Despite my love of sports, they are not perfect, and this proposition can certainly be applied to the National Collegiate Athletic Association, or NCAA for short. Throughout its past, this organization has helped gifted student-athletes achieve their dreams of playing at an advanced level as well as grasping education aspirations.
With that being said, in the past, they also quite literally printed money off the backs of these athletes without compensating them even one percent of the revenue. This questionable business practice has been curbed through NIL legislation, which allows students to profit off of their name and likeness but also be compensated directly through the university.
However, there is a problem with this system, that being the Transfer Portal. Now, I have no problem with athletes leaving universities for new ones, it’s their right to do so, for any reason. However, for teams, this leaves them with the hard task of replacing their talent and production.
Now, some universities are better than others at replacing athletes who transfer out, as they simply have an uncanny ability to find talent, almost mirroring that of the Moneyball-era Oakland Athletics of Major League Baseball.
However, this practice is not practical from a team operations aspect and a business one. Now, I’m aware that the business world isn’t one of fair exchanges; if that were the case, our world would be one of fantasy. Scottish economist and philosopher Adam Smith once said in his book, Wealth of Nations, written in 1776: “Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.”
Nevertheless, one team getting a player and the other getting nothing in return is beyond that.
The Transfer Portal needs retooling
For those who are not aware of European football and the way business is done there and throughout much of the world, the way that business is done in Europe is through a concept called transfers. In a transfer, one team acquires a player, for a set fee, (and/or a player) ranging from anywhere between €10,000 to as much as €222 million. (The latter being the transfer of Brazilian forward Neymar to French Ligue One club Paris Saint-Germain in 2017) Some may see this as simply buying property, but that’s a flawed assumption. These players make more than most in the world do and are given the highest levels of treatment, both physically and mentally, for the benefit of both the player and the club. Yes, they are assets to the club, but without the players, clubs would have no business model and would cease to exist. Therefore, it’s a business of compromises between clubs and players.
You might ask, why did I just explain the business world of European football, which has very little in common with collegiate athletics in the United States? Well, it’s because I think a system similar to the football transfer market could be the way to compensate universities for letting players leave for new universities.
What I propose is a system where athletes and universities sign an employment agreement, much like any employer and employee would. This system guarantees a contractual exchange between both the respective players and universities, which will allow both parties to be transparent about what they stand to gain from the transaction.
This proposed system would be open from May to July in any given calendar year, where student athletes can sign with any school they see fit. In this system, players can sign a contract for x amount of years, and they can earn a base salary based on their year at the university. For example, freshmen, sophomores, juniors and seniors can make $75,000, $100,000, $125,000 and $150,000 as a base salary, with endorsements and external NIL deals having no impact on this number.
Of course, these large numbers are only realistic in the Power Four conferences of college athletics. (SEC, Big Ten, ACC and Big 12 conferences) The smaller conferences, like our Ohio Valley Conference, can set smaller limits that are more realistic with their respective revenues.
In regards to player movement, if a player wants to hit the transfer portal, they will be dropped down a salary tier if they leave for a new school. Additionally, the new school would have to pay a fee corresponding to the year of the player.
To put that into a hypothetical, if a sophomore at Duke wanted to transfer to LSU, LSU would have to pay a fee of $100,000 to Duke, no questions asked, while the player would be capped at making $75,000 for that year. This transaction would compensate for the team losing a player, while the new player would be able to transfer to a new team for better opportunities at the cost of losing potential salary. One could say that this system would just lead to the biggest universities having the best players.
To that, I say, “Is the current system any different? At least with my proposed system, athletic programs are compensated for developing talent and can re-invest the funds into all aspects of the program.”
CBA on the horizon
Now, I would be naive to say that the NCAA would certainly adopt a system this drastic. However, measures need to be taken to regulate this system of exchange.
One that is a definite necessity is a CBA or Collective Bargaining Agreement between the players and the organizations for which they play. In this agreement lies the terms and conditions of employment that both parties agree to, including minimum salaries, revenue sharing, salary caps, transfer portal regulations, television contracts and hundreds of other legal doctrines that must be hammered out.
In addition, the student athletes would need a union, along with attorneys for proper legal representation. College athletics would become a professional sports league similar in size to the NFL and NBA.
All of this will happen; it’s just a matter of time. Especially with NIL disputes becoming more and more common, one of which being in the case of Matthew Sluka, red-shirt senior quarterback at James Madison University.
Last season, while at the University of Nevada-Las Vegas, Sluka entered the transfer portal after only three games due to an NIL dispute. Sluka alleged that one of the team’s assistant coaches promised him $100,000 in NIL funds to transfer from the College of Holy Cross, which he did not receive.
More about his story can be found here. Until a formal business agreement can be reached between collegiate athletes and the institutions that they play for, there will be a distinct sense of leeriness present with both parties.