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S1E7 - Joe Moglia - Now It's Legal with Jim Cavale
151 Plays7 months ago
Joe Moglia is the former Chairman/CEO of TD Ameritrade, former Head Football Coach at Coastal Carolina University, and is the current Executive Advisor to the President of Coastal Carolina University. He has written two books: The Perimeter Attack Offense and Coach Yourself to Success: Winning the Investment Game. According to Forbes, Joe has one of the most "unique resumes in modern business."
Joe joins Now It's Legal to discuss the current state of College Athletics. Today Jim covers the topics in Joe's recent op ed featured in The Indy Star.
https://www.indystar.com/story/opinion/columnists/2024/06/05/indianapolis-ncaa-settlement-nil-college-sports/73971123007/
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About Now It's Legal
In July 2021, NIL forever changed the trajectory of college athletics. It’s been a long time coming as the NCAA has long needed changes like NIL, the transfer portal, revenue sharing and other benefits for college athletes. We introduce to you the Now It’s Legal podcast. Join us as we discuss the industry that holds the hearts of millions of fans who want to understand where its trajectory is heading. We are talking to those who are invested in and affected by NIL including: Former and current college athletes, presidents and head coaches, broadcasters and media personalities, investors and more. This is just the beginning of NIL and what it means for the future of college athletics.
Host Jim Cavale is a former college athlete and entrepreneur who has become an advocate for young athletes across the country. In 2017, he created the INFLCR app that allowed athletes to build their brand on social media, and in 2021, evolved into the NIL management technology for more than 100,000 athletes across 200 college athletic programs. INFLCR has since been acquired by sports tech titan, Teamworks.
In 2023, Jim founded Athletes.org which which is the players association for college athletes to negotiate the best terms for their college athletics experience. AO provides its member athletes with a free membership, empowering them with a voice, on demand support, and group licensing income in the same ways that professional league associations do for their member athletes.
Tune in to a new episode every Monday and join in on the conversation on Instagram with @nowitslegalpod and @jimcavale.
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Transcript
Introduction to 'Now It's Legal' and Joe Moglia
00:00:05
Speaker
Welcome to another episode of Now It's Legal, the podcast where we talk about college athletics past, present, and future. And we really focus on that future. And today we do that big time with our guest, Joe Moglia.
Joe Moglia's Career Journey
00:00:19
Speaker
Joe is a guy who has lived many lives and won his story of going to Fordham. being a two sport athlete. This guy is in 10 different hall of fame's for his athletic career um is unbelievable. But how it set the stage for him to become the CEO of TD Ameritrade where he had a wonderful career and grew shareholder valued at record numbers.
Transforming Coastal Carolina Football
00:00:44
Speaker
He then goes back into college athletics and becomes a head coach for Coastal Carolina, a program that he really brought into the forefront of FBS as a smaller program group of five, going undefeated and playing really and in a top 10 level in college football. And since retiring as the football coach at Coastal Carolina, Joe has become an executive advisor to the president of Coastal Carolina University. what's What's really interesting is Joe is still all in on college athletics and the topic of where we go from here. And so that's really what we're going to talk about today. And you know, I love talking about that. That's why we created this podcast. And so let's go into it. My interview with Joe Moglia.
00:01:38
Speaker
Well, Joe, I really appreciate you taking the time to to join me for this conversation. You're somebody who I really admire, not only all that you've accomplished, but the the initiative you've taken to really be a thought leader. in this really crucial era we're in in college athletics. I know you care deeply about college athletics from your time at Fordham all the way through, um your time being at the helm for Coastal Carolina. So you're real excited about this conversation. I think the the place to start is really how we got
Impact of Media Revenue and Court Cases on College Athletics
00:02:12
Speaker
here. The 2010s saw a media revenue boom or the pie got bigger and bigger
00:02:19
Speaker
when it comes to gross revenue in college athletics. But we also saw several court cases really lead us into the present. Cases like O'Bannon versus the NCAA, which was about NIL. The Fair Pay to Play Act was not a court case, but in 2019, it was California saying, we're going to allow our schools to do NIL. And then, of course, the Alston case in 2021. If you were to sum up people, like, how how did we get here from your perspective? yeah Well, first of all, Jim, I'm delighted to be on the show. and And I am a big fan in terms of the stuff that you do. I think it all really comes down to money. And I recognize the court cases are all about money. So if you go back to the the media boom in 2010, that was the Big Ten and and and Jim Delaney. And frankly, Delaney, I think, was well ahead of the other commissioners at that moment in time. And that's when they put together the first real significant TV contract.
00:03:13
Speaker
So over the span of the next couple of years, is the as the schools in the Big Ten started to get more and more money, and the other conferences started to kind of catch on to that a little bit, then people started to ask, well, how about our cut?
