NCAA getting sued...

[WarTiger 3,901]

Feel free to opine....

NCAA might face damages in hundreds of millions

By Tom Farrey

ESPN The Magazine

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LOS ANGELES -- As a UCLA linebacker in the late 1990s, Ramogi Huma

left college after four years with $6,000 in credit card debt. His

scholarship paid for tuition, room, board and required books but not

incidentals such as phone bills and travel expenses. Coming from a

lower-income family, he lacked the funds to cover the difference.

"That's where MBNA came in and cleaned house," Huma said of his

high-interest credit card.

After graduation, Huma lobbied for a bona fide full ride for NCAA

athletes, whose standard scholarship package, called a grant-in-aid,

is equal to an amount about $2,500 a year less than the official cost

of attendance. The NCAA wouldn't budge, despite supportive statements

made by association president Myles Brand about raising the cap.

Now it has come to this: A federal antitrust lawsuit filed late Friday

in Los Angeles seeks to prohibit the NCAA from telling member colleges

they cannot offer athletic scholarships up to the full cost of

attendance -- and could expose the NCAA to hundreds of millions of

dollars in damages for past wrongs.

The class-action claim was brought on behalf of Division I-A football

players and major-college basketball players, whose programs generate

the overwhelming amount of revenue that flows into college athletic

departments. Under antitrust law, any current scholarship athlete, as

well as any player in the past four years, qualifies as a plaintiff.

The suit does not list a damage amount but is structured in a way that

suggests the NCAA pay a heavy price should the court find that the

association acted illegally in its capping of scholarship costs. The

lawsuit applies to 144 colleges, so the 20,000 or so affected athletes

would have been shorted a potential $117 million, an aggregate figure

that represents the gap between the grant-in-aid and the official cost

of attendance over the past four years.

Damages get trebled under antitrust law, pushing the potential penalty

to $351 million.

NCAA's Most Profitable Basketball Programs (In Millions)

Revenue Profit

Louisville $18.5 $13.1

Arizona $16.6 $12.5

North Carolina $15.0 $10.2

NC State $11.4 $9.0

Illinois $11.3 $8.1

Indiana $11.9 $8.1

Wisconsin $12.0 $8.1

Minnesota $10.4 $7.6

Ohio State $11.4 $7.4

Kentucky $12.9 $7.2

Source: U.S. Dept. of Education from 2004-05 academic year

Huma is not a plaintiff, as his college career ended in 1998. But as

chairman and founder of the Collegiate Athletes Coalition, an advocacy

group, he helped line up the athletes whose names are on the lawsuit

-- Stanford's Jason White and UCLA's Brian Polak, both former football

players, and former University of San Francisco basketball player

Jovan Harris.

Contacted by ESPN, the legal team bringing the claim declined to make

any of the athletes available for interviews. The lead lawyers,

Stephen E. Morrissey and Maxwell M. Blecher, offered no comment on the

case.

"While big-time college sports have become a huge commercial

enterprise generating billions in annual revenues, the NCAA and its

member institutions do not allow student athletes the share of the

revenues that they would obtain in a more competitive market," the

lawsuit states. It alleges that "by denying athletes the benefits of

competition, the [grant-in-aid] cap has imposed a lower standard of

living and significant hardships on many student athletes."

NCAA spokesman Erik Christiansen said the NCAA would not comment until

it had a chance to read the lawsuit.

In the past, the NCAA has taken the position that it needs to control

all terms of the athletic scholarship in order to preserve its notions

of amateurism and what it calls "the unique character" of college

sports. Some universities also claim they cannot afford to give an

extra $2,500 to athletes.

In 2003, though, Brand came out in favor of the proposal, suggesting

that the additional funds could be drawn from the NCAA's 11-year, $6

billion television contract with CBS.

"We should provide student-athletes with the full cost of attendance,"

he said at the time.

The NCAA membership subsequently declined to move on his recommendation.

NCAA's Most Profitable Football Programs (In Millions)

Revenue Profit

Texas $53.2 $38.7

Georgia $50.9 $38.3

Michigan $46.4 $35.7

Alabama $42.9 $28.9

LSU $39.7 $27.5

Florida $43.3 $27.1

Notre Dame $41.8 $26.7

Ohio State $51.8 $26.1

Texas A&M $37.3 $25.2

Auburn $40.6 $24.2

Source: U.S. Dept. of Education from 2004-05 academic year

Unlike under Brand's idea, the plaintiffs do not ask that colleges be

required to pay the cost of attendance, only that universities be

given the option to do so with their revenue-producing athletes. They

say most programs can easily afford to pay the additional $245,000 a

year that would bring the 85 football and 13 men's basketball players

up to the desired level, even if the NCAA does not step up to cover

the costs. For schools with a basketball team, but no Division I-A

football team, the increase would be $32,500.

Rodney Fort, a Washington State University economics professor who has

worked as a consultant for the Pacific-10 Conference, expects the NCAA

to fight the lawsuit aggressively.

