WEBVTT
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So Franz is out right now. Halfway across the world
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right now. I was talking with Winston the Queer. We
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were talking off air about, I just hit him up
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with this. The last time he was on, we got
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to talking about NIL once the segment was over. And
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he's got a decent background in that. So I was like,
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let's do a deep dive. Step away from today's headlines.
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Step away from, you know, people coming out of a
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semi-coma for a minute. botched death, but let's step away
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from all that and talk about things that have been
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going on at LSU, throughout Louisiana, throughout college sports when
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it comes to the ever-changing world of NIL. Where are
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we right now? Where can we be? Where are we headed?
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Where should we be headed? Winston Dequeer is here. How
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are you, sir?
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Doing well. Doing well. It's a little early for me.
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I'm normally not up this early.
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So I appreciate it. I do appreciate it greatly. I'm
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not going to say you get used to it, but
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you do really, really depend on coffee. Yes. It happens.
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And I am a coffee addict.
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Good. Good. Well, then you're going to fit right in.
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By the next segment, you're going to be ripping and roaring.
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We'll get a second cup down you too. I want
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to start off. So the segment breaks down into three segments.
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We got about three and a half minutes here. I
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want to start off with your bio, like how you
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got involved with your level of knowledge and expertise on this.
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Give us the background.
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So it's really interesting. I started in 2020 as LSU's
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general counsel. And at that time, all of the rules
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in college sports were basically the rules we had grown
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up with and hadn't changed significantly in 60 years. And
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then in 2021, we're trying to come out of COVID
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and And the Supreme Court issues a 9-0 decision saying
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the NCAA operates a monopoly in violation of the antitrust laws.
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And just like that, all of the rules were turned
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on their head. So the SEC came together and said,
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we have to figure out how to solve this. But
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at the same time, you had plaintiff's lawyers suing the
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NCAA and the conferences claiming all these athletes you denied
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compensation deserve back pay. So The schools are looking at
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this $ 10 billion potential claim. They're trying to figure out
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how to basically reconcile what the Supreme Court said with
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a market that doesn't work. And you almost had to
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completely rebuild the business model of college athletics programs in
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2021 to get to where you are today.
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Let's start with antitrust laws. I don't want to take
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it way too far down the line as far as
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oversimplifying it, but when it comes to what is a
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monopoly and how does the antitrust laws protect from a monopoly?
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Yeah. So basically, if you have either one buyer or
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one seller, that's what antitrust laws are designed to prevent.
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And what the court said is, the only buyer of
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college athletes is NCAA-covered schools. So when the NCAA set
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a restriction saying college athletes can't be paid, you had
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no place to go be a college athlete but an
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NCAA school. They were effectively operating a monopoly. They said,
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you know, if you want to play in our leagues,
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you can't be paid.
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Why didn't the NCAA, from Jump... try to adopt what
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got the NFL through antitrust. Because, I mean, this is
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how we got the New Orleans Saints in the first place,
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by the way. This was Earl Long and Hale Boggs.
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The NFL was able to merge with the AFL and
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avoid violating antitrust because of Louisiana legislators.
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So there's a couple issues. the NCAA and its member
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institutions have been very reluctant to treat college athletes like employees.
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In fact, one of the things.
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That's the employees part we're going to get to, that's
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a big one.
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And what makes the pro model work is collective bargaining
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between employees and owners puts people on the same playing field.
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The NCAA has been reluctant to go into collective bargaining
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by declaring student athletes employees. So, so it, They were
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pushed to allow some compensation early, but that just wasn't
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their model. It was trying to get a very old
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guard institution to come into modern times, and it just
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wasn't working.
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Winston DeQueer's in with us. We're doing Legally Served. You
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sit in for Franz Borchardt today. We're taking a deep
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dive into NIL and the legalities of it and where
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we could be headed, where we should be headed. Legally
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Served is part of Mornings with Brian Haldane. Franz Borchardt's
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halfway around the world. We got Winston DeQueer in here
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talking about NIL and college sports law. How things have
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just completely turned over in the last six years and
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where they're headed. Winston, when we broke to go to news,
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he ended up saying, when we come back, we're going
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to walk through the individual timeline. Because there's some individual
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cases that have kind of set framework up, but I
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don't know if it's like piece one meets piece two
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meets piece three. So walk us through a little bit
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about this all started when the O'Banion brothers were on
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the cover of a Nintendo game.