Critique of NCAA's NIL Leadership
00:03:24
Speaker
This goes back a good 10 years, as you point out. And ah I think that went back and forth. and then Numbers kept getting bigger and bigger. Every year in the Big Ten kept a little bigger, a little bigger, a little bigger. And this was on top of all the revenues that would have come into a particular university you know without the TV revenue. And that's when I think that the NCAA and everybody sort of compromised, and they came up with cost of attendance. So back then, ah you know each of the athletes would get, let's say, $5,000, $6,000, $7,000, whatever it was at the time. But that was a little bit of a compromise. But then the numbers got bigger and bigger and bigger.
00:03:59
Speaker
And then going to 2024, it looks like that the typical team, not counting the new additions, but the typical team in the big tank could get as much as $100 million. All right, so as the numbers got huge, the idea of like, we need a bigger share of that got bigger and bigger and bigger. So that became a discussion with Mark Emmert first with the NCAA. And basically the NCAA, if you're a business person and you look at the flow of money, It's clear we were headed in this direction, but they didn't want any changes. They wanted status quo to stay as it was. So they argue amateurism that argue all these things while all their schools are getting richer and richer and richer and the players are still stuck with the cost of attendance. So it was a fight. You know, we're amateurs. We're college athletics. We're not supposed to get paid. ah You know, we're student athletes. We're all that. Well,
00:04:47
Speaker
Eventually, that moved on, and ah they come up with NIL sort of similar to what we know today. And I recognize that the NCAA was involved with trying to fight this. But what they didn't do, when the NIL was announced three years ago, the NCAA abdicated their responsibility for this. And I am a big, big, big leadership guy. And and ah in my five decades, whether I'm on Wall Street or or the world of college coaching, I've never seen ah a poorer example of leadership than the NCAA abdicating their responsibility at a time when the most significant thing to happen in history college college a like athletics is happening. Now, there's an argument, well, they weren't able to do anything about it anyway. That's not true. They could have at least, they I'm sure they could have compromised instead of fighting it, recognized it was gonna happen and then set up some guidelines, set up some structure, set up something, maybe have a talk, for example, about academics, but get in there and do something. They didn't do that.
00:05:44
Speaker
And when ah Baker replaced Emmert, you know, he's trying to go to Congress together. He's a lifetime politician. He's going to Congress to to to try to try to get this fixed. If you're in in the private business world, there is nobody from the private business world that would say, let's go to Congress to see if we can get this fixed. In fact, Reagan said in 1986, you know, the worst nine and words in our language is, hi, I'm from the government. I'm here to help. That's the last thing any of us would do. But that's what we're doing now. Consequently, we have greater chaos than we've ever had before. And people are just talking about more and more money and things are getting more and more out of hand ah without good structure. So that's, I think, how we got here today.
00:06:23
Speaker
But I think you know this is probably a theme we'll continue to come back to throughout this conversation. But there's leaders who lead in the present with the present in mind. And there's leaders who think about the future and have the future in mind with with how they make decisions. And it seems like, for the most part, It's been college athletics leaders thinking about today, today, today, and not tomorrow. And it's only been court cases that have forced them to innovate, not their decision to innovate on their own. And we'll get into where we are today with the settlement. But do you agree with that? I mean, it seems like we're missing an infinite minded leader.
00:07:04
Speaker
No, I think think you're youre you're definitely on point with that. I think you go back a few years if the NCAA had been thinking the way you're suggesting, had been thinking forward. Again, if you've got a business mind at all, you cannot not see that this is going to happen. So you may as well be part of it. And I bet you they could have negotiated something three or four years ago that everybody would have been happy with. Now, maybe you're just over time, but everybody would have been happy with with structure and you wouldn't have had any lawsuits. But that's not the way that we're thinking. So the more you want to hold on to the status quo, the more you get mired in the mud, and the more you have an inability to move forward. And that's pretty much where we are now, even though the NCAA and some of the colleague ah some some ah some some of the colleges were making a great progress. I don't see the progress. All I see is kids are going to be making more and more and more money without any structure.
00:07:55
Speaker
Well, you know, this conversation, we want to talk about how we got here, the past. And now we'll talk a little bit about where we are today, which
The Current NIL Landscape and Challenges
00:08:03
Speaker
I would argue is like purgatory. There's still a heaven that awaits that is great for everyone in college athletics. But to get there, we we still have a lot of progress that needs to be made. And so the present, you now have NIL and with that you have collectives who are yeah basically making up about 90% of NIL dollars that go to athletes. The other 10% is traditional NIL endorsements. Collectives are primarily funded by donors who are essentially laundering money to be able to pay players to go to their school
00:08:36
Speaker
And it's revenue sharing outside of the school sharing the revenue. And you know we've seen this settlement now happen that says, well, the school can directly share revenue. And there's still a lot that has to happen. Mike McCann wrote a great article in Sportico about the fact that there's many things that still have to play out for this settlement to be approved by Claudia Wilkin. But whether it's the settlement or whether it's NIL uses pay for play, there's a lack of structure. And while all that's happening, you have a new CFP deal that not only is a lot more money, but it's a lot more games, which of course the players haven't even agreed to. They've not even been asked, but more games, more money, pie getting bigger, and now you have this NIL situation that is potentially gonna be not replaced, but added to by schools sharing revenue. So, I mean, how do you sum it all up again as you look at where we are today?
