Tuesday, October 8, 2024 - The impact of college athletics is felt throughout institutions, but too often sports are considered separate from the rest of higher ed. On this episode, Michael and Jeff connect the dots between recent changes to college athletics and the campus-wide ripple effects they could have. They are joined by Matt Brown, author of the college sports newsletter, Extra Points, to chat NIL (Name, Image, Likeness), the transfer portal, and the implications of the student-athlete employment case. This episode is made with support from the Gates Foundation and Ascendium Education Group.
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Extra Points Newsletter by Matt Brown
Matt Brown:
I'm from Ohio and based in Chicago. I'm a Great Lakes guy. We have dozens and dozens of institutions in my part of the country that are tuition dependent, enrollment, declining schools where the health of their athletic department is structurally important to their university because that baseball team is 34 tuition paying dudes that they might not have before. So I would say how college sports intersects and is involved in that financial and structural health of a university, it's going to depend a lot on the kind of school. Carnegie Mellon and Pitt and Point and Point park all are gonna have very different problems and have different relationships with our leg departments, but it does matter.
Jeff Selingo:
That was Matt Brown who runs Extra Points, starting to drop the names of every college in America. I just love his knowledge of the college part of sports as we talk to him about the ever spinning news cycle right now around intercollegiate athletics and what it means not only for the future of your Saturday football habit, but also Team USA and the Olympics Future of higher ed in general on this episode of Future U.
Sponsor:
This episode of Future U is sponsored by the Bill and Melinda Gates foundation, working to eliminate race, ethnicity, and income as predictors of student educational success. This episode of Future U is sponsored by Ascendium Education Group, a nonprofit organization committed to helping learners from low income backgrounds reach their education and career goals. For more information, visit ascendiumphilanthropy.org or subscribe to Future U wherever you get your podcasts, and if you enjoy the show, send it along to a friend so others can discover the conversations we're having about higher education.
Michael Horn:
I'm Michael Horn.
Jeff Selingo:
And I'm Jeff Selingo.
Michael Horn:
Today, Matt Brown is a return guest to Future U. Jeff, I think the last time we had him on, which was two falls ago, it was with Victoria Jackson, of course, of Arizona State University. And we were talking about the state of college athletics. And it was so fascinating that it ended up being a two part episode. And even then there was more to talk about, but just shows how rich this topic actually is. And I think, frankly, we thought, okay, that's all we're going to have to say about college athletics for a little while but...
Jeff Selingo:
Yeah, and if you remember, Michael, after those two episodes aired, the association of governing boards for colleges and universities, AGB, they asked us if they could essentially run big chunks of the transcript of the shows in their magazine, trusteeship. And maybe that should have been a clue to us that a lot of people just, you know, for a lot of people, that this is just an important topic about college athletics and has really moved from just being something on ESPN and tailgates to really becoming the mainstream of what's being talked about in college boardrooms.
Michael Horn:
Yeah, and that's what we want to talk today with Matt about, because what's facing college athletics right now is really a maelstrom of a bunch of things coming together. First, a big antitrust settlement that will require a big, and I mean big payout to a growing market of NIL collectives, which, as we'll explain, are essentially unregulated money in college athletics, leading to bigger questions. And three, that's the big question. The real potential that college athletes are going to get classified as employees. All these things have big risks for higher ed institutions because they will cost a lot of money, they will have legal ramifications. But all of it, Jeff, at a time when most higher ed institutions, frankly, they don't have a lot of that money.
Jeff Selingo:
Yeah. Michael. And will impact something, you know, athletics that has been referred to as the front porch of colleges. In other words, it's how people know higher education. And you can't just simply knock it down. Right. You can't simply knock down your front porch and still have people enter it. So it's a critical part of higher education.And we asked Matt to come back to talk about this because he plays in both worlds of higher Ed, um, uh, you know, within institutions as well as higher ed when it comes to athletics. He kind of understands both the institutional mission of higher education, but also the athletic side of this as well. He runs Extra Points, which is an email newsletter focusing on the off field issues that, that shape college athletics. It's really the place to learn more about the intersection of higher education policy, history, politics, and college sports in general. And Matt, welcome to the show again.
