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Bubba Cunningham - Now It's Legal with Jim Cavale - S3E6
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In this episode of Now It’s Legal, Jim Cavale sits down with UNC Athletic Director Bubba Cunningham to discuss the future of college athletics amid growing legal, economic and structural challenges. Cunningham shares insights on his planned transition from the AD role and the strategic decision to bring in Steve Newmark, a professional with broad business experience. The conversation dives deep into the evolving economic model in college sports, emphasizing the urgent need for enforceable rules, potential for collective bargaining and the consequences of inaction, including the loss of Olympic sports and further institutional disruption. In this episode, Cunningham advocates for a realistic, measured path forward all while highlighting the importance of leadership, collaboration and fresh perspectives in solving the challenges facing college athletics today.
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Transcript
Intro: Manziel, Drake, and College Athletics
00:00:00
Speaker
Manziel had the high-selling jersey, bro, and moved back to Cleveland. Drake made a song about a man he ain't even working.
Introduction to 'Now It's Legal' Podcast
00:00:11
Speaker
What's up, everyone? Welcome to another episode of Now It's Legal, the podcast where we talk about everything past, present, and future in college
Featuring Bubba Cunningham from UNC
00:00:20
Speaker
athletics. I'm your host, Jim Cavall, and today I'm joined by a very special guest in Bubba Cunningham. Bubba is a guy who has been at the helm of athletic departments for decades, currently holding the title of director of athletics at the University of North Carolina.
00:00:35
Speaker
And he's also somebody that I've gotten to know throughout my time at Influencer and Teamworks and now at athletes.org is a guy who's trying to think around corners, trying to think ahead and really cares about the industry like we do and like you do as a listener.
Leadership Transition at UNC
00:00:51
Speaker
So that conversation about the industry could not be with anyone better than Bubba.
00:00:55
Speaker
And that's what we're goingnna be talking to today. And so Bubba, first off, I really appreciate you making time. um And, you know, I got to ask you, you've made a ah transition announcement recently. And I think it'd be great for people to hear more about that before we get into talking about the industry.
00:01:12
Speaker
Yeah, thanks, Jim. And it's ah good to be with you today. I appreciate it. Look forward to the conversation. yeah i made an announcement last week or two that this will be my last year as the AD at North Carolina.
00:01:24
Speaker
We're hiring Steve Newmark to come in. Steve's been the president of ah RFK Racing down in Charlotte for about 15 years. Born and raised here in Chapel Hill, so has a lot of connectivity to to the university, to the people that still live in this community. Has mom and dad are here. Has got a couple sisters here.
00:01:42
Speaker
So a lot of connection there. And I think, you know you know, we've been very successful for a long time. Carolina has. And I think a succession plan makes an awful lot of sense. In fact, my last contract,
00:01:53
Speaker
We wrote into that that I would help build a succession plan for when I when i left the position as AD. And there's still so many things going on. As you mentioned, the the environment's changing, the the rules of engagement for intercollegiate athletics, the economic model's changing.
Future Role of Bubba Cunningham
00:02:08
Speaker
ah We have 28 teams that we're supporting. We've made a transition in football this year. um There's a lot of good things going on, but there's also a lot of change. So I think it's appropriate that and we overlap for a year, work together. I can introduce him to college athletics at the University of North Carolina, and he can bring his professional background, his legal background, and all of those things to Carolina that can be helpful to us as we move forward. So Very excited about it.
00:02:34
Speaker
I'll also be a part of the university for four more years. One year is AD, three more in another capacity working with the chancellor and and Steve and help guide you know where we're headed next. So im very excited about where we are.
00:02:47
Speaker
You know, but I love how you broke it down. And I think what's interesting is, um you know, we've seen recently several hires at high profile schools like North Carolina. Notre Dame could be another example where um We've seen somebody come in from, quote unquote, the outside.
00:03:04
Speaker
right They haven't been an AD or an athletics administrator for their entire career, but they can come in, bring some fresh ideas and experiences from the outside, from a business standpoint beyond.
00:03:15
Speaker
um And we've seen folks who are veteran athletic directors like yourself, Jack Swarbrick at Notre Dame with Pete Bavacqua coming in. And other examples, Joe Castiglione is going to do it at Oklahoma, etc.