00:09:35
Speaker
Well, again, I think you're doing a pretty good job, Jim, in summing it up yourself. I chuckled a little bit when you said, when in the world in college athletics would you have thought that we're putting together something like a tournament or a CFP and then actually say, well, the the players haven't agreed to it yet? At what point in time in our history would somebody have actually said that? But I think no i think you write on that that is where we are. ah ah But the biggest issue is, is again, lack of guidelines and lack of structure, um lack of uniformity, ah equality, fairness is all part of that. And one thing that nobody talks about is a simple academic piece. Now, we're still these kids are still going to college and nobody's talking about
00:10:18
Speaker
um GPA, nobody's talking about their eligibility, nobody's talking about graduation rates, nobody's talking about any of that. yeah And how how can college athletics, we begin with student athletes, student is an important word there, and it's not even in the discussion. All right, so with regard to what's going on, you still have chaos with regard to the portal. And by the way, there's 567,000 college athletes, and only about 2% of them are getting anything at $10K or more. $10,000 or more. There's only about 2% of them. And about 5% might be getting something. That means 95% or 535,000 athletes are not getting a dime. And we're not talking about any of them.
00:11:00
Speaker
So we're were we're we're so focused on the structure and the ability for a player to get paid, which I understand and I'm okay with. I get that. And we're ignoring the equality, we're ignoring fairness, and we're or ignoring everything else that has to be going on, ah especially with regard especially with regard to academics. So um unless these issues get addressed and get fixed, there's going to continue to be chaos. So they still need to find a solution that's ultimately going to work. And they're not out of the woods yet on the lawsuits. Yeah. And I think what's interesting is the consolidation of these cases, House Carter Hubbard, They thought Fontana would be consolidated into these cases. That has not been done yet. So that could still play out separately from this. But it's all about revenue sharing. It's not about employment, which still hangs in the wind with NLRB cases, Dartmouth, yeah USC and UCLA. And it's also not addressing NIL, the transfer portal.
00:12:01
Speaker
and health and safety benefits that in a lot of cases the school should want to figure out so that they don't have to deal with a lot of headaches coming their way. I mean if you're going to do revenue sharing and you also factor your transfer rules into that so the revenue you're sharing comes with a commitment of a term of time for those athletes you now could have transfer rules. Same thing with NIL collectives if you want to delineate a fee for NIL from the school to the player instead of a fee from somebody else with a non-compete, the schools could probably put something like that together where if the player gets paid by the school, they can't get paid by a collective. I could keep going, but there's a lot that's not being addressed. And I think you're saying that by this settlement and some of the things that will come from it. It seems like a missed opportunity for the schools to have, for the first time ever, a partnership with their student athletes on all of these things.
00:12:57
Speaker
so that the student athletes know all that they're getting can maybe speak up about what they want that they're not getting and the schools can have something that they feel good about so they don't keep getting sued. Do you agree with that? Yeah, I do agree with it. the ah ah First of all, as as you've you've already pointed this out that ah the current current leadership within college athletics is thinking about today and worrying about how much money this is going to cost and not worrying about the future. If they did a better job of worrying about the future, they'd be able to do a lot of the things that you're actually talking about, develop a better relationship long-term with what your student athletes are supposed to be,
00:13:33
Speaker
whether they're getting paid or they're not. um How do you incorporate that into health benefits? How do you incorporate that into ah academics? And there's one other thing that doesn't come up. I think you're well aware, 75% of the Retired NFL and NBA players five years after they leave are broke. And their professional athletes and each of their teams are supposed to be giving them help from a financial perspective, guidance at least as far as that goes. And they have 25, 30, 35-year-olds. These are 18, 19, 20-year-old kids. And to what extent do they have an understanding of financial literacy?
00:14:14
Speaker
They don't. They don't. To what extent do do ah high schools teach that? To what extent do universities do a really good job of teaching that? They have finance finance courses. They have accounting courses. They have economics. said of but But to what extent do they really understand financial literacy? The simple idea of having a budget. Simple idea why you should have a 401K, simple idea why you should save, simple idea in terms of what taxes are. So if the kid's getting 100 grand, right away, right away, that's probably going to be closer to 50 than it is 100, not counting what his agent and everybody else are going to take out of it. So what kind of experience does the typical high school kid going to college or the typical college athlete really have with regard to this? And they got to count on their agent, they got to count on their lawyers, and they're not always going to get
00:14:59
Speaker
Those lawyers and agents don't always act in the best interest of of the of this, so of of the student in this case, students. right so So all of this continues to be out there, and we're we're not going to have who it's it's not It's not going to come to resolution ah until all these things get fixed. But they're so afraid about how much money they're going to have to pay out. Even that, they're not thinking about right. So they seem to be happy to have a $2.7 billion dollars settlement today, which comes up 10 years from now, so that he gets served after 2034. Why would I want to do a deal, a business war? Why would you do a deal where you could come up with a settlement and you still have liability down the road? And why would you do a deal with a particular group where other people around you can come in and get their own deal?
