But by starting his response to a question about amateurism this way, De Carolis frames the stipend debate as an amateurism issue, which it is not.

If you take amateurism off its claimed moral high ground and stop assuming or ascribing motives to amateur athletes, you’re still left with an eligibility rule. At its most basic, amateurism is just another way to separate who can play in an organization’s competitions and who cannot. At some level, amateurism rules can be judged not based on whether they are fair or not, but whether they follow the organization’s definition of amateurism.

The NCAA’s record here is mixed. For starters, the NCAA has no single bylaw that explains the root difference between a professional and amateur athlete. Institutions are asked to maintain a “clear line of demarcation” between professional and amateur athletics, but have no guidance about where that line starts. Even the NCAA’s definition of a professional athlete is a bit circular:

A professional athlete is one who receives any kind of payment, directly or indirectly, for athletics participation except as permitted by the governing legislation of the Association.

Some reserve engineering reveals that the line between amateur and professional according to the NCAA is profit. The types of payments that are allowed by NCAA legislation are ones which cover actual and necessary expenses of competing in the sport. So when judging an individual amateurism bylaw, one of the most basic tests is whether it is based on athletes profiting from their ability or reputation. Signing a professional contract does. Entering a professional draft probably does not. Hiring an agent or selling your likeness or memorabilia are questionable.

This brings us back to stipends. Are cost-of-attendance scholarships or stipends for miscellaneous expenses profit? No, because everyone from the NCAA to every single one of its member institutions to the federal government agrees that those payments cover actual and necessary expenses of attending college. And because attending college is required to be a student-athlete, those are actual and necessary expenses of participating in collegiate athletics. Paying for trips home for the holidays is different only in degree than providing uniforms.

This is mostly a semantic argument but that does not mean it is not an important one. Comments like De Carolis’s are damaging to the NCAA because they undermine one of the NCAA’s own arguments: that athletes are receiving a fair exchange. Lumping stipends in with pay-for-play fuels the argument that the athletic scholarship already means athletes are not amateurs. To paraphrase Jack Sparrow, it helps establish that the principle of pay-for-play advocates is sound, and now we’re just haggling over price.

More important than what advocacy groups or the media think about stipends and pay-for-play is what courts think. The NCAA’s antitrust exemption rests on shaky ground, dicta in a Supreme Court case that had nothing to do with amateurism rules. This is the critical passage from NCAA v. Board of Regents:

Moreover, the NCAA seeks to market a particular brand of football — college football. The identification of this “product” with an academic tradition differentiates college football from and makes it more popular than professional sports to which it might otherwise be comparable, such as, for example, minor league baseball. In order to preserve the character and quality of the “product,” athletes must not be paid, must be required to attend class, and the like. And the integrity of the “product” cannot be preserved except by mutual agreement; if an institution adopted such restrictions unilaterally, its effectiveness as a competitor on the playing field might soon be destroyed. Thus, the NCAA plays a vital role in enabling college football to preserve its character, and as a result enables a product to be marketed which might otherwise be unavailable. In performing this role, its actions widen consumer choice — not only the choices available to sports fans but also those available to athletes — and hence can be viewed as procompetitive.

To maintain this argument, the NCAA must “preserve the character” of its product, namely though rules governing amateurism and academic eligibility. Again, this is a circular argument: the NCAA’s rules are legal under antitrust law because the NCAA has adopted them. But even circular reasoning from a majority Supreme Court opinion can carry you pretty far, almost 30 years in the NCAA’s case.

As soon the NCAA fails to offer a product that can be distinguished from professional sports, it could potentially lose this argument and no longer be able to regulate at all. Statements like De Carolis that fail to draw a clear line between pay-for-play (i.e. professionalization) and cost-of-attendance stipends (or even worse tie the two together) add fuel to the claim that the NCAA is no longer “preserving the character” of its product and its rules are not procompetitive because the NCAA is not offering anything different than minor league baseball or the NFL.

This is mostly a messaging problem, and one that the NCAA can solve. It is almost guaranteed to create its own backlash. Envision the memo that is leaked asking athletic directors, coaches, conference commissioners, and media relations staff to “stay on message” with a set of talking points about why stipends do not make athletes professionals. Because the NCAA has a decent logical argument and the stakes are potentially so high, the criticism of such a public relations campaign is worth it if the NCAA can make it clear stipends and amateurism are two separate issues.

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