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Yes, yes, yes. It was EA Sports, Ed O'Banion versus NCAA.
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Ed O'Banion, folks may remember, won the NCAA Final Four
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on a last-second shot for UCLA. Yes, and he never
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really made it in the pros, but he turned around
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and saw his image on the cover of an EA
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Sports game, and he didn't get a nickel from it.
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Right.
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And he sued, and that was the first of the
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major antitrust cases. He won that suit in principle but
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didn't get any money because the court ruled there was
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no market for student athletes, so he had no lost income.
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Yes. Crazy.
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So in 2021, there was another case very similar in
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front of the same judge named Alston v. NCAA. That
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one goes all the way to the Supreme Court, and
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you follow the Supreme Court. The Supreme Court issued a
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9-0 decision. I mean, it's rare to see a 9-0
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decision saying the NCAA operated an antitrust violation, a monopoly,
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and student athletes should be paid. And because of that,
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the subsequent case was the House case. So the Alston
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case said student athletes should be allowed to be paid.
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The House case said this is our case where we
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want the damages for them not being paid. Right. And
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that's the one the NCAA settled on. for about $ 3 billion.
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Which is a ridiculous number until you start breaking down
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how many people are involved in that $ 3 billion.
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Yes, there's thousands and thousands of folks, but some are
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going to receive checks between $ 50 and $ 80 grand in
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back compensation. So now where we are is following the
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House settlement, one, there was a back pay compensation fund,
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and the other component of the settlement set up the
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rules we use now. And that's a 10-year deal where
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schools are allowed to share up to 22% of their
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gross athletic revenues with student athletes. Okay.
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Hang on. This is rev share. Yes. This is separate from,
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this is not when EA sports comes to town and says,
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we want to put you on a video game.
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No.
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And that, and that's where this has gotten a little
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bit wonky is because the EA sports thing is the
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true definition of name, image, likeness. It's two of the
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three it's image and likeness. I mean, it, nobody knew
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his name, but it was image and likeness to be sure.
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So NIL and RevShare, keeping those two things separate is
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important to move the conversation forward.
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So to break it down for the listeners, if you
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think about it, there's three different buckets a college athlete
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can be paid from. One, they could be paid a
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salary to play, but that's still prohibited.
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Right. Two, they get a share of.
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The revenue that the schools generate. That's RevShare. And then three...
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They're allowed to go on the private market and basically
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sell their own sponsorships, and that's NIL.
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Right. And this is, just as an aside, this is
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where LSU is crushing it with the brand. Yes. I mean,
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they're doing a truly remarkable job of being out in
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front to put, to where your starting quarterback isn't necessarily
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doing paid appearances for a local snowball stand, but instead
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is doing international ads for PowerA.
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Yes, because the rev share portion is capped. So the
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schools are limited to a total of 22 million, but
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the NIL portion is uncapped.
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Okay. Can we do a little bit further breakdown on
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the rev share portion real quick? Yes. Because that's going
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to walk us up to the who's an employee part
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of this. When it comes to rev share, you're looking
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at the entire athletic department. Yes. And it's broken down
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to where football gets, what, 75% of the whole pot? Yes.
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I think it's about 17, 18 million.
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Okay.
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22.
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So percentage-wise, football gets, let's say, over 70%. Men's basketball
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gets a chunk. Women's basketball gets a chunk. Baseballs get
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a chunk. And then all the other sports get what's
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left over, which is not nothing. It's not nothing, but
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it's significantly different. Now within football, is that broken down
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the same as the depth chart is broken down? Like
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the rev share within football, are Sam Levitt and Hassan
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Longstreet making the same?
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No. Those numbers are kept confidential.
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Yes, they are. But how can we know that it's
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different from pay for play? Because the more you play,
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the more you're making.
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So technically, the rev share contracts have an obligation on
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the student athlete that's unrelated to performance on the field.
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So they, and I've looked at a bunch of them.
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Should you be air quoting that?
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It's pretty simple because they're standardized to some extent across schools.