00:03:26
Speaker
um Do you think with the vets, as i'll I'll call you, who've been in it for a long time, who want to see it go into ah a positive direction, that we're going to see more of these non-athletic administrators come into the chair to lead athletic departments?
Rethinking Athletic Director Hiring Practices
00:03:44
Speaker
I don't know. i mean, that's that's a great question. And, you know, I've worked at a couple different places. You know, I started out at Notre Dame and while I was at Notre Dame, there were four different athletic directors. Two of them were from the industry and two are from outside. So I don't think it's new, but I do think this overlap,
00:04:00
Speaker
with Steve, I think will be very helpful because we have we we run very high profile operations. i fail i don't I don't call them businesses because we have a lot of business principles and practices, but we're not a for-profit business. We're we're embedded in educational environment.
00:04:18
Speaker
The economic model is changing dramatically. The responsibilities for an athletic director are more significant than they've ever been. And so, you know, what's the skill set needed not only by the director of athletics, but by the entire staff that will allow you to be successful and allow you to fit into the academy? Because, you know, ah every president you talk to, you the students that are participating in sport need to be students.
00:04:42
Speaker
And we're going to compensate them in a different way. But we need to generate additional resources to make sure that we can be highly competitive in the ones that generate the revenue and maintain broad-based opportunities. So, you know, I think there's going to continue to be a mixed bag. I think some people are going to do that.
00:04:59
Speaker
But in this case, I feel like we've got the best of both worlds where we're bringing in somebody with new, fresh ideas from industry. But we have a lot of connectivity to the industry through myself and our staff that are already here.
00:05:12
Speaker
Makes a lot of sense. And you talk about new ideas.
The Need for Enforceable Rules in College Sports
00:05:16
Speaker
You and I have talked a lot in private and you've gone out in public and now talked about the fact that, you know, we need rules in college athletics. We need a ah system.
00:05:26
Speaker
Right. And we need rules that can be enforced and don't don't come with further litigation. Right. to To create stability. And the only real path in existing American law to do that is collective bargaining, right?
00:05:42
Speaker
Obviously, ah some miraculous, I'll call it at this point, congressional involvement could maybe change the outcome into another path, but without congressional involvement,
00:05:54
Speaker
um Collective bargaining is something you've talked about. Danny White's come out and talked about a lot of other ADs have now come out and talked about it. um You and I have been having those conversations for a while. Talk about why you decided to come out and publicly say, hey, listen, like,
00:06:10
Speaker
This is the the way that it's done at the pro level. And while we're not pro sports, like you just said, we're not just a traditional business. Student is a big part of the experience. um There are some athletes that go to schools like North Carolina that really need to be able to have a seat at the table so that the rules can be agreed to and protected and enforced.
00:06:30
Speaker
Talk about that. Yeah, you know, I'm i'm not a lawyer, um particularly not an employment lawyer, but what we've learned, or at least what I've learned in the last few years relative to our antitrust situation with the NCAA, I mean, the NCAA has been told twice in the last 40 years we're in violation of antitrust.
00:06:49
Speaker
ah In fact, first in 84 and now in 2021. And the only two ways you're not going to be in violation of antitrust is to either collectively bargain or get a federal exemption.
00:07:00
Speaker
I personally don't think the federal exemption is on the way. The SCORE Act that just, you know, was passed through the House the other day, I think may be a step in the right direction. um I've seen a lot of people that are now already against the SCORE Act. But, you know, I think there's a lot of really good things in that bill that would make some sense.
00:07:17
Speaker
So if that doesn't happen, I do think collective bargaining is a very good avenue for us to pursue. But you you understand the complexities of that. I mean, there are 500,000 student athletes in the NCAA.
00:07:32
Speaker
We have 28 teams. We have 800 student athletes, 100 of which play sports that generate more money than they spend. So how do you kind of tease out the differences between students that participate in sports that generate revenue How does Title IX fit into that equation?
00:07:50
Speaker
How do you get to a position where you can say, okay, this set of students we're gonna treat differently and allow them to collectively bargain because they generate a lot of revenue, but this group of students over here are gonna be treated differently.
00:08:03
Speaker
We're struggling with that as an industry. We're struggling with that as a nation, quite frankly, because we don't know, as I mentioned, we don't know where Title IX fits. We don't know where Title VII fits. And we've got to figure out how do we change the economic model and comply with state law or or federal law, rather.