Matt Brown:
Thanks so much for having me, guys. It's a pleasure.
Jeff Selingo:
Yeah. So, Matt, I'm going to admit that Michael and I love this stuff, but when we asked our listeners this summer in a survey what they wanted to hear more about, college athletics kind of ranked dead last. Well, it actually did rank dead last. And I think that's unfortunate because all of these changes going on in college athletics equal one thing. And that's a huge price tag for colleges and universities. And then maybe, by the way, donors and fans by extension, and that's one thing, money, that most universities don't have a lot of right now. So with that, to set the framework for our conversation today, can you give us a big picture view here before we dive into more specifics? Why should even the non sports fan, maybe somebody who's on the faculty at a college? Or maybe they work in the bursar's office. I must admit, I just wanted to say the word bursar on Future U. Or maybe there are tuition paying parents. Why should they care about what's going on right now in college athletics?
Matt Brown:
Sure. I mean, it's no pressure, right? Whenever you get brought onto a show, like, just so you know, most of our audience legitimately doesn't want to know so justify your existence here, please. No, but this is a fair question, and this comes up in my. In my line of work, too. And what I would tell people is there are, I think, some. Some misconceptions about how college athletics actually works across all universities, because so much of the popular conversation right now about employment status and about conference realignment and about structural funding changes centers around institutions like Ohio State or Alabama or Florida. These are R1 state flagship, Big Ten, SEC kind of institutions, where we think of their athletics programs as generally being more self sufficient. They have different problems. And if we want to talk about what this means for the. For the R1 flagships or the Ivy leagues or those folks, that's great. But as you both know, that's not the majority of institutions. For every Ohio state, there's a hundred more Cleveland States or John Carrolls or even in Oberlin. And many of these institutions care very deeply about athletics, not because they're trying to sell tickets, necessarily, or tried to maximize their earned revenue from this. They care about athletics because this is a critical enrollment strategy. It is a critical student recruitment strategy. It is critical for the universities that might struggle to achieve a certain level of diversity through their traditional recruiting, student recruiting methods, and also a way that they interface with their donors, that interface with their state House, and how they reach out to their community at large. I think about this a lot in my neck of the woods, and it might not matter the way that the faculty union thinks that it might matter depending on your institution. And that's a big part of what I do every day, is trying to dig into and explain those things.
Jeff Selingo:
I'm glad you brought up enrollment, because I think it is an important piece that most people don't think about. I also love all the name dropping. I'm on the Big Ten and my home state of Pennsylvania, so this is.
Matt Brown:
My only party trick. Right? Like, I'll try to pull out whatever division three institutions are within a. A 50 miles radius radius of where you are.
Jeff Selingo:
Yeah, we're going to start naming cities later on and see if you can name a Point Park somewhere else.
Matt Brown:
I'll do my best.
Jeff Selingo:
But. But there are a lot of issues we do want to dive into today. You know, the House versus NCAA antitrust case, NIL and NIL collectives, the advent of the GM in college athletics, which is just kind of a surprising trend for me. The transfer portal, conference realignment. Again. Again. And just the future of college athletics overall. It's just shocking to me how many issues there are. No wonder you write an entire newsletter about this industry. So let's start with the NCAA trying to settle the House case. I don't want to really get into the weeds of this case and all the other antitrust cases against the NCAA and all those particulars, but they really center around NIL. And for our listeners, that's name, image and likeness. We're going to be using those letters a lot in this show. And the so called NIL collectives. Now, these collectives emerged after the NCAA allowed student athletes to get compensated for their name, likeness and image. Can you briefly explain, and in terms, I think, again, for our lay audience, these collectives, you know, kind of how they work, who runs them, and what is the real issue with them?