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Student athletes are required to make appearances on behalf of
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the school for fundraising. Some of them are required to do,
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make appearances for nonprofit activities. So for example, when When
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kids come in for orientation in the fall, if you
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see a handful of student athletes, you know, glad-handing, a
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lot of times that's part of their NIL obligations. So
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they tie those obligations to non-athletic performance. And what you're
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really doing is that RevShare is buying a non-exclusive license
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to use that student athlete's appearance to support the school.
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Okay. Now, this is going to be hyper-specific, okay? But
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when the football team goes over to FML Health, the
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Our Lady Lake Children's Hospital. Yes. Does that count as
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RevShare or does that count as NIL? Because FML Health
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has a number of NIL guys.
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Yes. It could depend on how the contract is set up.
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For some of them, it could be a RevShare obligation.
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For some, If they've hit the rev share cap for others,
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it could be a separate NIL obligation.
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Okay.
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Because what's happening is the schools have only so much
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money under the cap, and then if they need additional money,
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they have to find companies in the free market that
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will basically pay NIL separately for those sponsorships.
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We're talking with Winston Dequeer about NIL and a little
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bit about RevShare as well and kind of where college sports,
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where the law within college sports is headed. So we've
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got two minutes until break. Sure. Let's save the who's
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an employee part because we're going to have seven minutes
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on the back of the break. That's a good teaser.
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I want you to have room to run with it.
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So we'll talk about who is an employee and what
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employment air quote looks like. Before we get to that break,
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though– When it comes to the level of school, obviously
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your Power 4 conferences, your SEC, your Big 10, your ACC,
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your Big 12, they're going to have– the largest amount
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to have within RevShare. This is detrimental to, and you've
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also worked, you work with the UL schools as well. Yes,
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UL schools and Southern. We got three schools in the
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fund belt right there. How does this affect them to maintain,
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not only maintain their programs, but to maintain their rosters within,
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because there's constantly going to be, you know, bigger fish
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dangling in front of them.
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Well, their business models are even harder to maintain. fashion
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because they don't have the resources of an LSU. What
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happens is on those rosters, you might have a small
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handful of players that get rev share above their, you know,
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student aid and scholarship, but you won't have an entire
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team receive something. They just don't have the money to
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do that. So some of those schools may have a
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rev share budget between one and three million. Some may
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only allocate maybe half a million. You don't have to
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allocate the whole portion. You can allocate up to 22 million.
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but it can be between zero and 22 million. So
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what you find is a lot of those schools will decide, hey,
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we have one or two key players we might have
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to pay a little money for, but the rest of
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our roster is generally on a scholarship grant and aid.
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Winston DeQueer is in with us for about seven and
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a half more minutes. This is where I want to
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get to the sticky part, Winston, is if you've got RevShare.
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I understand NIL is a separate thing. But when it
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comes to RevShare, how are athletes not employees?
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So the RevShare contracts generally buy a non-exclusive license to
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use the student athlete's name, image, and likeness for the
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benefit of the school. So they very carefully draft these contracts.
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They're not being paid to perform on the field. Their
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specific obligation is showing up for fundraising events, showing up
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for school support events. Some schools have them show up
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to support nonprofits. So you're really treating it like an
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NIL deal. The compensation is just coming from athletics revenues.
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But they have a contract with dates that are scheduled
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and deliverables within. Yes. Even if they're not employees in
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terms of playing football, isn't your job. Public appearances are
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your job. That's still, quote unquote, your job.
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Yes. But they're treating them like independent contractors, just like
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you would hire a celebrity to support guaranteed broadcasting.
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Right.
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That's how they're treating it now. Going forward, the current
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case the schools are following is Johnson versus NCAA, where
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the court is actually considering, you know, given the obligations
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on student athletes, should they be considered employees? And you
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have a lot of schools nervous, which is why Congress
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is considering the SCORE Act, because Congress is looking at
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possibly stepping in and solving this legislatively before the courts
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solve this issue over employment.
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I'm going to interrupt you again because you said Congress
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is looking to step in and solve, and you once
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again forgot air quotes. Because when Congress steps in to solve,
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you need air quotes. We'll get to that part in
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just a quick second. What's your personal take? Are they employees? Oh,
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that's a good question.
