Northwestern Ruling Won't Lead to Mad Dash of College Endorsers

Next Up: Appeals and More Court Cases

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Credit: Northwestern University

The blockbuster ruling by National Labor Relations Board regional director Peter Sung Ohr that unpaid members of the Northwestern University football team can unionize has the potential to send the $16 billion business of big-time college sports up in smoke. But don't expect a firestorm of endorsement deals for college players or ads featuring them any time soon.

The decision could lead players at other schools to quickly try to unionize. It could help pave the way for college players to get a financial piece of their marketing rights. It could even spell the beginning of the end for the National Collegiate Athletic Association. And finally sweep away college sports' current economic model where "student-athletes" don't get paid a dime -- while college football coaches like Alabama's Nick Saban pocket over $5 million a year.

But college players have many legal hurdles to overcome before they get paid like pros -- or get paid at all. So before everybody gets carried away, let's look a the potential impact on sports marketing:

What happens next?

For now, the ruling only impacts students at private, not public schools, said Andrew Brandt, a sports business analyst at ESPN and director of Villanova University's Morad Center for the Study of Sports Law. The Northwestern Wildcats football team will vote to formally authorize a players union over the next month. The university will almost certainly appeal the regional NLRB decision to the full labor board in Washington.

Even if the national board upholds the regional ruling, Northwestern could still refuse to recognize the players union -- and appeal to the U.S. Court of Appeals, said sports economist Andrew Zimbalist of Smith College. During any upcoming legal fight, the school will have the backing of the NCAA, which publicly argued this week that there's no need to "throw away" a system that helps millions of athletes attend school.

"We strongly disagree with the notion that student-athletes are employees," said NCAA chief legal officer Donald Remy in a statement.

Will college players get control over their own marketing rights?

Maybe. But not right away. The NU case is more about the players' right to unionize and bargain for fewer training hours, better working conditions and potentially some kind of minimum wage, said Mr. Brandt. The explosive issue over who should get paid for player images used for promotional purposes will be decided by another closely-followed challenge to college sports' ruling structure: the class-action, antitrust lawsuit filed against the NCAA by ex-UCLA basketball player Ed O'Bannon. The NCAA had asked for the suit to be dismissed. But in a major victory for Mr. O'Bannon, a federal judge recently ruled the case should go ahead. It's expected to go to trial in June.

"That would be a historic case if some marketing [and] publicity rights are given to players who are amateurs," Mr. Brandt said.

Will individual players be able to cut their own endorsement deals?

Probably. Currently, college players cannot endorse products or services without getting kicked out of the NCAA. But if Mr. O'Bannon wins, "it's quite likely players will be able to endorse products," said Mr. Zimbalist. But this potential gold mine for players raises a host of problems too. Say a star college QB signs his own shoe deal with Nike. Would that conflict with his school's official outfitting deal with a rival athletic company such as Under Armour? Probably. Good luck figuring that out.

And don't expect any big-time marketers -- the companies that buy naming rights to bowl games and pay top dollar for ads in stadiums, arenas and during TV coverage -- to go anywhere near individual athletes until the legal dust settles.

What other obstacles are there for college athletes?

Plenty. If college players effectively become employees, schools such as Northwestern could potentially hire and fire them the way they do any employees, said Mr. Brandt. Then there's the outside questions raised by the ruling. Will all players (including female athletes covered by Title IX) be unionized? Will it just affect revenue-producing sports such as football and basketball? If student-athletes want to be treated like pros, will the IRS tax their scholarship money?

"This decision is creating a lot more questions than answers," noted Mr. Brandt.

If college athletes get their way, will NCAA survive in its current form?

That's the big question. As ESPN analyst and former college basketball player Jay Bilas said this week, the 104-year old NCAA was born out of scandal when President Theodore Roosevelt convened White House meetings to address the alarming numbers of deaths and injuries from the violent sport of college football. If modern college players are able to finally overturn the model of unpaid student-athletes, the NCAA -- no matter how big a business it is -- may be history too.

"The future of the NCAA would be very much in the air," said Mr. Zimbalist. "Either it would have to change dramatically. Or it would face competition and eventually either become a shadow of its current self or face its demise."

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