News: The college sports business enters a new era of uncertainty

Tuesday, May 28, 2024

The college sports business enters a new era of uncertainty

May 28, 2024

With help from Becca Carballo and Bianca Quilantan

Charlie Baker speaks on a stage.

NCAA President Charlie Baker speaks at his first state of college sports address at the association’s annual convention on Jan. 10, 2024, in Phoenix, Arizona. | Ross D. Franklin/AP

JUMP BALL — The so-called “amateur era” of college sports is ending.

— Current and former college athletes are in line to receive life-altering sums of money directly from higher education institutions as early as next year, thanks to a pending multibillion-dollar court settlement that received preliminary approval from college officials last week.

— But a period of sweeping change is not over. Huge questions over whether athletes are school employees — and whether Congress will step in to protect college sports’ overseers — are still in play.

— The settlement terms must receive final approval from a federal judge after a monthslong court process. But they are historic, and offer the NCAA new political leverage it will use to press federal lawmakers to block athletes from employment rights.

— “I always believed we would see this day,” said Jeffrey Kessler, the Winston & Strawn co-executive chair who has represented athletes in court as part of long-running efforts to challenge NCAA rules that have already netted a historic Supreme Court decision. “I just didn’t know how long it was going to take.”

— The settlement would resolve three pending antitrust lawsuits targeting NCAA limits on compensation and benefits athletes can receive for their work and use of their publicity rights.

— Schools and the NCAA will split the cost of nearly $2.8 billion in back damages to athletes over a 10-year period under the terms of the agreement. Schools will also have the option to share revenue they generate with future athletes. Attorneys estimate the total value of new payments and benefits that may be shared with athletes will exceed $20 billion over 10 years.

— “Going forward, we will for the first time have a system where athletes can meaningfully share in the tremendous amount of revenues they generate in these sports,” Kessler told your host.

— “It will create a world of equity. And it will, I think, make a product that everyone will feel better about in college sports,” he said. “Going backwards, we’ll be able to start distributing the almost $3 billion in damages that have been agreed to over the next 10 years.”

— Expect the NCAA to make similar points to skeptical lawmakers. Officials emphasize the proposed settlement is set to deliver athletes benefits some members of Congress have long demanded — but does not resolve administrators’ desire to be shielded from efforts to turn athletes into school employees who can demand salaries and union protections.

— “This is a massive step forward for student-athletes and college sports, but it does not address every challenge,” NCAA President Charlie Baker wrote to schools on Friday, pointing to National Labor Relations Board cases and a lawsuit before the 3rd Circuit Court of Appeals that is also testing whether college athletes count as employees under federal law.

IT’S TUESDAY, MAY 28. WELCOME TO MORNING EDUCATION. If Donald Trump came to the Libertarian National Convention to make peace on Saturday, it could hardly have gone worse.

Reach out with tips to today’s host at jperez@politico.com and also my colleagues Becca Carballo (rcarballo@politico.com), Bianca Quilantan (bquilantan@politico.com) and Mackenzie Wilkes (mwilkes@politico.com).

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Higher Education

Signs are displayed outside a tent encampment at Northwestern University.

Signs are displayed outside a tent encampment at Northwestern University on April 26 in Evanston, Illinois. | Teresa Crawford/AP

COMMUNICATION BREAKDOWN — Universities risk losing their ability to coordinate with the FBI even as safety concerns mount around campus protests, according to industry lobbyists who warn a recent change in agency protocol has deprived institutions of a key line of communication at a uniquely delicate moment.

— Schools and a cluster of trade groups once worked with an FBI academic liaison inside the bureau’s Office of Private Sector — a single point of contact that higher education organizations described as a coordinator between schools and local field offices for work on counterterrorism, counterintelligence, cybersecurity, and criminal investigations.

— But the liaison’s work was recently transferred into the FBI’s counterintelligence division, prompting complaints from college representatives who are now pushing FBI Director Christopher Wray to undo the bureau overhaul.

— “Given the success of the Academic Liaison program, it is unclear to us why it has recently been moved to the Counterintelligence Division, and we are concerned that this will limit the effectiveness of the program to coordinate across FBI divisions,” the American Council on Education, Association of American Universities, Association of Public and Land-grant Universities, and Council on Governmental Relations said in a letter to Wray this month.