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I don't want to venture an opinion on it, but
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if you read the Johnson case carefully, it's pretty clear
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all student athletes aren't going to be treated the same.
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What the Johnson court says is you have to look
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at how important this function is for the school. Sponsoring,
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you know, a golf team doesn't really benefit the school
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the same way sponsoring an SEC football team does.
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Right.
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One of those the school does for its own benefit.
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The other one the school does for the student athletes benefit.
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And so the future seems to indicate that. Some sports
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may be employees. Some sports may not be employees.
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So my personal take is they're not employees because an
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academic scholarship and an athletic scholarship are both scholarships. So
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if an athletic scholarship athlete, if a scholarship athlete is
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an employee, why isn't the kid that gets a 36
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on his ACT and a 4.0 in high school, he's
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on an academic scholarship. That's the exact same level of
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contract that you have to come under. I mean, there's
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more details on the athletic side, but they're both contractually
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obligated to perform at a level at the university, one
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in the classroom, one on the field.
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The biggest difference would be the level of control involved.
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over the student who's going to school on an academic scholarship,
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he's basically told you need to get good grades. The
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student athlete in some sports is told what to eat,
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what time to show up, where he has to go
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every minute of the day. And when you look at
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that writer control test, and you know the test I'm
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talking about, you know, when you look at that, the
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school controls the student a lot less than they control
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the student athlete.
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See, while I'm of the belief that they're not, I
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just know that the argument's going to get lost. Eventually
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it will get lost. It's a good argument.
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It was a stronger argument before they received the extra
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compensation on top of the scholarship. I think that's where
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all of this fell apart.
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Is there room to create a world where rev share
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is minimized and NIL is maximized, but NIL is maximized
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in a pure form, not in a pay-for-play form?
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That would be hard because most student athletes don't come
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to a university with real marketing skills. They don't have
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agents like professional athletes. They're getting there. They're getting there.
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But your average run-of-the-mill student athlete is coming to college
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at 18, 19 years old, not business savvy. The schools
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would have to help them do that.
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I'm going to ask the easiest question right now. Under
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its current form, is it sustainable?
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I don't think it is. I don't think it is
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because the current form basically is an unsalary capped environment.
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Right. With no length of contract either. Yes. Every year
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you're a free agent.
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Yes. And the schools are griping that with no caps.
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You have this kind of NIL pool with no cap.
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You're going to lose parity. And when you lose parity,
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you lose the... you lose really the core of the
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product and then viewership falls off.
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Yeah. And when viewership falls off, ad revenue falls off,
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TV revenue bottoms out. All right. We got a little
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over a minute and a half left. How quickly can
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you encapsulate the SCORE Act?
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So what the SCORE Act is trying to do is
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basically create a semi-regulated market. Students would have access to
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outside NIL, but they would regulate the market within the schools.
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The And they would provide, the big thing is they
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would provide the NCAA and the conferences with an antitrust exemption.
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So they could set salary caps and transfer rules and
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not have to worry about those transfer rules and salary
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caps being overruled by the courts. They would have a
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legislative exemption to the antitrust issues that created the current framework.
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The downside is, when I say downside, the detractors are saying,
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It would also prevent student athletes from forming collective bargaining
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agreements because you'd legislatively say they're not employees.
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What a collective bargaining agreement would that world make at
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college athletics collapse?
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I don't think so, because when you look at the
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NFL and you look at. Basketball and baseball, they've had
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significant periods of labor peace once the owners and the
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players started operating on parity.
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This is so much bigger, so many more teams. The
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NFL has 32 teams. It is.
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It is. I don't think you would have collective bargaining
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below the top four conferences. I think you'd really be
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looking at football in the top four conferences and basketball
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in maybe five or six conferences.
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As a lawyer, you've got to cover a million different things.
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We've got 30 seconds left. You've got to cover a
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million different things. How were you able to take such
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a deep dive into this one?
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Well, early, early in my career, I actually practiced in
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the space of the National Labor Relations Act.
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OK.
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And so I learned unions back with the SEIU, the
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International Brotherhood of Electrical Workers. I learned old school union work.
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And it's funny. It came back around 28 years later.
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Unbelievable stuff. Thank you so much for pinch hitting for Franz. Oh,
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no problem. Great segment. He's Winston Dequeer.