Matt Brown:
Yeah, so we'll zoom out here for a second, because I think, unfortunately, many of the terms we have to use make it very easy for folks to get confused when we talk about name, image and likeness issues in college athletics or the NIL marketplace. There's really two fundamentally different markets that are happening. We have a name, image and likeness marketplace that operates in many ways pretty similar to standard influencer marketing or other kinds of promotional activity. And that's where a brand or a charity or some kind of third party group enters into a commercial relationship with an athlete, because that business thinks that will actually help their business. I have done some of these. I have paid dozens of athletes across the different sports across the country to promote Extra Points, which is my publication. We're sponsoring division three bowl game this year. We will probably do NIL deals with some of the athletes who will participate in that game to promote the game and help sell. And I do that not because I'm a secret Carnegie Mellon football booster. I look at that because, like, I think that that will help my publication commercially. An athlete that is a twitch, streamer, or sells jewelry or is a painter, that kind of activity could all be considered NIL. And that's one component, the majority of this marketplace, though. And in fact, I would say the vast majority of this marketplace would be what I colloquially call bagman NIL, which is fundamentally divorced from any kind of actual marketability. It's driven by donor led groups, which we call here collectives, that are contributing money that essentially as either talent acquisition fees or talent retention fees for athletes, and then saying that it's about marketing rights. If you are a 310 pound left tackle with 800 Instagram followers, my brother, you are not a marketable person, especially because you're 19, but you may be exceptionally valuable as a pass protector, and you need those if you want to win games. And so an NIL collective will raise money from a bunch of donors and say, all right, we're going to give this left tackle a $400,000 marketing deal. It's not marketing anything. You might show up at one event, they pay them 400 grand because they wanted to play for State U. And we have hundreds of these collectives now, from major institutions like Penn State and Ohio State to UMass Lowell. I think Marietta College, division three school in Ohio has one of these. There's a couple in the division two and division three space. They might have market caps of anywhere from 20 million to 20,000. And they use that to distribute money to athletes. And they range quite significantly, I would say, in sophistication, from essentially baby versions of CAA or WMT or club sports or a huge talent agency, to a group of message board dads passing the hat and hoping to Venmo the quarterback a little bit of extra money. And for the NCAA and for anybody that working in this industry could coach, administrator, even athlete or parent, this can be a very complicated world because the collectives, as of today, are independent parties from the university. So that means that you essentially have a shadow guy running payroll or serving as your general manager who doesn't have a university email address and may or may not be working in concert with the university's interests, um, it's good for players because it means they get a lot more money than they did five, six years ago when everything had to be underground. But in terms of, like, organizational efficiency or best practices, it's a pretty ridiculous system. And the NCAA is hoping this House settlement allows them to build more guardrails that they can legally defend in court.
Jeff Selingo:
And so that would allow them essentially to kind of manage. Not manage these, but kind of oversee them in some way, potentially, because in some ways, it seems like this reminds me of kind of like political action committees, right, in politics, right? They're kind of separate from the campaign but really, they're doing the campaign's work because they could collect a lot more money than the campaign can.
Michael Horn:
There might be more coordination here also, right.
Matt Brown:
Is that I think the political action committee comparison is extremely apt, because, as I think all of us know and anybody that studies politics knows, there's what, there's the FTC regulation about PAC and donor collaboration, and then there's what actually happens. Like, no, this is my freedom PAC that I have no correspondence with whatsoever. And that's. That's what happens here. And it also, I think, speaks to the challenges of enforcement. Right. Because the NCAA already currently has regulations that say, hey, you can't do a pay for play deal. It has to be born out of some level of economic reality and market rate for what you would pay another influencer, and you can't do it. These kind of industries, and you've got to report ex paperwork. But the problem is, whenever they try to enforce any of those rules, they get sued and they lose because state court and anybody else would say, this is an antitrust violation. You're trying to impose a collective bargaining agreement on me, the guy that's not an employee, you. The university doesn't do this for their drama club students, or their trombone players, or their student newspaper editors. How can they do this for football players? And the NCAA generally loses. So the hope is, hey, with this lawsuit, with the settlement that gets blessed by a judge, we can now have the court say, actually, x, y, or z enforcement protocol is okay. And that's why the NCAA and university presidents are constantly going to Congress. They feel like they have a protocol, but they keep losing in court.
Matt Brown:
And so they need Congress or the courts to bless it so they can actually enforce any of these rules.