00:08:21
Speaker
And so what I think the the biggest thing we need to find is what is a common space that has legal protection that we can get comfortable with.
Football's Revenue and Its Impact on Sports
00:08:30
Speaker
Well, there's this aspect of college athletics where When people talk about the total revenue, it's it's a high number, right? um And depending on what revenue streams you count, the NCAA report in 22 says 17 and a half billion dollars, right?
00:08:46
Speaker
um But we all know that the meat of that number comes from ah few college football programs. There's 1,100 schools. There's 40 different sports. There's all the things you just mentioned, 500,000 student athletes.
00:09:01
Speaker
But there's this small, small portion of athletes and schools in one sport, football, that produce a great amount of value from an entertainment standpoint.
00:09:12
Speaker
um And so, you know, it it just seems logical to think about them and those teams and athletes in a different way. And it it feels like if you start to think that way, you can start to figure out.
00:09:28
Speaker
how they have a seat at the table to agree to rules that can be protected and enforced, but also the rest of the student athletes, especially the non men's and women's basketball athletes who might also be in that revenue producing pool because of the March Madness deal, but everyone else you could argue has a really great situation right now, right? um With the scholarship they get, the benefits they get.
00:09:50
Speaker
um And so Isn't delineation kind of the first step so that we're not trying to think about this so holistically that we're thinking about it, not only just division one, two, three, but even trying to think about it, just all power conference schools, all sports is still too wide of a sample, isn't it?
00:10:07
Speaker
Yeah, I think you're right. And I think that becomes the challenge is how do you how do you break it down? And the employment lawyers that I've talked to said, you know, it's hard to differentiate if if you're required to be somewhere for an extended period of time, perform a certain kind of work.
00:10:22
Speaker
And, you know, these are the requirements to participate. That looks like an employee, not a student. So, you know, is there a way and you've been doing a tremendous job of trying to navigate this space?
00:10:34
Speaker
Is there a way for students to collectively bargain and remain students and not become employees because you have the, you know, you have all of the different laws by state, whether it's a right to work state or not, you have public schools and private schools, and you've done a really good job of trying to segregate those entities into smaller groups and say, okay, maybe this group should be allowed to collectively bargain.
00:10:59
Speaker
And then we'd have to change some NCAA rules that would allow to portion of the governance structure to to work differently than the rest of the governance structure.
00:11:09
Speaker
And I think that's what we're working on. And I think we're we're headed in the right direction, but i i think it's just going to take some time to get there. I think it's gonna take some time to get there too. if If we can agree that it ends up there to some respect, the question is how do we work from today to get through that gap?
00:11:27
Speaker
Because the longer it takes, the more is going to be unraveled. So Bubba, now we're in this situation with the house settlement where even if you make a lot of gross revenue by the definition in college sports, maybe that's two, $300 million dollars of gross revenue, no school's really operating with a high net profit margin, cashflow, EBITDA, whatever you wanna call it.
00:11:48
Speaker
Everybody spends and invests as much as they make into athletics. and And so institutions are gonna be asked to help more than ever when it comes to house settlement revenue sharing and other new costs, scholarships being increased, et cetera.
00:12:03
Speaker
And it's got everybody wondering, While that ask is being made to the institution and the federal government has changed its funding to most institutions, there's a squeeze and there's going to be things cut.
00:12:16
Speaker
Right. And is it is it salaries of of administrators and coaches? Right. Or is it sports? And there's a big fear around saving Olympic sports amidst this. And so the longer we wait to figure out bigger revenue opportunities with revenue producing sports like football, and the longer we wait to figure out collective bargaining, in my opinion, creates a period of time where there's a chance we're going to see more get unraveled, like we saw with the Pac-12 or at the school level.
00:12:46
Speaker
with sports being canceled. You surely hear about this all the time. Like what are your thoughts on the economics at the school level with the house settlement and how it could impact um other things like sports canceled being unraveled over the next few years until we figure this out?
00:13:02
Speaker
Yeah, I think you're right. You know, I think we started to see some of this during COVID when we looked like revenue was going to be at risk, which it was, you know a lot of schools started to drop sports. So when revenue gets tight, you're not going to drop the one or two that are most profitable or most visible.