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So Franz is out right now. Halfway across the world
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right now. I was talking with Winston the Queer. We
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were talking off air about, I just hit him up
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with this. The last time he was on, we got
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to talking about NIL once the segment was over. And
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he's got a decent background in that. So I was like,
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let's do a deep dive. Step away from today's headlines.
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Step away from, you know, people coming out of a
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semi-coma for a minute. botched death, but let's step away
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from all that and talk about things that have been
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going on at LSU, throughout Louisiana, throughout college sports when
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it comes to the ever-changing world of NIL. Where are
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we right now? Where can we be? Where are we headed?
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Where should we be headed? Winston Dequeer is here. How
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are you, sir?
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Doing well. Doing well. It's a little early for me.
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I'm normally not up this early.
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So I appreciate it. I do appreciate it greatly. I'm
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not going to say you get used to it, but
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you do really, really depend on coffee. Yes. It happens.
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And I am a coffee addict.
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Good. Good. Well, then you're going to fit right in.
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By the next segment, you're going to be ripping and roaring.
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We'll get a second cup down you too. I want
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to start off. So the segment breaks down into three segments.
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We got about three and a half minutes here. I
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want to start off with your bio, like how you
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got involved with your level of knowledge and expertise on this.
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Give us the background.
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So it's really interesting. I started in 2020 as LSU's
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general counsel. And at that time, all of the rules
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in college sports were basically the rules we had grown
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up with and hadn't changed significantly in 60 years. And
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then in 2021, we're trying to come out of COVID
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and And the Supreme Court issues a 9-0 decision saying
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the NCAA operates a monopoly in violation of the antitrust laws.
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And just like that, all of the rules were turned
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on their head. So the SEC came together and said,
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we have to figure out how to solve this. But
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at the same time, you had plaintiff's lawyers suing the
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NCAA and the conferences claiming all these athletes you denied
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compensation deserve back pay. So The schools are looking at
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this $ 10 billion potential claim. They're trying to figure out
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how to basically reconcile what the Supreme Court said with
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a market that doesn't work. And you almost had to
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completely rebuild the business model of college athletics programs in
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2021 to get to where you are today.
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Let's start with antitrust laws. I don't want to take
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it way too far down the line as far as
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oversimplifying it, but when it comes to what is a
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monopoly and how does the antitrust laws protect from a monopoly?
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Yeah. So basically, if you have either one buyer or
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one seller, that's what antitrust laws are designed to prevent.
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And what the court said is, the only buyer of
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college athletes is NCAA-covered schools. So when the NCAA set
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a restriction saying college athletes can't be paid, you had
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no place to go be a college athlete but an
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NCAA school. They were effectively operating a monopoly. They said,
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you know, if you want to play in our leagues,
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you can't be paid.
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Why didn't the NCAA, from Jump... try to adopt what
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got the NFL through antitrust. Because, I mean, this is
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how we got the New Orleans Saints in the first place,
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by the way. This was Earl Long and Hale Boggs.
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The NFL was able to merge with the AFL and
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avoid violating antitrust because of Louisiana legislators.
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So there's a couple issues. the NCAA and its member
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institutions have been very reluctant to treat college athletes like employees.
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In fact, one of the things.
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That's the employees part we're going to get to, that's
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a big one.
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And what makes the pro model work is collective bargaining
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between employees and owners puts people on the same playing field.
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The NCAA has been reluctant to go into collective bargaining
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by declaring student athletes employees. So, so it, They were
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pushed to allow some compensation early, but that just wasn't
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their model. It was trying to get a very old
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guard institution to come into modern times, and it just
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wasn't working.
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Winston DeQueer's in with us. We're doing Legally Served. You
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sit in for Franz Borchardt today. We're taking a deep
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dive into NIL and the legalities of it and where
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we could be headed, where we should be headed. Legally
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Served is part of Mornings with Brian Haldane. Franz Borchardt's
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halfway around the world. We got Winston DeQueer in here
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talking about NIL and college sports law. How things have
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just completely turned over in the last six years and
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where they're headed. Winston, when we broke to go to news,
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he ended up saying, when we come back, we're going
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to walk through the individual timeline. Because there's some individual
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cases that have kind of set framework up, but I
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don't know if it's like piece one meets piece two
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meets piece three. So walk us through a little bit
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about this all started when the O'Banion brothers were on
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the cover of a Nintendo game.
