Leave chaos to the professionals.

Both sides have filed briefs in the NLRB hearing about certifying Northwestern’s football players as a union.  There are several interesting assertions made by each, but a couple in particular are worth pointing out, considering some of the arguments I’ve read from you in comments on the subject.

One is about player compensation.  Many of you believe that an athletic scholarship represents the way a student-athlete is compensated for providing his or her services.  It may surprise you to learn that the school disagrees with you.

Although CAPA claims that a full-ride scholarship — worth $61,063 at Northwestern — is compensation, the university claims otherwise. From the brief:

Athletic scholarships are purely that—scholarships—and as such they are not treated as compensation for purposes of income taxes or withholdings… Student-athletes at Northwestern do not pay taxes on the athletic grant-in-aid… In addition, student-athletes at the University do not receive W-2’s for the athletic grant-in-aid.

Athletes also receive a stipend for food and living expenses when they move off-campus, but there are no tax deductions or withholdings from that money, either. CAPA argued that because some of the stipend money is deducted for mandatory meals, that means the university gets to decide what the players do with their money. However, Northwestern said that the money deducted for those meals is part of the “board” covered in the scholarship. The university also said athletes don’t receive benefit plans that other Northwestern employees receive.

Now some of this is obviously legal hairsplitting.  But it’s also the kind of thing that comes back to bite you in the ass if the players prevail and at some point demand payment.

And how about this admission from Northwestern?

Northwestern contends that a “hypothetical free market does not and cannot exist in college sports under the current NCAA framework. Instead, chaos would exist under a regime where some football teams are unionized and some are not.”

At least it’s honest about that.  But it’s hard to understand how a free market is okay for schools negotiating TV contracts, no problem for conferences raiding other conferences for new members, fine for coaches and administrators negotiating employment contracts, but not so for student-athletes facing increasing demands on their time from their athletic programs as well as the risk of physical injury.

I guess chaos is in the eye of the beholder.

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15 Comments

Filed under Look For The Union Label

15 responses to “Leave chaos to the professionals.

  1. Always Someone Else's Fault

    Everything wrong with pro sports: half of it’s already here, and the other half is on its way. Yippee.

  2. Hogbody Spradlin

    This stuff makes more sense when I think of the players, like all labor, as a capital asset. Not implying anything political, just looking at it a certain way.

  3. Go Dawgs!

    Hopefully, Northwestern’s players are only depositing those stipend checks once!

  4. Gravidy

    So… $61K annually plus stipends don’t constitute compensation, huh? Riiiiight. Once again, we see that what a litigant believes, what a litigant argues in court, and the truth are almost always two or three different things.

    • Mayor of Dawgtown

      There is a tax problem in the middle of this. If the scholarship is “compensation” then it is likely “gain” under the tax code and the athletes will have to pay taxes on it–without having actually received any actual money. How can they pay it if they have no money. Will there be withholding? If so, who pays the withholding?

      • Gravidy

        Yes, I have an understanding of some of the reasons why the school argued as it did, and I’m not saying the scholarship or the stipend should be taxable. I’m just saying in good ol’ common sense terms that those things do count as “compensation” in my mind – and I dare say it would in the minds of most people.

        I don’t know why, but your comment reminded me of the fact that Olympic medals are considered taxable by our wonderful federal government. That is another one of the countless examples where I think common sense and the law are at odds.

    • M.

      You hit the nail on the head in your last sentence. Just like the Obamacare penalty for not getting health insurance – it’s not a tax, but a penalty to get it passed…until they need it to be a tax in court, then it’s a tax, not a penalty.

      • Gravidy

        As I recall, the solicitor general argued fervently that is was a tax and that it wasn’t a tax on consecutive days before the Supreme Court. And people wonder why I’m cynical about such things.

  5. Hogbody Spradlin

    Under the tax code, scholarships are included in the general definition of gross income. Another code section, which controls their taxability, says that scholarships are excludible from gross income. Thus it’s ambiguous whether they are ‘compensation’ for tax purposes. And, tax law status isn’t necessary conclusive on the issue.

    There are a lot of slippery slopes that come to mind here. Consider this: if there’s a ruling that athletic scholarships are compensation and recipients have collective bargaining and/or negotiation rights, how does that affect merit and financial need scholarships?

    • Russ

      True DAT. I got a stipend in grad school. The first year I didn’t pay taxes. The second year I was told I should pay taxes. This was by the school. The rules weren’t clear back then and still aren’t, apparently.

  6. DawgPhan

    I always love a good free market argument….because typically the way it works is that if I am the one getting something I should be able to apply free market and get what I can, when it is me that is doing the giving there should be some rules about how much you can get.

    Free Market!