00:13:18
Speaker
You're going to start dropping some of the other ones. And that is a big concern of mine. So as this economic model changes, I think is what we have to do is kind of revert back to what are our priorities and how are we going to fund them? Because if you look at the economic model on a college campus, you know, you've got business schools and law schools and some other entities on campus that generate a lot of money.
00:13:37
Speaker
And then you have some really small departments that don't generate much money at all. But what we've done at the universities is we've said, you know what, all of this is great for the educational mission. We're going to take some of the money and just move it around so we have a ah balanced educational mission.
00:13:51
Speaker
We've been doing that in college sports. We generate a lot of money in football and basketball. We've taken that money and spread it because of gender equity and for broad based programming and tried to create those opportunities for kids to go to college, get an education, get a scholarship.
00:14:05
Speaker
And we have to think about that as a university. Is that still important to us? If it is, we have to change the economic model because the courts are telling us. that if you generate money, you should get a portion of it.
00:14:17
Speaker
And that's what we're doing. The settlement is following that model to a T. The schools are starting to follow that model. But again, as I said before, we're still not sure where Title IX and Title VII fit or Title IX.
00:14:31
Speaker
it's It's going to be a question of does the economic value of your sport is that to be shared equally among all the participants or is it, can it go to the ones that are generating it?
00:14:42
Speaker
And I think that's an unanswered question. But to your point, the the other thing i I do, collective bargaining will allow us to create kind of a ah give and take with those that generate the money, but it doesn't necessarily help us fund the Olympic sports.
00:14:58
Speaker
So I think we have to kind of keep those, those are in my mind separate issues. So as we get moved toward collective bargaining, That won't be the um the um you know the solution to continuing to sponsor Olympic sports and women's sports and for that matter.
00:15:16
Speaker
Well, i would I would argue that...
Innovative Funding for Olympic Sports
00:15:19
Speaker
Danny White's plan, which was released a couple of weeks ago, the thinking along those lines of um separating football so that football can go out and get its own media deal to generate a bigger pie for everyone to share in um and making football players employees to collectively bargain under the current law protected by the National Labor Relations Act, which gives the protection to set rules and force rules, et cetera, um and giving other athletes the ability to see
00:15:49
Speaker
if if they were to become employees, where they would end up if they have to get paid what they're generating revenue off of and maybe have to pay expenses like tuition and such. and And his theory is most athletes will not want to be employees unless they play football, where they're not positive.
00:16:06
Speaker
Right. um the The point I'm trying to get to is I think if we help football help the revenue generating sports, basketball and and women's basketball could be included because of the fact that they have the March Madness deal that they're a part of.
00:16:19
Speaker
But if you help these sports collectively bargain and create structure, you're going to eliminate an annual tax of lawsuits. You're going to create structure and rules. But also there's a bigger pie to go get from a media standpoint in the future.
00:16:34
Speaker
Might not be today, but in the future. um What do you think about that theory? I agree with the theory 100 percent. The aggregation of television rights would certainly generate more money for football.
00:16:47
Speaker
And that money could be used to support um the Olympic movement and women's sports. My only position was the given the current status.
00:16:59
Speaker
Getting to collective a bargaining, if you don't do that, won't solve the other two issues. The only way you solve this is exactly what you laid out is aggregate all the rights, generate more money so you can pay players and support the other teams.
00:17:13
Speaker
or you're going to have to have institutional support for the Olympic sports. And keep in mind, and you mentioned it early, there's very few departments across the country that are cashflow positive now because we're offering an awful lot of opportunities that don't have any self-funding mechanism. So,
00:17:29
Speaker
it's ah It's a question of if we're going to move the money to from those that are being subsidized, which would be considered your fencing, track, swimming, sports like that, and we're going to move that money to the footballs and basketballs, how are we going to fund those other sports? Is there going to be an institutional subsidy to do that?
00:17:45
Speaker
And some schools are going to do it. And I'm really hopeful that there'll be a lot more that do it than don't do it. And I think there's also a reality for some of the the doomsday folks about Olympic sports. I would say um this is really a power conference issue because, you know, the non-power conference schools are not going to fund $20 million dollars of revenue sharing for all their football players and basketball players.