Jeff Selingo:
So, Matt, just one quick question before I turn to Michael.
Matt Brown:
Yeah.
Jeff Selingo:
Is this going to be kind of the new arms race, though, in athletics? It's not about the biggest stadium anymore, but it's about the best NIL collective.
Matt Brown:
That is happening in many ways. I've heard from many universities that have said we're going to postpone some facilities projects or we're going to redirect donor money from x, y or z so that money could go to the collective or go more directly to players. Because given the opportunity of a 19 year old, what's more important? Playing in a locker room that has lasers and a barbershop or cash. Most of us would pick cash, just like when we're applying for our jobs. I would rather have cash over a really cool pool table in the break room. I'd prefer that you pay me. Um, so. So that is part of it. Not every recruitment decision is explicitly only about money, but just like it is when we recruit graduate students or when we recruit anybody else in the university system, money's. Money's a big factor. Um, and. And that's. That's part of the NIL process and part of athlete recruitment now, just like it is for staff retention.
Michael Horn:
So, Matt, when I hear you describe these collectives, it feels like an increasingly blurry line to the other side of this conversation, which is the status of student athletes becoming employees. Where are we on that conversation? Why should our audience care how that one unfolds?
Matt Brown:
Well, I think you should care if you work for a university or are, for industry reasons, like, deeply concerned about the financial health of an institution, because an employment status would trigger massive, massive changes in every athletic department. And to your point, I would look at this and say, yeah, especially if we're going to move to explicit revenue sharing, where the university actually gives some of this tv money directly to athletes, it's going to walk like a duck and quack like a duck and look a lot like a duck for employment status. And we have multiple National Labor Relations Board investigations into whether athletes were improperly classified. We have a unionization effort for Dartmouth men's basketball. We have the Johnson v. NCAA federal case. Granted, these things could also be tied up in the courts for many years because, you know, if there's a Trump wins or if we have a different Supreme Court, maybe there's not even a National Labor Relations Board at all, you know, let alone one that would be sympathetic to athletes.
Matt Brown:
So there's, that is probably not going to be resolved immediately. But if I was a plaintiff's attorney, and this settlement is approved, I would definitely look at that and say, like, this only enhances the argument that athletes should be employees. And then at the college, athlete is an employee, well, then they're not just required a salary and minimum wage, but then there's workers compensation, and there's payroll taxes, and there. And there's FMLA, and there's these other things. Ohio State football can afford to do that for Ohio State football players can Fairleigh Dickinson afford to do that for volleyball players. Can anybody afford to do this for their track athletes who do not produce the same kind of revenue? And if you move them into compliance to avoid having to pay overtime, can you still maintain the same schedule, athletic competition that you can? That's a question that has to be interrogated for literally every single school that has an athletic department. Even if you're a division three institution that doesn't even ticket for anything, the courts might look at that and say, yeah, no one's going to pay to go to watch Washington University football. But if you're, if they're controlled the same way as Missouri football, maybe they should still be employees. And then, and then that changes the paradigm for, I think, what kind of supports most small college athletics? It's a very big and thorny question.
Michael Horn:
So we want to come back to small college athletics and the Olympic sports and a bunch of these things in a moment. But I want to stay on one other thing, on sort of the big time athletics and not always, frankly, big time athletics. As listeners of this podcast know, and Jeff likes to remind them, I'm a huge basketball fan. I grew up in the heyday of the Hoyas and then Terps in DC and now a big Celtics fan. And so I followed the recent news of ESPN NBA insider Adrian Wojnarowski, who I never pronounced his name correctly, giving up reportedly millions of dollars to head to his alma mater, St. Bonaventure in upstate New York to become their general manager for the basketball team. And I think the headlines, and I confess they confused me. I think they confused a lot of people because all of a sudden we're saying, wait a second, college athletic programs have GMs. It felt like another new title and a title obsessed, you know, world of higher ed, which we're already talking about, has an issue with administrative bloat. So what exactly is a GM in college athletics and why might someone be jumping from a pretty cushy job at ESPN to be take that on?