"The NCAA will argue that losing this will mean the end of college

sports as we know it," said Fort, author of the 2004 textbook

"Economics of College Sports." "They'll say that paying up to the cost

of attendance will be the death knell of non-revenue men's sports,

that it will deny some kid a chance to play NCAA golf."

Fort doubts the veracity of that claim. But he does not doubt the NCAA

could be persuasive before a jury.

"There's all sorts of emotional mumbo-jumbo not based on fact that the

NCAA has been using for 100 years to support its model," he said.

Nearly all of the top 60 football and top 75 basketball programs are

profitable. University of Texas football set the pace in the 2004-05

academic year by taking in $53.2 million in revenue, with expenses of

$14.5 million, according to a report filed by the school with the U.S.

Department of Education. Expenses are limited in part because schools

cannot bid on players in the same way they do coaches. After leading

the Longhorns to the national championship last season, Mack Brown got

a raise to $2.55 million per year.

The total cost of athletic scholarships at Texas, including those for

football and all other sports, male and female, came to $5.8 million.

On college campuses, athletes are the only students subject to aid

restrictions imposed by an agreement among universities. Talented

students in music, chemistry or any other area can be bid upon by

individual colleges, without limits on the total value of their

scholarship packages. Some, often graduate students, receive the full

cost of attendance plus cash payments.

Huma, though, said that the lawsuit does not ask that athletes be

treated in the manner of professional athletes with free-agent rights.

Instead, it asks for the restoration of funds for incidental expenses,

which the NCAA eliminated in 1973 in a cost-cutting move.

"We're not trying to open the floodgates," he said. "We're just trying

to raise the bar a little bit in terms of the limits of what athletes

are getting."

The courts have often deferred to the NCAA in matters in which the

association has argued that amateurism is at stake, although scholars

consider this the first antitrust action brought on behalf of athletes

challenging scholarship aid restrictions. Their lawyers are applying

arguments similar to those made in 1998, when the NCAA was found to

have colluded to set the salaries of assistant coaches. The NCAA was

hit with a $66.9 million judgment and ultimately settled the case for

$54.5 million.

The new lawsuit, White vs. NCAA, asks that damages be paid to athletes

in the graduating classes of 2002 through 2010, an amount that could

mean several thousand dollars or more to each person, depending in

part on how long they were on scholarship. Huma said the lawsuit also

ultimately could benefit athletes in sports beyond football and

basketball, as he suspects the NCAA, if it loses, would begin to

permit cost-of-attendance scholarships in other sports to avoid

formalizing distinctions between revenue- and non-revenue athletes.

Currently, athletes are permitted to receive Pell Grants that provide

money beyond the athletic grant-in-aid cap. They can also apply to an

NCAA special assistance fund for clothes and some incidentals. But

only the most indigent athletes have access to those funds, according

to Huma, who said he didn't qualify for either resource while at UCLA.

"Student-athletes are grateful for where they're at," Huma said. "But

given that football and basketball players are generating billions of

dollars, they should be able to afford basics like toilet paper, soap

and deodorant. Most of these athletes are from low-income backgrounds,

and it's a constant struggle."

Tom Farrey is a senior writer at ESPN the Magazine. He can be reached

at tom.farrey@....

[AUTrey 0]

Some of this may not make me any new friends...but I'm in a bad mood today, so I'll be a jerk anyway...

First, this is not about the NCAA, scholarships, and athletes. The main guy that started all this can't even file suit. He's not even a party. But we do have a class action with thousands of kids, 90% of whom probably don't even know they've been named to a lawsuit, so that a lawyer can rack up a bigger claim. Then he files an anti trust suit to get treble damages. If they won, and got what they wanted (which they won't get, but still), Auburn's football program would have to pay out every penny in revenue it got for the next two years, just to cover the lawyers' cut. Me thinks this is more about opportunistic sewer trout drooling over a paycheck.

It's not that I have any problems with the athletes getting some more $$$. I never knew they didn't get the full cost covered. I could even understand if they got a stipend to cover additional costs (actually, I was thought they did. Remember the TAMU player talking about how they kept your pockets full there? They said that was the per diem he was talking about.) But if this was about getting the additional costs covered, they would have filed a suit trying to force the NCAA to allow schools to cover the full costs, not file a $300+ Million class action anti trust suit.

On college campuses, athletes are the only students subject to aid

restrictions imposed by an agreement among universities. Talented

students in music, chemistry or any other area can be bid upon by

individual colleges, without limits on the total value of their

scholarship packages. Some, often graduate students, receive the full

cost of attendance plus cash payments.

Uh huh. This is a brilliant idea. If schools could bid on players, the richest schools would take everybody. It would be the Bear Bryant era all over again. That most profitable programs list that was in the article would also be the Top 10 list every year.

Huma said the lawsuit also ultimately could benefit athletes in sports beyond

football and

basketball, as he suspects the NCAA, if it loses, would begin to

permit cost-of-attendance scholarships in other sports to avoid

formalizing distinctions between revenue- and non-revenue athletes.

And he really turned the thinking cap on here. Cash strapped public schools, fighting for every penny they can get, are going to put off hiring professors so that they can pay out more scholarship money to athletes playing sports that are already losing the school money. Me-thinks it more likely you would never again here of a Tennis or Golf Scholarship.