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Yes, yes, yes. It was EA Sports, Ed O'Banion versus NCAA.
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Ed O'Banion, folks may remember, won the NCAA Final Four
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on a last-second shot for UCLA. Yes, and he never
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really made it in the pros, but he turned around
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and saw his image on the cover of an EA
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Sports game, and he didn't get a nickel from it.
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Right.
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And he sued, and that was the first of the
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major antitrust cases. He won that suit in principle but
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didn't get any money because the court ruled there was
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no market for student athletes, so he had no lost income.
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Yes. Crazy.
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So in 2021, there was another case very similar in
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front of the same judge named Alston v. NCAA. That
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one goes all the way to the Supreme Court, and
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you follow the Supreme Court. The Supreme Court issued a
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9-0 decision. I mean, it's rare to see a 9-0
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decision saying the NCAA operated an antitrust violation, a monopoly,
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and student athletes should be paid. And because of that,
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the subsequent case was the House case. So the Alston
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case said student athletes should be allowed to be paid.
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The House case said this is our case where we
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want the damages for them not being paid. Right. And
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that's the one the NCAA settled on. for about $ 3 billion.
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Which is a ridiculous number until you start breaking down
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how many people are involved in that $ 3 billion.
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Yes, there's thousands and thousands of folks, but some are
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going to receive checks between $ 50 and $ 80 grand in
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back compensation. So now where we are is following the
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House settlement, one, there was a back pay compensation fund,
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and the other component of the settlement set up the
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rules we use now. And that's a 10-year deal where
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schools are allowed to share up to 22% of their
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gross athletic revenues with student athletes. Okay.
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Hang on. This is rev share. Yes. This is separate from,
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this is not when EA sports comes to town and says,
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we want to put you on a video game.
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No.
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And that, and that's where this has gotten a little
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bit wonky is because the EA sports thing is the
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true definition of name, image, likeness. It's two of the
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three it's image and likeness. I mean, it, nobody knew
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his name, but it was image and likeness to be sure.
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So NIL and RevShare, keeping those two things separate is
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important to move the conversation forward.
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So to break it down for the listeners, if you
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think about it, there's three different buckets a college athlete
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can be paid from. One, they could be paid a
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salary to play, but that's still prohibited.
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Right. Two, they get a share of.
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The revenue that the schools generate. That's RevShare. And then three...
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They're allowed to go on the private market and basically
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sell their own sponsorships, and that's NIL.
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Right. And this is, just as an aside, this is
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where LSU is crushing it with the brand. Yes. I mean,
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they're doing a truly remarkable job of being out in
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front to put, to where your starting quarterback isn't necessarily
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doing paid appearances for a local snowball stand, but instead
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is doing international ads for PowerA.
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Yes, because the rev share portion is capped. So the
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schools are limited to a total of 22 million, but
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the NIL portion is uncapped.
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Okay. Can we do a little bit further breakdown on
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the rev share portion real quick? Yes. Because that's going
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to walk us up to the who's an employee part
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of this. When it comes to rev share, you're looking
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at the entire athletic department. Yes. And it's broken down
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to where football gets, what, 75% of the whole pot? Yes.
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I think it's about 17, 18 million.
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Okay.
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22.
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So percentage-wise, football gets, let's say, over 70%. Men's basketball
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gets a chunk. Women's basketball gets a chunk. Baseballs get
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a chunk. And then all the other sports get what's
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left over, which is not nothing. It's not nothing, but
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it's significantly different. Now within football, is that broken down
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the same as the depth chart is broken down? Like
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the rev share within football, are Sam Levitt and Hassan
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Longstreet making the same?
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No. Those numbers are kept confidential.
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Yes, they are. But how can we know that it's
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different from pay for play? Because the more you play,
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the more you're making.
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So technically, the rev share contracts have an obligation on
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the student athlete that's unrelated to performance on the field.
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So they, and I've looked at a bunch of them.
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Should you be air quoting that?
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It's pretty simple because they're standardized to some extent across schools.