00:18:09
Speaker
and then have to find a way to support their Olympic sports. They're really in a very similar position um that they've been in for a while. It's the power conference schools that really are at, have the biggest threat of maybe canceling some sports. You agree with that?
00:18:25
Speaker
Yeah, I do and I don't. I mean, that's where there's a lot of financial pressure there, but there's also pressure to to remain at the highest level. So one, there's 136 schools that play bowl subdivision football.
00:18:39
Speaker
And so everyone wants to stay in that club. You don't want to be not in the elite football programs and you want to have access to postseason. Then you have another 360 or not another, but you've got 360 total schools in Division I. And that number creeps up each and every year because people want to be eligible for the basketball tournament.
00:18:59
Speaker
So you are you're you're trying to manage multiple things at the same time. Football the economic driver. People want to be eligible for the playoff. And then you've got a larger group that wants to be eligible for the basketball tournament.
00:19:13
Speaker
And so you you have to at least stay in the game and offer the minimum sport requirements and scholarship requirements to to be at that level. And that's expensive for an awful lot of schools. But yeah tough decisions are going to have to be made.
00:19:26
Speaker
It's good point.
NIL Deals and Legal Challenges
00:19:27
Speaker
Okay, let's get into the house settlement. So you talked about it. The house settlement is a step towards sharing um the the revenue with those who are helping produce it. um There are are holes that they have been exposed. um you know First off, you have a cap that was not collectively bargained.
00:19:45
Speaker
um which which has has some exposure there. um You then have a ah commission who is is trying to oversee cap circumvention. And we've seen cap circumvention tools work at the pro level with collectively bargain deals.
00:20:01
Speaker
WNBA, i I use this example all the time, but I'll use it again. Las Vegas Aces, average salary is around $80,000 year per player in the City of Las Vegas did a deal with all of the players in the Las Vegas Aces to promote the city.
00:20:15
Speaker
And it was $100,000 per player, which is actually more than their entire salary on average. And it got stopped, right? Because it would have created an unfair advantage for the Las Vegas Aces as a WNBA franchise. So we've seen these tools work and there's other examples at the pro level.
00:20:31
Speaker
um But the difference is Brian Sealy comes from MLB, where he's chief investigative officer. They have collectively bargained rules. He has a leg to stand on when he's and investigating and trying to enforce something.
00:20:43
Speaker
In college, lot different right now because the cap wasn't collectively bargained and none of the rules are collectively bargained. And so um there's there's real holes in stopping collective deals that try to circumvent the $20 million dollars cap.
00:20:58
Speaker
And there's questions on whether all athletes will even upload their transactions to the NIL GO system that the College Sports Commission is overseeing. And then for those that are getting uploaded, we're seeing them get rejected if they come from collectives.
00:21:10
Speaker
And there's a lot of talk around what arbitration is going to look like for that, especially because we're still calling the deals between the schools and the athletes, the rev share deals that come from the $20 million dollars cap. We're calling those and NIL deals.
00:21:24
Speaker
So now an athlete has an NIL deal from the school. That's okay. But they have an n NIL deal from the collective that looks similar, similar amount of money, similar deliverables. That's not okay. And so there's, there's some real issues that I see. I've just laid them out for you.
00:21:38
Speaker
I'd like to hear what you think about the current system and how it can really be upheld and how you can stop schools from really spending 40 or 50 million on talent.
00:21:50
Speaker
Yeah. i I don't know the answers to some of the questions you had embedded in there, but I think you're, you're, your description is is very, very accurate. um One thing is the settlement, while nothing has been collectively bargained going forward,
00:22:06
Speaker
The settlement has been settled between the plaintiff's attorneys who represented the previous student athletes that weren't a available that didn't have the ability to monetize their NIL and the Power Five conferences.
00:22:20
Speaker
So the settlement has been, quote unquote, negotiated because it was a settlement. It does have court backing because it's now been approved by the courts. The CSC is an oversight committee that has been agreed to by the conferences and the plaintiff's attorneys, that it's going to be an enforcement agency to enforce the settlement.
00:22:44
Speaker
The things that you brought up may or may not be part of the settlement. And I do think we have to work through where those gaps are and where the overlap is, because things like recruiting and extra benefits and things of that nature are still part of the NCAA lexicon and part of the rules that we have to live by.