— When Historically Black Colleges and Universities were targeted with bomb threats in 2022, for example, industry groups said the FBI’s now-former academic liaison coordinated a briefing call for college associations and targeted institutions of higher education with FBI divisions.

— “Our institutions have recently asked for similar outreach regarding antisemitism threats on our campuses but have been stymied by not having a coordinating entity that can work across all divisions and directorates of the FBI,” the groups wrote.

— The FBI confirmed it received the groups’ letter but declined to comment on why the academic liaison program was moved into the counterintelligence division and when the restructuring occurred.

— “We value our partnerships with law enforcement, industry, academia, and other community partners,” the bureau said in a statement to POLITICO. “We work every day to ensure positive engagement through FBI Headquarters and each of our field offices.”

— In response to unrest on college and university campuses, the bureau said it also prepared a report for higher education entities, hosted calls with law enforcement agencies and associations including the International Association of Campus Law Enforcement Administrators and provided guidance to field offices on remaining engaged with campus safety partners.

LABOR WOES — Weeks of campus unrest over the Israel-Gaza war are increasingly dragging in President Joe Biden’s organized labor allies, heightening tensions with a vital voting bloc he needs in November, POLITICO’s Nick Niedzwiadek reports.

— Labor unions including the Biden-aligned United Auto Workers, which expanded in recent years to represent graduate instructors and other campus workers, are now condemning how some college leaders have responded to anti-war protesters.

— The UAW, which represents about 48,000 people across the University of California, has accused the system of infringing on their members’ right to improve their workplace — and are demanding amnesties for protesters and changes in university policies that relate to the war.

— The University of Southern California, Massachusetts Institute of Technology and a trio of Ivy League schools are also each facing unfair labor practice allegations stemming from protests filed with the National Labor Relations Board. Collectively, the cases put a host of novel questions about the First Amendment and workplace rights at the doorstep of the independent agency’s Democratic majority and Biden’s handpicked general counsel, Jennifer Abruzzo.

THE FAFSA ROLLOUT

ICYMI — The Education Department says it has now processed more than 10 million 2024-25 federal student aid forms.

— About 41 percent of high school students graduating in 2024 have so far completed the Free Application for Federal Student Aid, according to the National College Attainment Tracker FAFSA Tracker.

— That’s down 15.5 percent from this time last year, though the department on Friday touted a narrowing gap as it announced more than 65 organizations received funding through an up to $50 million grant program for organizations that can boost flagging submissions.

— “Thanks to the countless educators, schools, financial aid officers, and community partners across the country who have worked hard, along with the Department, to motivate students to fill out FAFSA, we have real momentum,” Education Secretary Miguel Cardona said in a statement.

— The American Council on Education and various other interest groups also sent a letter to Congress last week calling on lawmakers to consider specific proposals the groups believe will improve the financial aid system.

Title IX

HITTING THE ROAD — Dozens of advocates rebuking the Biden administration’s new Title IX rule are launching a summer bus tour across more than a dozen states to drum up support and highlight their efforts to stop the regulations.

— The tour, hosted by the Our Bodies, Our Sports coalition, will include guest speakers such as former Rep. Tulsi Gabbard (I-Hawaii), who introduced one of the first bills to bar transgender women from women’s sports teams; Selina Soule, a lead plaintiff in one of the first lawsuits aiming to block trans students from women’s sports; and Riley Gaines, an Independent Women’s Forum ambassador.

— While the Biden administration said it would determine transgender sports eligibility in a separate rule, there are still several challenges looking to halt the rule that provides discrimination protections for students based on their gender identity. The tour launches on Wednesday.

Syllabus

— Trump told donors he will crush pro-Palestinian protests, deport demonstrators: The Washington Post

— School choice programs have been wildly successful under DeSantis. Now public schools might close: POLITICO

— The colleges where you’re most likely to have a positive return on your investment: The Wall Street Journal

— How Joe Biden’s climate push fell flat with Gen Z voters: The Financial Times

— Uvalde families sue Meta and ‘Call of Duty’ publisher over alleged links to gun violence: POLITICO

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