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Student athletes are required to make appearances on behalf of
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the school for fundraising. Some of them are required to do,
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make appearances for nonprofit activities. So for example, when When
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kids come in for orientation in the fall, if you
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see a handful of student athletes, you know, glad-handing, a
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lot of times that's part of their NIL obligations. So
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they tie those obligations to non-athletic performance. And what you're
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really doing is that RevShare is buying a non-exclusive license
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to use that student athlete's appearance to support the school.
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Okay. Now, this is going to be hyper-specific, okay? But
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when the football team goes over to FML Health, the
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Our Lady Lake Children's Hospital. Yes. Does that count as
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RevShare or does that count as NIL? Because FML Health
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has a number of NIL guys.
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Yes. It could depend on how the contract is set up.
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For some of them, it could be a RevShare obligation.
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For some, If they've hit the rev share cap for others,
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it could be a separate NIL obligation.
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Okay.
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Because what's happening is the schools have only so much
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money under the cap, and then if they need additional money,
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they have to find companies in the free market that
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will basically pay NIL separately for those sponsorships.
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We're talking with Winston Dequeer about NIL and a little
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bit about RevShare as well and kind of where college sports,
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where the law within college sports is headed. So we've
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got two minutes until break. Sure. Let's save the who's
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an employee part because we're going to have seven minutes
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on the back of the break. That's a good teaser.
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I want you to have room to run with it.
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So we'll talk about who is an employee and what
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employment air quote looks like. Before we get to that break,
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though– When it comes to the level of school, obviously
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your Power 4 conferences, your SEC, your Big 10, your ACC,
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your Big 12, they're going to have– the largest amount
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to have within RevShare. This is detrimental to, and you've
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also worked, you work with the UL schools as well. Yes,
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UL schools and Southern. We got three schools in the
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fund belt right there. How does this affect them to maintain,
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not only maintain their programs, but to maintain their rosters within,
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because there's constantly going to be, you know, bigger fish
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dangling in front of them.
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Well, their business models are even harder to maintain. fashion
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because they don't have the resources of an LSU. What
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happens is on those rosters, you might have a small
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handful of players that get rev share above their, you know,
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student aid and scholarship, but you won't have an entire
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team receive something. They just don't have the money to
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do that. So some of those schools may have a
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rev share budget between one and three million. Some may
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only allocate maybe half a million. You don't have to
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allocate the whole portion. You can allocate up to 22 million.
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but it can be between zero and 22 million. So
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what you find is a lot of those schools will decide, hey,
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we have one or two key players we might have
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to pay a little money for, but the rest of
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our roster is generally on a scholarship grant and aid.
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Winston DeQueer is in with us for about seven and
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a half more minutes. This is where I want to
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get to the sticky part, Winston, is if you've got RevShare.
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I understand NIL is a separate thing. But when it
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comes to RevShare, how are athletes not employees?
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So the RevShare contracts generally buy a non-exclusive license to
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use the student athlete's name, image, and likeness for the
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benefit of the school. So they very carefully draft these contracts.
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They're not being paid to perform on the field. Their
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specific obligation is showing up for fundraising events, showing up
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for school support events. Some schools have them show up
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to support nonprofits. So you're really treating it like an
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NIL deal. The compensation is just coming from athletics revenues.
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But they have a contract with dates that are scheduled
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and deliverables within. Yes. Even if they're not employees in
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terms of playing football, isn't your job. Public appearances are
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your job. That's still, quote unquote, your job.
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Yes. But they're treating them like independent contractors, just like
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you would hire a celebrity to support guaranteed broadcasting.
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Right.
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That's how they're treating it now. Going forward, the current
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case the schools are following is Johnson versus NCAA, where
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the court is actually considering, you know, given the obligations
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on student athletes, should they be considered employees? And you
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have a lot of schools nervous, which is why Congress
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is considering the SCORE Act, because Congress is looking at
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possibly stepping in and solving this legislatively before the courts
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solve this issue over employment.
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I'm going to interrupt you again because you said Congress
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is looking to step in and solve, and you once
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again forgot air quotes. Because when Congress steps in to solve,
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you need air quotes. We'll get to that part in
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just a quick second. What's your personal take? Are they employees? Oh,
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that's a good question.