Matt Brown:
My unfortunate answer is much like the rest of higher education with title bloat this is not a like standardized role. What, what a GM means is different from school to school. The GM of a professional sports team like the Boston Celtics or my Cleveland Cavaliers is generally referred, you know, would be considered front office role. And that's somebody that oversees scouting, overseas drafting, overseas contract negotiations and is the guy in charge or girl in charge of figuring out who's going to be on the team and how we pay for them and how that fits in with our, with our business office. And generally the coach is below the GM on the organizational chart. Sometimes they're the same person, but the GM is often the direct manager supervisor of the coach. That does not happen in college when the GM role right now is kind of a catch all for all of the stuff that has nothing to do with coaching basketball.
Matt Brown:
You can't have a director of salary negotiations or the same way, because there's not a collective bargaining agreement and that arrangement is going to look differently. A GM may be somebody who helps with scouting and figuring out who are the kind of people that we should be looking at, maybe spending NIL money on or going after, but it also might be a fundraising role. It might be somebody that helps connect athletes with agents, helps athletes understand what their professional opportunities might be, not just in the NBA but elsewhere in the world, help them secure actual marketing contracts and trying to bring in other professional and player development resources into a program. So somebody like Woj would be excellent for this because nobody on the planet knows more agents and knows more professional basketball player personnel folks than Woj. Not just in the NBA, but in Spain and in Greece and in Italy, the kind of places where a St. Bonaventure player might hope to play for seven years and make more money than any of us for a little while, right? We have other people that have come into this role who were coaches or who were scouts, and no disrespect to somebody who might know ball a little bit better than a longtime reporter. And that might work, too, if you're at a school that's never going to raise any kind of meaningful money and his only, only hope is to go find some Serbian teenager and convince them to come to Loyola Maryland or something, maybe you look for a different kind of position for that role. I don't know what's going to end up being the template in five more years.
Matt Brown:
This is not a job that pays like NBA insider, but also if you're somebody like, Woj where you've already made enough money and you might want to decide, maybe I don't want to have to worry about showering with my phone so I can make sure that I'm not scooped on Isaac Okoro's new, like, contract extension. If you want to have a slightly better quality of life, which is insane to think about, that athletics in college would be like a calmer job. It could be that way. And I could see, you know, an NBA vet or some athlete who retires or somebody who's, who's stepping away from a head coaching role, maybe step in and wanted to have that serve, that kind of position for a school that they care about.
Jeff Selingo:
Yeah, Matt, we should say that we laughed at the Woj showering with his phone, but he actually does do that. So those listeners who don't know that...
Matt Brown:
I've never told a joke. Yeah, that's it.
Jeff Selingo:
So Michael is the big basketball fan, and as I mentioned earlier, having grown up in PA with all my in laws, they're all Penn State grads. I admit I love college football, and in watching the games this fall, I'm just amazed at how it seems with the mention of so many players you'll hear, you know, he came from X University this year to shore up the offensive line. And, you know, following college sports with the advent of the transfer portal has really turned into almost like the hot stove league in baseball. To maybe mix my sports metaphors there for a bit. But, you know, I think, you know, making student athletes sit out a season if they transferred, while coaches could kind of go anywhere they want it, that was never a great system, right? That was the old system, and it needed to change. But the transfer portal really seemed to swing in the completely other direction. The pendulum in the completely other direction. Is this what we expected? And if these are truly student athletes, is this really in their best interest in terms of being a student?