00:23:03
Speaker
But the settlement doesn't address those. And so I do think we're in ah in a in a new space of different concerns than we had before.
Legal Protections in College Athletics
00:23:12
Speaker
six weeks ago. You know, we're 14, 15 days into trying to articulate, okay, here's what the settlement says, and here's what we're attempting to do.
00:23:21
Speaker
And obviously, you just saw yesterday where the collectors were pushing back. You see where the that players associations are pushing back. And so it's going to take some time to sort it out. um But until we get legal protection, and whether we get it through collective bargaining or federal statute, we're going to have really bumpy seas until we get one of those two things or both of those accomplished.
00:23:44
Speaker
Earlier, we both kind of said it, the odds are collective bargaining is the route. The odds of federal help on this is is low, are low. um So the next question I have is the decision makers in college athletics are the presidents.
00:24:01
Speaker
And of course, the commissioners are are right there with them. They work for the presidents. And there have been very few presidents open to talking about collective bargaining.
00:24:13
Speaker
You said earlier, it's very complex. I believe it can be figured out. I live in it every day. i We've written a bill, a discussion bill for DC. that has collective bargaining for non-employee athletes because we wanna create a compromise.
00:24:28
Speaker
We think that's one that gives the Republicans in schools the non-employment status that that you want, but it also gives the athletes and Democrats the collective bargaining rights that they want. um And it's fallen on mostly deaf ears because it's in the center. So both parties have a problem with it.
00:24:45
Speaker
um And you know there's been very little adoption or engagement from presidents who we've put it in front of. um When you talk about concepts with collective bargaining, the presidents, especially in states that are right to work states, who work for governors, who are not necessarily pro-union, um it's a touchy topic.
00:25:06
Speaker
But you and I have talked about the fact that It would not be the players at a school collectively bargaining with the school or the state institution. They would have to bargain with a central entity.
00:25:16
Speaker
Maybe it's the College Sports Commission. Maybe it's a new entity started by several conferences. Maybe it's the CFP. Those are the kind of things that I think we could figure out if the presidents and commissioners were more engaged in a conversation around this.
00:25:29
Speaker
um how do you How do you get the the presidents to at least ah understand things like that topic of the athletes wouldn't be negotiating with their school, they'd be negotiating with a central entity and other types of things that have to do with collective bargaining? Do you think that's a frontier that we we could get to as the the problems increase?
00:25:50
Speaker
Yeah, I do. and And I think we're on our way. I mean, you know, everyone wants to have an immediate answer. And I know that, you know, people get frustrated and say, all right, hey, we know we're going to collect a bargain. Let's just do it right now. But I do think you have to kind of bring people along. You know, I didn't think two years ago that we'd have much chance of getting any kind of bill through Congress. Well, it's not through, but we've had one that's been introduced. Now it's getting shot at from all different sides.
00:26:14
Speaker
The idea that, you know, politics are local. So we've got Congress now at least talking about it. you've got a few Democrats, a few Republicans that are starting to work together. The next layer of that's going to be at the state level, like you just mentioned. You know, I'm in a state school. There's a lot of state schools out there that have ah governors and have attorney generals that feel differently about the NCAA and the national governing body.
00:26:35
Speaker
We've got to bring all those people along. It's incumbent upon all of us in the industry to really examine it just the way you have. And you've been leading this, which I commend you for, is what is the best way to economically support intercollegiate athletics today?
00:26:49
Speaker
And that is the broad group of the national governing body. the smaller group of a conference, and then all the way down to a school and the individual students. And it it all changes depending on the perspective that you have. But I think what you've done has been a great path that we can follow and say, is this the right one to be on? And how do we do that? Can we put football in the ACC and have the ACC collectively bargain with somebody that could pay them directly? That wouldn't come through the school, but it wouldn't jeopardize their...
00:27:22
Speaker
and Maybe they would. Maybe the employees, maybe they're not. And I prefer that there wouldn't be. But if they're an employee of the conference instead of the school and have the right to collectively bargain, you know, maybe that is a solution that's going to be the one that carries the day. But I think there's a lot of education that goes beyond what we're talking about today.
Urgency in Addressing College Sports Challenges
00:27:40
Speaker
And the other thing I've talked about with people here is we're saying, hey, things are really problematic. Our stadiums are full. Media rights are good. Kids are having a great experience. To the common person are saying, what's wrong?