00:15:42
Speaker
You can't move forward with the settlement as it is without making sure that all these other lawsuits get part of that settlement, but they're not. So even where they think they had they've been able to control and stay away from the total $20 billion dollar liability, but they they don't have their arms around this yet, because the $2.8 billion dollars number is not settled, and even if it is settled, more
Need for Innovation and Leadership in College Athletics
00:16:02
Speaker
suits are going to come in from the outside, and they're going to have their own settlements. So the $2.8 billion, dollars my my number is going to be much bigger than that. so My guess is that number is going to be bigger than that. the The total damages in the three cases that were consolidated for this settlement, plus the Fontenot case, which hasn't been consolidated yet, it was $20 billion.
00:16:21
Speaker
So they're looking at it like they got an 85% discount, but the reality is there still could be more added to it later, as you're saying. And it it just feels like this is a moment in time where some leaders could actually step up and say, you know what? I am going to think about the future. And when I say those leaders, I'm really talking about commissioners. You think about, I read your op-ed in the Indy Star, by the way, it was great. It talks about the NCAA and the lack of probably need for the NCAA. And you even said there might be a couple years where there's some chaos if the NCAA went away, but the conferences would take a lot of that over. The conferences are the smallest sample of
00:17:02
Speaker
similar schools. There's still a big difference between Ohio State and Rutgers or Alabama and Vanderbilt, but the conferences have these equal distributions of media revenue and have a lot of other standards across the league. And it seems like if you think about all these issues from a student athlete perspective and how to inform student athletes about these things, but then also get their voice to be a part of what you decide to offer them so that it's agreed to, that that that would be innovative. I i would say there's 110% chance that that's where this ends up. But I think that it's going to be interesting to see if anybody wants to be an early adopter to initiate that rather than being made to do it by the courts. And I think that's the problem of leadership right now in college athletics.
00:17:50
Speaker
I think the early adapter would be the leader that you're talking about. And I think like right now, ah we've talked about this, of course, with regard to leadership, but I've not yet seen a college president step up and try to be yeah a leading voice on this. I've not seen ah college athletic threat step up and try to be a leading force on this. Now certainly stanky and some of the commissioners have spoken up because they get interviewed but I haven't seen them necessarily step up and do this. I appreciate though I think the reason why the commissioner the each league
00:18:22
Speaker
It's a smaller sample, and you could do a better job fixing or controlling a smaller sample than you can the entire pie. You've got the entire pie. Three years ago, when this was announced, I was at the Division I Athletic Director ah Conference in Dallas in April, and they were asked me to speak. And I was supposed to speak on leadership, and they changed their mind. They said, we want your unfiltered perspective of what's taking place in college athletics today. Three or four weeks before that, they had just announced the NIL. So I was fortunate enough to sit in a lot of the meetings that were the transition meetings where they were going to have the our solution to this. And in so many of the meetings, somebody come up with a good idea, and then somebody else said, well, but that's not going to be good for girls' tennis. Somebody else comes up with another idea. Well, our lawyers are never going to allow us to do that.
00:19:06
Speaker
So if you keep if if you keep coming up with reasons why you can't do something, you're never going to get anything done. A leader doesn't do it that way. A leader takes everything into account, then figures out a way to be able to get things done. And sometimes you've got to take it in bits and pieces to be able to do that. Power five football with regard to NIL is very, very, very different from men's tennis. It's just very, very different. You cannot solve the two and still wind up with with something that works at the end. You've got to be able to solve for one, get it right, solve for the next, et cetera. So what you're talking about, Jim, with regard to the the commissioners, you they they would better be able to get their arms around. And the more business minded they are, the better the chance they'd be. But I still think it comes down to to being a good leader. And a good leader takes responsibility for himself, and he recognizes or she recognizes it's not about him, it's about their people.
00:19:55
Speaker
and they got to get that right. A part of the people here are the student athletes, but it's also the school, it's the fans, it's all of that. And right now we don't have our arms around this. No, we don't. um You know, I think about just trying to think about a good example of leadership from conference commissioners. um I go back to COVID. And i'll go i'll I think Greg Sankey deserves ah a bone for this one. ah Everybody started freaking out about myocarditis and some of the studies and canceling their football seasons.