Matt Brown:
In terms of being a student, the answer is almost certainly probably not. And we have enough, I think, research to know, independent of athletics, that many students that transfer schools even once are going to be at some academic risk. And if they transfer multiple times where we know that credit systems don't always move over exactly the same way, then you got to be in the registrar hell. And yes, if the goal is to complete a degree in four years, moving around two or three times in any circumstance will make that more difficult. But I also have some sympathy for the athletes that elect to make these decisions. And we can, we can use basketball here specifically because I, for my money, this is the most transient and transactional right now of all college sports. If you are a high school basketball player who is not Zion Williamson, who is not some consensus first round NBA five star guy, and you go to a regional school and you play well, there's going to be significant demand for your services from other institutions and from whose collectives are willing to pay upfront. Six figure payments. If I had been offered a job that paid $350,000 when I was an undergraduate of Ohio State, would I have dropped out to take that job? Of course, I don't make $350,000 now. I didn't. I made 38 when I graduated, teaching elementary school. Especially if you came from a Pell Grant family. I think if you, if you can get that contract and it's, you get a lawyer to approve it, it would be insane not to take it. And you might take that 350 and you might play basketball for one year, and if you do well, you might get another one. It's actually just like it is in the private workforce. It's easier to get a raise if you change jobs than it is to go back to your boss and try to negotiate a raise. And this is why we see a lot of people in higher ed switch from place to place. And maybe I'll go work for Huron consulting for a year, or maybe I'll go to a think tank and then I'll come back. Right? It's this exact same principle. And coaches do it, assistant coaches do it, athletic directors do it, everybody in the apparel world does it. And this is where people learned it from. So it's an irrational self interest for individuals who have a very limited time to maximize their basketball related earnings or their football related earnings, given their injury risk, to transfer a lot. And I dont know a great way to square that circle between wanting to help people maximize their earnings potential and take care of their family, while also put themselves in a position to get the best possible academic experience. And they get a degree because you could tear your ACL at any time without collective marketing, without limits here on structure, on these deals that wouldn't hold up in court without this. If I knew how to fix that, exactly, I wouldn't be in the newsletter business. I would be in the policy making business, I think.
Michael Horn:
Fair enough. And I guess, look, if you're getting $200,000, you can figure out whatever those credit hours are worth. You could float a few that don't transfer, I suppose. Let's step back, though, a moment, because this, as you've said, has focused a lot on football and basketball so far. But I'm dying to know what happens to all the other non revenue generating sports as all these changes and potential changes are taking place. I mean, these sports impact everything from the pipeline for US Olympics that many of us couldn't get enough of this summer, to how colleges, as you mentioned, fill out their enrollment. In many cases, you know, without these programs, a lot of colleges would be on life support. So if those athletes are employees, for instance, is that become a bigger reason to move then to a club or intramural structure for sports? Does becoming D2 or D3 all of a sudden become more attractive? Like, how do we think about where this is going for all of the Olympic sports? Non football, non basketball?
Matt Brown:
Yeah. And to your point, Michael, it's actually why I try not to use the term non revenue in my publication because every sport generates revenue. It might not generate a lot of ticketing revenue, but, yeah, if you're a division three institution and you have a baseball team, that baseball team may actually be cash positive. If we count tuition as revenue or the money we get from the international athletes that come in to swim for us. That's why we have schools that sponsor 36 sports that are placed at Wittenberg rather than Ohio State or Stanford. If those athletes become employees, that completely just changes the financial calculus for having these large athletic departments. And I think if you are tuition dependent school with a robust department, that would unquestionably mean you have to make it smaller or move it to club. And if you move things to club, that will change the employment status of many of your administrative personnel. And I tell folks like, this isn't something I necessarily want to cheerlead, because the people that are going to be losing their jobs are mostly making $54,000. They're not the $1.2 million athletic directors. They're going to be fine. Whoever is the associate AD of compliance at Texas A&M commerce is somebody who's more likely to be on the chopping block in this world. We don't really know yet whether an employment status would mean just power for high revenue generating sports. We don't know if that would mean just division one. We don't know if it would mean anybody. If you look at Dartmouth men's basketball, God bless those guys.
Michael Horn:
Maybe they're going to win a game this year.
Matt Brown:
Yeah. I mean, yeah, like that. This is. That is a program that will be outdrawn by a below average high school team here in Chicago.Anybody in a top 200 us metro will have more people at a boys basketball game than Dartmouth. And if they are judged to be employees because of the level of control that Dartmouth provides or from some of the non cash compensation that those athletes get. I think you can make that same argument for virtually everybody in division two. I don't have a value judgment, necessarily, by what. What the law says here, because I didn't. I don't. I'm not. I'm not barred. I don't know enough about those particular cases, but I would say, like, if I was advising a division two institution, I would say you need to get outside counsel to make those evaluations, and you have to determine, are there ways we could make our athletic department compliant with the law without having to add 300 people to our payroll as part time employees? It's a very difficult question, and there's not a great solution. I'll just say that there's a reason that almost every other country in the world pays for their elite athletic development for the Olympics via their federal government or via their national government. Everyone else has a Minister of Sport. Sometimes the military is involved, sometimes it's taxpayers. Nobody does the american college sports development system like we do. And if we can't siphon wealth from football and men's basketball to track at swimming to pay for this thing, we have to build a different model.