00:27:52
Speaker
You guys are talking a lot about something that people really like. There's a great benefit to the students. They're having a good experience. What are you trying to fix? I think what we're trying to do is get out of court.
00:28:05
Speaker
Well, i think I think this really has to do with, and and and I get it, I am an impatient, urgent entrepreneur. like That's how I think. I'm always trying to get to what's in the future in my head.
00:28:19
Speaker
It's how I'm wired, how I've been for my entire 20-year career. And I've had to learn a lot in this industry. um And I've had to learn patience and I've had to learn how to be calculated and tactful.
00:28:32
Speaker
um But I think where where my urgency is here is not just for the athletes. I mean, that's who I'm thinking about first and foremost, but also for the schools.
00:28:44
Speaker
There's a cost of doing nothing. There's a real cost of doing nothing. Let me give you some examples. If Congress doesn't do anything, which I still think is very low odds, I disagree. It's okay. We can agree to disagree on things. I don't think the SCORE Act is a great act. I think it unravels a lot of what's happened with NIL.
00:29:03
Speaker
And I think that it gives an ah unfair amount of antitrust protection to the NCAA. But regardless of that, I don't think you're going to get seven Democrats in the Senate to support that.
00:29:14
Speaker
I think Booker and Blumenthal have a lot of control of that party with this issue. And so, yeah, it might get through the House, but it's not going to get through the Senate. And so when it doesn't get through the Senate, there's a reality here.
00:29:26
Speaker
And that is we're now doing deals between the school and the athlete to the tune of 20 million a year. We're calling them NIL deals. They're all papered up. There's already an accusation in the Johnson case that the athletes are treated like employees. This is only going to increase that argument in that case. And one cost of doing nothing is in the next few years, the Fair Labor Standards Act applies that athletes are all employees in college.
00:29:51
Speaker
Overtime, payroll taxes, minimum wage. You know the story. That's another eight figures a year that schools are paying out, right? While we get there, if we do nothing, talked about sports being canceled.
00:30:03
Speaker
talked about how coaches, you know, take advantage of the system and push athletes into the portal. There there's all kinds of things that will happen if we don't do anything. And that's where I'm coming from.
00:30:14
Speaker
But I also understand exactly what, what you just said, which is we can't get there tomorrow. There are things that have to happen to get there. I just feel like if more folks like you would be willing to just have conversations and you've been great since the day I launched AO, you've always been open to a conversation.
00:30:31
Speaker
If more folks, especially at the presidential level and the commissioner level would be open to that, I think we could figure out these things a lot faster.
Value of External Perspectives in Sports Management
00:30:40
Speaker
Yeah. You know, kind of circling back to the very beginning of our conversation.
00:30:44
Speaker
That's why I think some outside voices into intercollegiate athletics can be very helpful because those voices can be heard. It's a whole different perspective and a whole different way of looking at it. Those of us that grew up at the in the academy per se,
00:30:57
Speaker
Maybe we don't have a wide enough lens to take a real objective look at what's going on. So I think, you know, a guy like Steve Newmark could be very good in that space. And I think we have an opportunity to really take a hard look at it.
00:31:10
Speaker
But I also think that, you know, what we've done over the last few years is we've totally engaged every form of government. We have our state government engaged because all kinds of legislation is being passed on a local level.
00:31:22
Speaker
We've got the legislative branch at the federal level. We've got the judicial branch at the federal level. We've got the executive branch at the federal level. So we do have people's attention. So to your point, now at least we've got the conversation started.
00:31:35
Speaker
Let's move it to a direction that's going to resolve the problem or resolve the issues that we have right now of making sure that we... take care of the ones that are generating revenue and maintaining the sports that need to be subsidized and figure out how to do that.
00:31:50
Speaker
So these opportunities are maintained. The Olympic movement works. And we continue to support all the incredible things that have happened through Title IX. Because over 50% of our participants now are women or just less than 50% are women.
00:32:03
Speaker
That just doesn't happen at the pro level. So the fear is that if we go down this pro model, which is collective bargaining, that it's going to look like the pro leagues. And I think that's, you know, that's, that's the side that we have to continue to stress won't happen.