00:20:28
Speaker
And Commissioner Sankey said, you know what, we we already have a plan. We've already delayed the start of our season to the end of September. We're playing a conference only schedule. We're gonna stick with that plan as we continue to look at all the facts. And of course, they ended up playing, others started following weeks and even months afterwards, and we had a CFP. And I would argue the revenue implications of that alone, probably, I don't wanna say saved college sports, but it was a pretty impactful leadership decision that was very unpopular when it was made because everybody else was canceling, but it became an anchor that other conferences used to come back and it saved that year's college football season. We need something similar now. We need somebody to to say, hey, this is where it's going to end up. And I know about this liability and that liability, but
00:21:19
Speaker
That's a liability in the present. I'm more worried about the liabilities of the future and I want to start addressing those now so that we can have the very best student athlete experience at our schools and it sets us up to be you know the model of the future. and And so I wonder if, and go to the next topic on where we are today, This settlement, if it does get approved, is going to allow for 22% of gross revenue with escalators over the years that will go higher to be shared with the student athletes at that respective
Revenue Sharing Debate and Title IX
00:21:52
Speaker
institution. now
00:21:54
Speaker
I'm leading a player's association with 3,400 athletes and obviously I'm trying to advocate for the athletes on everything. And in this case, I think 22% is low. I like the escalators. We've we've got a lot of perspectives from our athletes. Let's put that aside. If it's proved and that's what it is, you're already seeing a ton of people argue about how that's going to be distributed. Do you take 20 million and divide it amongst 500 student athletes and they all get 40 grand a piece? Some people think that's the necessary route because of Title IX. Others are looking at the class settlement on the 2.8 billion, which 90% of that money goes to football and men's basketball athletes going back to July 2016.
00:22:39
Speaker
And 5% goes to women's basketball athletes and 5% goes to the rest of the sports. And some schools are saying we're gonna follow that same model and how we distribute 20 million to our 500 student athletes and football and men's basketball are gonna get the lion's share. Regardless, there's gonna be a different situation at every school. And you wonder if that could become you know really an impetus to get some standardization happen across the conference level because it looks like it's just going to be another mess of of no structure. Well, right now it is no structure. And I think the whole thing that we're talking about now is to be able to move forward in a way where we find structure, we find guidelines, we find something that really literally winds up working.
00:23:22
Speaker
And I think we're so focused on the athletes that are gonna get paid, we have ignored the athletes that are now never gonna get any money because they're just not good enough. You bring up Title IX as an example, too. Within Title IX, within the education world, within within the world of academia, ah women are entitled to be able to get their fair share of the pie. If you look at this as a business, if you're gonna pay the players, it becomes a business, not a maybe, it's a business. So with regards to business, right It's the revenue generation and how you're able to generate that that revenue that's going to determine how individuals get paid. Well, how individuals get paid is not necessarily... Now, I'm not talking about a woman's coach versus a men's coach in and college ranks. I'm talking about is the individual athletes, how a quarterback contributes to the revenues that
00:24:16
Speaker
his team brings in to that particular conference versus what somebody in the non-review sports wants to bring in. A very, very, very different numbers. And it could be baseball. It doesn't have to be a gender thing. A baseball up player who's also a mal doesn't get what the quarterback has. Right, agreed. So, with regard to so looking at it maybe more from a professional perspective, that's one of the ways maybe you will at least address Title IX. Look at ah well what's the typical compensation of women's basketball today and the WNBA versus what it is in the NBA. I mean, it's it's not even close. It's multiples apart.
00:24:50
Speaker
but you you want to be able that You want to be able to incorporate Title IX, but in a way that works from a business perspective. If the NFL or NBA ran themselves today, Jim, the way college athletics is doing it right now, they would go out of business. So why not look at a model where they figured it out, where money is involved, where they were successful, and it makes some sense. So also on the topic of the settlement, the hypothetical of the settlement getting approved is where the schools are going to find the 20 or so million a year to share with the athletes. And of course, if you're a bottom half power conference institution from a revenue standpoint or a budget standpoint, You're scrambling right now. right Because you're like, where am I going to find this extra 20 million? And you know you're starting to hear about private capital coming into college
Private Capital's Role in College Athletics
00:25:43
Speaker
athletics. We've seen a few different reports of that. What are your thoughts on college athletics programs taking on, not private equity, because there's no equity to sell at this point, but private capital to be able to have a cash infusion to afford what is essentially talent to come to your school?
00:25:59
Speaker
Well, I want to differentiate now. When you talk about private equity, you're talking about investment. You're talking about private capital coming in. Are you just talking about ah incredible people donating money? No. I think an example would be recently there was an announcement of CAS, College Athletics Services, ah which is a fund put together by Redbird Capital and Weatherford Capital to have a ah credit, a private credit ah product for schools to take you know $80 million dollars and then have a rev share with CAS um on certain revenue streams that they're generating. And so based on those reports, it seems like schools are at least entertaining that because they're scrambling to figure out how are they going to afford what is essentially this talent line item that's now going to have to be in their budget.
