Northwestern University wins landmark ruling

[Landshark]

The National Labor Relations Board has ruled that Northwestern football players ate recognized as employees.  This means they can unionize and collectively bargain for how the program is run.  This is something that can change the entire landscape of college football

[Fau Teixeira]

the school is expected to appeal this ruling to the NRLB full board in DC.

I'm not a huge pro-union guy. but i think that the college players have a point here. they are paid, their continued payment is dependent on their continued employment. they are precluded from being otherwise compensated.

high school atheletes .. not employees.
college atheletes not on scholarships .. not employees.
college atheletes on sport scholarships .. 100% employees.

of course .. the schools would just stop offering sport scholarships .. and just go with academic or need based reach around type deals to get the players they want. so i'm not sure what the practical application of unionizing is .. unless of course the players decide to strike and the ncaa stands to lose millions in tv dollars .. i guess that's a possibility.

[Phishfan]

I'm not sure what their end game is here but I don't see anything good coming out of this as it stands.

[Landshark]

Here's my take on the whole situation: 

1. The ruling, if upheld, only applies to private institutions because the NLRA only applies to private employers.  For public institutions, it would be a state by state determination, and given the differences from state to state in terms of labor issues, you would  wind up with some states classifying athletes as employees and some states not doing so.  For example, Florida ( which is a right to work state with no unions) would not allow its college athletes to unionize while all the athletes in California (which allows unions) could do so.  Basically, this would be an impossible system to allow college sports to continue. 

2. The tax issues have a huge impact and I don't know where to begin.  As of now, no taxes are paid by universities related to benefits provided student athletes.  That would go away, because this is compensation for employees, which means it is taxable.  Athletic departments would also lose their tax exempt status, meaning that any revenue earned would be taxed AND meaning that alumni/booster donations would be taxed as well.  The money that boosters pay to the program to get better season tickets now becomes taxable revenue for the school AND it is no longer a tax deduction for the booster because they aren't donating to a tax-exempt organization.  Imagine what that could do to the amounts collected from alumni/season ticket holders?  All these huge donations, like Stephen Ross to Michigan would just go away.  Bowl games/organizations are also tax exempt, and that would go away as well.   Consider the number of athletic departments that break even and struggle to end the year with any left over revenue.  Now they have Uncle Sam taking a big bite out that revenue.  Additionally, if you are an employee, and you are receiving an economic benefit from your employer, you have to pay taxes on that benefit received.  Therefore, the value of an athlete's scholarship could be taxed as well.

The only way unionization isn't a death blow to college athletics is if instead this is simply an impetus to getting changes to the system and we end up with no unions, but a re-designed system, including things like full cost of attendance, additional health benefits, etc. 

Realize, that even a change that provides some portion of revenue to the players related to names/likenesses could possibly have huge tax ramifications.  The article below explains it all.

http://thefederalist.com/2014/02/03/dont-expect-college-athletes-to-unionize-any-time-soon/

[Phishfan]

For example, Florida ( which is a right to work state with no unions)

Where do you come up with your facts? Florida has tons of unions. You would think a professor would be familiar with the NEA.

[Landshark]

Where do you come up with your facts? Florida has tons of unions. You would think a professor would be familiar with the NEA.

National union.  Not a local one.   And Florida is still a right to work state

[Phishfan]

And Florida is still a right to work state

Which I'm not sure you grasp the concept of. That means employees are free to join a union or not join a union if they wish. It does nothing about abolishing unions.

[masterfins]

2. The tax issues have a huge impact and I don't know where to begin.  As of now, no taxes are paid by universities related to benefits provided student athletes.  That would go away, because this is compensation for employees, which means it is taxable.  Athletic departments would also lose their tax exempt status, meaning that any revenue earned would be taxed AND meaning that alumni/booster donations would be taxed as well.  The money that boosters pay to the program to get better season tickets now becomes taxable revenue for the school AND it is no longer a tax deduction for the booster because they aren't donating to a tax-exempt organization.  Imagine what that could do to the amounts collected from alumni/season ticket holders?  All these huge donations, like Stephen Ross to Michigan would just go away.  Bowl games/organizations are also tax exempt, and that would go away as well.   Consider the number of athletic departments that break even and struggle to end the year with any left over revenue.  Now they have Uncle Sam taking a big bite out that revenue.  Additionally, if you are an employee, and you are receiving an economic benefit from your employer, you have to pay taxes on that benefit received.  Therefore, the value of an athlete's scholarship could be taxed as well.

Your Tax "analysis" has so many incorrect "facts" and assumptions that I don't have the time to point them all out.  Most tax exempt organizations have paid employees, making the athletes paid employees does not change anything.  Also, tax exempt organizations already pay tax on unrelated business income, so these university's do pay some taxes if an activity is deemed unrelated to their exempt purpose.

[masterfins]

This will probably be appealed all the way to the Supreme Court.  It could open the door to so many questions/problems:

If an athlete is "paid" then he can't play per NCAA rules.
If they are going to allow players to be paid, then will players go to the school offering the most money?
If the NCAA puts a cap on wages, then aren't they breaking the law by doing that?
Won't small schools be pushed out because they can't afford to pay?

The NCAA should have addressed some of these issues long ago, but they are greedy pigs; that need to be slaughtered.

[MyGodWearsAHoodie]

That is just the tip of the iceberg....

If they are employees than they fall under FMLA.  They aren't in any of the exempt categories so they must be paid hourly. 

I don't see this ruling surviving an actual court review.  NBLR is not an actual court it is an agency that advocates for unions. 

[Landshark]

That is just the tip of the iceberg....

If they are employees than they fall under FMLA.  They aren't in any of the exempt categories so they must be paid hourly. 

I don't see this ruling surviving an actual court review.  NBLR is not an actual court it is an agency that advocates for unions. 

I agree.  It's too big of a Pandora's Box to open. 

[Landshark]

Your Tax "analysis" has so many incorrect "facts" and assumptions that I don't have the time to point them all out.  Most tax exempt organizations have paid employees, making the athletes paid employees does not change anything.  Also, tax exempt organizations already pay tax on unrelated business income, so these university's do pay some taxes if an activity is deemed unrelated to their exempt purpose.

It still could be difficult to maintain their tax exempt status if they are viewed as a business because of this ruling.   Additionally, the players are now employees so the value of their scholarships could be considered taxable income

[Spider-Dan]

The title of this thread is wrong.

Northwestern (and the NCAA) LOST this ruling.  The players won.