And now for the part that will make everyone hate me...

No one is forcing anyone to play sports. They are still getting a sweetheart deal playing football and going to college, if not for free, for a substantially reduced price. I know it cost me a lot more than $2500 a year to go to school. They still have tuition and many other costs paid, and now that I read the article, I think they probably do have something of a stipend. Student loans exist for a reason, and many, many students have them. Huma's high interest credit card debt didn't come from buying toilet paper and paying for a phone line every month.

I'm not so niave as to think the Universities really have the kids best interests in mind, or that they're some saints that deserve to have people jumping to defend them. I just get tired of hearing people want hand outs. It's a business. The schools and NCAA make all the money because people are willing to pay the money to see the games, but if you say that since football players make so much cash for the school, they should get more money, then you would also have to say that Golfers, Tennis players, swimmers, soccer players, softball players, and most other scholarship sport athletes should have to pay the school tuition +, since they are costing the school money.

Wow...I'm sorry, after reading that, I even hate me. I'm going to get a drink and end this day.

[WeagleDMS 0]

This thing could ruin college football. AU doesn' t have the money to win bidding wars.

[tarheeltiger 0]

This thing could ruin college football.  AU doesn' t have the money to win bidding wars.

221732[/snapback]

NCAA's Most Profitable Football Programs (In Millions)

Revenue Profit

Texas $53.2 $38.7

Georgia $50.9 $38.3

Michigan $46.4 $35.7

Alabama $42.9 $28.9

LSU $39.7 $27.5

Florida $43.3 $27.1

Notre Dame $41.8 $26.7

Ohio State $51.8 $26.1

Texas A&M $37.3 $25.2

Auburn $40.6 $24.2

Source: U.S. Dept. of Education from 2004-05 academic year

[otterinbham 0]

Well, if you have a shred of objectivity, you have to wonder about the sheer amount of money being lobbed about here. And while I love college football--and Auburn football--as much as anybody, a profit of $24 million seems a bit obscene.

Think about it. Just to work with a nice round number, let's divide that profit up among 100 players. That way, even the scout team gets in on the action. That's 100,000 per player. Seriously.

Which leads me to ask the question...what are colleges doing in the professional sports biz? Because that money isn't going back to the college. Especially when most college football programs LOSE money.

[WeagleDMS 0]

This thing could ruin college football.  AU doesn' t have the money to win bidding wars.

221732[/snapback]

NCAA's Most Profitable Football Programs (In Millions)

Revenue Profit

Texas $53.2 $38.7

Georgia $50.9 $38.3

Michigan $46.4 $35.7

Alabama $42.9 $28.9

LSU $39.7 $27.5

Florida $43.3 $27.1

Notre Dame $41.8 $26.7

Ohio State $51.8 $26.1

Texas A&M $37.3 $25.2

Auburn $40.6 $24.2

Source: U.S. Dept. of Education from 2004-05 academic year

221735[/snapback]

Didn't read that til just now. However, it still wouldn't be good for the game.

[AUTrey 0]

Well, if  you have a shred of objectivity, you have to wonder about the sheer amount of money being lobbed about here. And while I love college football--and Auburn football--as much as anybody, a profit of $24 million seems a bit obscene.

Think about it. Just to work with a nice round number, let's divide that profit up among 100 players. That way, even the scout team gets in on the action. That's 100,000 per player. Seriously.

Which leads me to ask the question...what are colleges doing in the professional sports biz? Because that money isn't going back to the college. Especially when most college football programs LOSE money.

221741[/snapback]

I don't know exactly, some of the others on here could probably give you a better answer, but you do have to remember that at many schools football is about the only sport that makes a very substantial profit. I think anyway. It has to pay for the non revenue sports.

[aumoore 0]

Well, if  you have a shred of objectivity, you have to wonder about the sheer amount of money being lobbed about here. And while I love college football--and Auburn football--as much as anybody, a profit of $24 million seems a bit obscene.

Think about it. Just to work with a nice round number, let's divide that profit up among 100 players. That way, even the scout team gets in on the action. That's 100,000 per player. Seriously.

Which leads me to ask the question...what are colleges doing in the professional sports biz? Because that money isn't going back to the college. Especially when most college football programs LOSE money.

221741[/snapback]

Otteringham

I hope you are not an accountant? $24Million divided by 100=$100K try $240K

Also if most College football programs lose money why are so many colleges moving up to Division 1. To make money. I bet the top 100 college football teams make at least a small profit. The fact is without Football and Basketball generating revenues there would not be much $ for other non revenue generating sports.

[tgr4lfe 220]

I always thought athletes got full rides...but apparently, if I am reading this right, they still have to come up with $2,500 per year?? Plus their living expenses. I have always been a proponent of some additional help for student athletes, but not at the cost of bringing down anything. I know the AU football program basically funds every aspect of AU athletics. I mean how much are tickets to the volleyball games, gymnastics, etc. College football has become the major cash flow for most of colleges atheltics, except for basketball heavy schools, i.e. UK and Duke, just flip b-ball and football.