00:26:46
Speaker
I think it winds up going back, Jim, to a great extent to what we talked about before. That is, too many people are thinking about what's going on now. So right now, you've got a financial problem that you've got to be able to solve. How do we come up with more money right now just to pay our players right now so we've got the best players we can, at least at our level, so we can compete effectively? OK, that's number one. Number two, though, with regards to these type of capital deals, they may solve your problem now, but you've got to pay the piper with these later on. I mean, the yeah if i'm raising if I'm raising money and I'm willing to give money to, or in effect, it's almost a loan, right if you if I'm going willing to give money or loan money to ah institutions that are going to distribute that to their athletes in a way that they see fit, I got to get a good return out of that. Well, now, that's just so much more taken out of the revenue pie.
00:27:35
Speaker
so but later on. So we talked about what is, how are you going to handle the revenue stream of $20 million? dollars How do you, how in effect do you handle that? How do you break it down? Well, a piece of that now is going to go to, is going going to wind up going to those funds that have provided you with private capital. They got to get a return. Right. So, so it helps solve your problem today. Doesn't necessarily solve your problem down the road. And I think it's a perfect segue into where we go from here because you said it earlier, this, all this, this revenue sharing stuff is really a very, very small group of student athletes that play power conference level
Proposal for Professional vs. Amateur Sectors
00:28:18
Speaker
football. And you could probably throw men's women's basketball in there too.
00:28:22
Speaker
90% of the total market of college athletics comes from those athletes producing enough eyeballs and demand to have media revenue to the degree that that we have for those sports, March Madness and then CFP and then the conference media deals. We're trying to solve problems for all the athletes in one shot. There's no focus. If you focus on that one group, and you help create a path for them to get a pro radishare of the revenue they help produce, it could allow for a better world for the rest of the athletes in so many different ways that you described in this call. So as you consider all that, what should this look like?
00:29:06
Speaker
So one of the things, I've given this a lot of thought over the span of the first three years and go back a little bit, when this was first announced at that same conference where I was speaking, I actually suggested that all of athletics should break away from the NCAA. Obviously, that wasn't going to happen. So about a year later, I said, OK, it's still not working. Power five football very least has to break away. And now as we go further down the road, I think what really what really comes down to here, you have professional organizations. That's a business. Then you have a good good piece of it that is not that that is that is not money oriented, so to speak. So if you had if you if you you had two entirely different groups, you have a professional collegiate group.
00:29:46
Speaker
ah ah college professional athletes or athletics and ah That's begin with power five football and men's men and women's basketball to begin with and begin with that in all division one Okay. Well, they break away now their professionals. So you the players are going to get paid So if they're going to be successful how they're going to get it done The NCAA has already proven at college athletes in general has already proven that they can't they're not they don't know how to figure this out and They can't figure it out. they A big reason why we have the problem, and they're not able to fix the problem. So why not? You have to break, not a maybe, you have to break away from the NCAA. I thought about division one, power five, division one, power five football, and men and women's basketball.
00:30:33
Speaker
And you find a model like the NFL that is very successful, that makes a lot of money, and it took a long time to be able to get there. And you have you follow that model. You have your own executive team that you go out to hire and you pay, and they have one responsibility to take care of college professional athletes or athletics. That's their professional collegiate athletics. That's their job. And they model themselves after the NFL. So you're going to have collective bargaining. You're going to have employees. You're going to have salary caps. You're going to have health and benefits. You're going to have all the things that would be associated with what takes takes place it in the NFL as an example. But you're moving in the right direction. Now,
00:31:11
Speaker
Everybody else, which is like 95 percent, you know, let's say you call it more than that probably called fcs football and all division two division three to begin with and all the division one sports other than men and women's basketball and again We're using that as an example and football for now. Well, they're amateurs period. They're amateurs and there's nothing wrong with that College has been amateur for hundreds of years. So yeah that's the collegiate amateur ah ah athletics CAA, whatever we want to call them. And they run themselves similar to the way college athletics ran themselves prior to NIL.
00:31:46
Speaker
The athletes don't get paid, they report to the NCAA as they have, they compete for their own respective championships. Now, an argument comes up, well, how about somebody that thinks they should get paid? Well, first of all, they got thousands of thousand people on a portal that are not getting paid. So if you're good enough to get paid, if you're good enough to get paid, that means somebody has to have interest in you at the professional level, professional collegiate level, and thinking of you enough to recruit you and they'll pay you. that's how that That's how, in effect, that'll wind up working. With regard to ah other sports, big the conferences themselves or the schools themselves, in conjunction, with I think, with the conference, can decide, you know, do we want our golf team, men and women's golf team, do we want them to be professional?
00:32:30
Speaker
Well, if we do, have them be professional. And they compete with others that are professional. They have their own championships. But you run professional organizations differently than you run collegiate and academic organizations. Amateurs are one thing. NCAA college athletics up until three years ago for the last couple hundred years, not catting but not talking about cheating now. And then you have professionals run like professionals, because that's exactly what it is. So they can that becomes fairer, and everything starts to fall into place almost immediately. Now, it'll take a little while to get there. It may take a year or two to three, but it's a it's a so it's a solution to a significant problem that exists today. You cannot treat all college athletics the same, and just even making believe you're trying to do that doesn't work. So separate the ones that are professional from the ones that are amateur. Run the professionals just like the pros, and run the amateurs the way
00:33:24
Speaker
college athletics has been run for the last ah five decades. I love it. I think what what's interesting is if you did that, you also could argue that there would be a lot more media revenue to generate.