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I don't want to venture an opinion on it, but
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if you read the Johnson case carefully, it's pretty clear
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all student athletes aren't going to be treated the same.
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What the Johnson court says is you have to look
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at how important this function is for the school. Sponsoring,
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you know, a golf team doesn't really benefit the school
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the same way sponsoring an SEC football team does.
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Right.
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One of those the school does for its own benefit.
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The other one the school does for the student athletes benefit.
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And so the future seems to indicate that. Some sports
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may be employees. Some sports may not be employees.
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So my personal take is they're not employees because an
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academic scholarship and an athletic scholarship are both scholarships. So
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if an athletic scholarship athlete, if a scholarship athlete is
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an employee, why isn't the kid that gets a 36
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on his ACT and a 4.0 in high school, he's
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on an academic scholarship. That's the exact same level of
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contract that you have to come under. I mean, there's
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more details on the athletic side, but they're both contractually
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obligated to perform at a level at the university, one
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in the classroom, one on the field.
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The biggest difference would be the level of control involved.
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over the student who's going to school on an academic scholarship,
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he's basically told you need to get good grades. The
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student athlete in some sports is told what to eat,
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what time to show up, where he has to go
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every minute of the day. And when you look at
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that writer control test, and you know the test I'm
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talking about, you know, when you look at that, the
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school controls the student a lot less than they control
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the student athlete.
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See, while I'm of the belief that they're not, I
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just know that the argument's going to get lost. Eventually
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it will get lost. It's a good argument.
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It was a stronger argument before they received the extra
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compensation on top of the scholarship. I think that's where
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all of this fell apart.
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Is there room to create a world where rev share
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is minimized and NIL is maximized, but NIL is maximized
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in a pure form, not in a pay-for-play form?
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That would be hard because most student athletes don't come
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to a university with real marketing skills. They don't have
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agents like professional athletes. They're getting there. They're getting there.
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But your average run-of-the-mill student athlete is coming to college
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at 18, 19 years old, not business savvy. The schools
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would have to help them do that.
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I'm going to ask the easiest question right now. Under
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its current form, is it sustainable?
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I don't think it is. I don't think it is
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because the current form basically is an unsalary capped environment.
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Right. With no length of contract either. Yes. Every year
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you're a free agent.
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Yes. And the schools are griping that with no caps.
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You have this kind of NIL pool with no cap.
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You're going to lose parity. And when you lose parity,
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you lose the... you lose really the core of the
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product and then viewership falls off.
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Yeah. And when viewership falls off, ad revenue falls off,
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TV revenue bottoms out. All right. We got a little
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over a minute and a half left. How quickly can
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you encapsulate the SCORE Act?
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So what the SCORE Act is trying to do is
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basically create a semi-regulated market. Students would have access to
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outside NIL, but they would regulate the market within the schools.
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The And they would provide, the big thing is they
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would provide the NCAA and the conferences with an antitrust exemption.
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So they could set salary caps and transfer rules and
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not have to worry about those transfer rules and salary
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caps being overruled by the courts. They would have a
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legislative exemption to the antitrust issues that created the current framework.
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The downside is, when I say downside, the detractors are saying,
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It would also prevent student athletes from forming collective bargaining
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agreements because you'd legislatively say they're not employees.
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What a collective bargaining agreement would that world make at
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college athletics collapse?
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I don't think so, because when you look at the
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NFL and you look at. Basketball and baseball, they've had
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significant periods of labor peace once the owners and the
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players started operating on parity.
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This is so much bigger, so many more teams. The
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NFL has 32 teams. It is.
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It is. I don't think you would have collective bargaining
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below the top four conferences. I think you'd really be
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looking at football in the top four conferences and basketball
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in maybe five or six conferences.
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As a lawyer, you've got to cover a million different things.
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We've got 30 seconds left. You've got to cover a
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million different things. How were you able to take such
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a deep dive into this one?
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Well, early, early in my career, I actually practiced in
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the space of the National Labor Relations Act.
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OK.
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And so I learned unions back with the SEIU, the
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International Brotherhood of Electrical Workers. I learned old school union work.
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And it's funny. It came back around 28 years later.
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Unbelievable stuff. Thank you so much for pinch hitting for Franz. Oh,
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no problem. Great segment. He's Winston Dequeer.