NFL Comparisons and Media Revenue Potential
00:33:37
Speaker
You look at right now, the highest viewed college game on an average week still doesn't perform as well from a viewership standpoint as the lowest viewed NFL game, right? And there's 10 billion more a year in media money that the NFL gets because There's more parity, closer games, single-digit spreads. We know how much gambling now is driving viewership. Fantasy football is possible because there's only 32 teams. There's a lot of reasons that the NFL, along with being a better product, it's the best players in the world, outperforms college football. But if you take the best teams in college football and have them play each other more often,
00:34:12
Speaker
You have the ability to generate more viewership and we've even seen reports and ideas of super leagues with data around it. There's been claims of three, $4 billion or more a year in media revenue that could not only go to the schools that create it, the top 12 or whatever programs that could get some upside from it, but you could trickle down that money into this football league that you're talking about in a way where um it it could be great for everyone. Do you agree with that? Yeah, I do. I think it's insightful on your part. Now, you would know the numbers better than I if you had a chance to see it today, but I think it was announced today that the NBA ah just inked
00:34:50
Speaker
10-year, like $67 billion. dollars and' i'm I'm not sure exactly what the numbers are, but they were huge ah for for the NBA. And I think it was Amazon, I think it was CBS, and I think it was ESPN. They came up with this huge thing. Now, now that's men's basketball. Well, suppose if you took the best schools in college, best football schools, And you have, let's say, the top 40 or 50 teams, top 40 teams. And you, again, run it like a business. You don't negotiate individual teams. You don't negotiate for individual conferences. You've got one professional organization and you and you negotiate for all 40 or 50 of those schools, whatever whatever amount it's going to be.
00:35:33
Speaker
You would get probably more people wanting to watch a college football game at that level than you have one who watched men's basketball. And the the the negotiation for meteorites that you could get on that, I think would far trump anything that exists today. And everybody could be able to have a benefit with regard to that. But that's also the idea. You're professional, you bring everybody together, and you act as one. That's far more powerful than the big 10 of the SEC or the big 12 or the ACC representing themselves.
00:36:05
Speaker
Oh, absolutely. And and and yet that's exactly what they continue to do because they're trying to hold on to what they have with their conference media deal. Let's keep in mind that while they're holding on to their conference media deal inside of that room of those 12, 14, 16, whatever schools, they're a little bit of like, why do you get the same amount as us? We've seen it now with Clemson and Florida State and the ACC. So whether it's that infighting that's inevitable in all these conferences or whether it's the preservation of keeping the media deal that separates us from the rest intact instead of innovating to bring this thing together, grow the pie for everyone, we're delaying an inevitability
00:36:50
Speaker
that would would really solve a lot of the issues that you brought up. That NBA deal, by the way, $76 billion over 11 years ah between yeah ESPN, NBC, and Amazon, like you said. and and i think that We're in a really interesting situation because there could be a world where UAB down the street from me right now or Coastal Carolina who builds its program into this this power that is being considered for the CFP could actually be playing for a championship in their section of the league to get themselves up to the next league. That game would get a lot of viewership just like Butler playing in the Elite Eight, go to the Final Four for a second straight year, gets a lot of viewership.
00:37:36
Speaker
You know what I mean? So I think there's there's so many ways. Yeah. i think I think without any question, I mean, when we played in the for the College World Series, we certainly got 2016 when we won the national championship at baseball. and We got a lot of viewership from that. Over the last few years, I mean, we've had College Game Day on our campus. 2020, we were ranked 11 in the country. We played Brigham Young. We was ranked 9th in the country. and you know with the huge game you got huge huge attraction then so i think with 10 12 years ago coast carolina was very very much a local university today we're certainly at least reasonably well known from a national perspective and we've got more of a regional presence and so i without question but you can't just you got to make some noise so you got to be able to get there and um ah there's there's different values from from again if you're a business
00:38:25
Speaker
things have different values. So even you might be, even though you may be part of the professional organization, ah Alabama playing Auburn, Michigan playing Ohio State has a different value than what Vanderbilt is playing Georgia Tech. And that value is is would need to be would would need to be captured and and figured into whatever ah what whatever the final solution would be as far as the overall numbers go. And then it's fair to say, well, you know ah you're going to give these people more than you're going to give those people. Well, how about the if you're using the NFL as a model?
00:38:59
Speaker
yeah but what is Green Bay and New York City and LA, they have different different crowds. They have different different different ah TV audiences. so ah But the NFL figured out a way to be able to handle that where everybody's treated fairly. Otherwise, you're not going to have competition. ah That was going to happen. and Then you can decide, well, should Vanderbilt and Georgia Tech be part of this next group? Because it's going to cost them a lot of money, too, to be part of that, although they could get a lot of money in return over time. and In that example, you also have a reality that for some schools to decide for their football program to join this professional sect of college athletics,
Business-Minded Leadership in College Athletics
00:39:39
Speaker
they could actually sell equity in that program.
00:39:43
Speaker
And let's just say that happened and there were owners who came in and built a front office and ran it like a professional team. Every team would get different valuations for what they're worth, right? And Alabama would be a multi-billion dollar valuation. If they wanted to sell 50% of it, they could get a billion dollars or more to sell 50%. They also would endow with that money. and that would run athletics for the rest of their lives on the amateur side. But that's a whole other story. The point is, is they're ah they are all different values. But it's a good thought. It's a good thought. There are all yeah all of different values and there are haves and have-nots. I'm so, I'm so tired of hearing people say, well, if we do that, we're going to have haves and have-nots. We are haves and have-nots.
00:40:24
Speaker
For 30 years. Okay, I'm going to bring them home. For 40 years. Last question. You stepped down as head coach. You became an executive advisor to the president at Coastal Carolina. um That has given you yet another ah piece of perspective in in your life, which as I said in the bio at the beginning, you've done a lot of different things. But working with a college president, the reality is for any of what we talked about to happen, the presidents have to get on board. How do the presidents understand this and get on board with this? I think for me, it's a first of all, it's who you're working with. right So I get a chance at our place to work with a guy by the name of Michael Benson that I have tremendous respect for. And we've got a great relationship, and and I value that.
00:41:10
Speaker
When I step back for a minute and I think about college presidents in their entirety, they they they they do come from academia. And the academic world becomes very, very full up philosophical. philosophical um It tends to be a little bit more on the liberal side. And decisions very often are made by committees, and they try to make everybody happy. A little bit like politics. But you can't make great decisions if you're going to make everybody happy. You can't do it. You can't have 15 people ah decide who who who the next head football coach is supposed to be. that That's got to come down to a very, very, very small group that discusses it. And ultimately, one person's got to be able to make that decision. So right now,
00:41:51
Speaker
In the academic world, the reality of what these numbers are, I think everybody's saying, oh, well what's this going to come to down the road? But nobody's stepping up to say, I think it's going to come to this down the road and let's create a path to get there right now that's going to help us get there. Let's solve some. Let's solve some of the low hanging fruit right now. rather than kind of wait for all these things to happen down the road. So I think within college leadership, within the the the world of the the college college president, these are really very, very real business decisions.
Call for Innovation Beyond Legal Mandates
00:42:26
Speaker
They are professional in nature. In the world of academia, they're academic type decisions based on educational institutions and organizations that have been around for a long time.
00:42:39
Speaker
And a lot of times, kind this is the way we do it. And um ah they can think about a lot of things and they can think about a lot of things in different ways. But I could see in the future, especially as it gets bigger and bigger and bigger, I could see business people coming in to be college presidents as opposed to just academics tend to be higher education. College presidents. Yeah. Yeah, that's ah that's a good thought. I just think that if you look at all of the things that have changed over the past 14, 15 years, all of those changes have been forced by the Supreme Court or the courts. There has never been a situation where a leader has innovated. And I think this wonderful industry is as hungry as it's ever been for some leaders to step up and innovate, whether it's presidents, commissioners,
00:43:29
Speaker
um in in the near future. And I love this interview because you've made so many great points about how they can consider doing that. um And I love the fact that you're dedicating this next segment of your career into helping with all these things that need to be figured out. So I just really appreciate you taking the time to have this conversation. Well, I appreciate you having me on Jim and good luck with all those things you have going on and let's keep our fingers
Emphasizing Leadership for Change
00:43:55
Speaker
crossed. We need leadership if we're gonna move in the right direction in terms of college athletics. Awesome stuff. Joe crushed it. Not surprised. Listen, if you want to check out the indie star op-ed that he wrote, we've put that link in our show notes for this podcast. So definitely check it out. It's really well done. But I think the biggest thing is we need leaders to step up. We need presidents, commissioners to step up and not be forced by the courts
00:44:21
Speaker
to create new avenues and new structures for college athletics. But on their own accord, they need to innovate a win-win for college athletics, for student athletes to have a true partnership, whether it's through amateurism or through professionalism, with their institution to preserve all the things academically, revenue sharing, health and safety, all the things we discussed. That's where we need to get to. And I feel like Joe did a great job talking about how that can happen and what the future holds. If you want to share this podcast, we'd be humbled by that. We want to continue growing our audience. Our subscribers have gone up every month. So if you haven't subscribed, subscribe on Apple Podcasts, Spotify Podcasts, on YouTube. You can also follow us at Now It's Legal Pod on Instagram, where we share clips from each new interview and each new episode. So you're in tune with new episodes being released and some of the content that you can experience if you listen to that episode.
00:45:18
Speaker
Thanks again for tuning in for this episode today and stay tuned. We've got a fun group of interviewees coming in the next few episodes of Now It's Legal.