Jeff Selingo:
Well, I'm assuming the US Olympic Committee is looking at that because they don't want to give up on the success they had this summer either. Right? So they're going to look at that. I just want to ask quickly, you mentioned division two, but how about division three? Because that is the biggest division of all colleges and universities. Do you see a lot of this then, flowing down to that? There's really no difference, in your opinion?
Matt Brown:
I mean, it depends a lot on the institution. Division three is tricky because it is the largest one. But I think we, those of us that are familiar with small colleges know there's a difference between Mountain Union football or Whitewater football of a division three program that is highly competitive.
Jeff Selingo:
And I'm very disappointed by the way, you didn't mention Ithaca College.
Matt Brown:
I'm sorry, so I have to hold up the card next time.
Jeff Selingo:
Right.
Matt Brown:
So you have some of those schools and then you have some division three schools that are closer to closing than they are competing for championships, where the competitive and the administrative and structural experience more might more closely resemble high school. The legal argument that, hypothetically, a Wisconsin Whitewater may exert more control over football players than, I don't know, a really terrible division three program. Maybe. Maybe that's true. Maybe that's not. Um, I think that's. That's a question for lawyers, right? If you are, you know, restricting what classes an athlete can take, if they are expecting compensation, if you are exerting high levels of control over them on road trips, um, maybe. Maybe you would be at risk. And, like, those are the kinds of questions I think you have to ask their university general counsel. And, like, look at this Dartmouth reading. We know it's going to be appealed. We don't know what the next administration is going to do here, but this is not something I think you can just ignore and think, oh, that's an Ohio state problem.
Jeff Selingo:
Right. So in other words, for division one, going to, you know, moving some of their sports to division three or clubs or whatever may not solve their problems, not necessarily.
Matt Brown:
I think it would be a much deeper evaluation of how you run your athletic department. Wow, that's. That's quite a title change across everywhere.
Michael Horn:
Hopefully people are starting to see why this is relevant. And by the way, you could be a closing college and still compete for a championship if you're Birmingham Southern, for example.
Matt Brown [00:33:18]:
You could.
Michael Horn:
But switch the topic for a moment. Jeff and I were both in Boise recently, and we happened to be there the day that the PAC-12, or the moment it was. The PAC-2 at that time, announced it was adding teams, including Boise State. Last time we had you on, we were in the middle of a huge conference realignment. We still seem to be in the middle of that. It seems to be ongoing. Is this going to end or is this just sort of the perpetual state of college athletics?
Matt Brown:
You know, I wrote a story in August that I regret a little bit now.
Michael Horn:
I remember it. I remember it.
Matt Brown:
And I wrote this in early August and said, I believe based on what I am hearing, this is not just me shooting off the dome here, but based on my reporting, we are going to enter a period where conference realignment is going to be very slow for the next several months because many institutions are looking at the instability of the House settlement, the instability of employment classification. They're recognizing I don't have enough data to make a major decision. I also wrote in that story that one of the holdups is whatever happens with Oregon State and Washington State, and when they make a decision that will force the hands of a lot of other leagues. I was expecting that to happen after football season in late November. Instead, they were very rude. The whole thing kicked into gear three and a half weeks ago, and so now where we are, there's an enormous amount of instability in realignment. Both the Mountain West and the PAC-12 conference do not have enough full members to satisfy NCAA bylaw requirements to be like an automatic bid league. They both need to recruit new institutions that those conversations could extend all the way out to my neck of the woods here in Chicago with potentially Northern Illinois, uh, which isn't even the Pacific part of Illinois, let alone like the country. But it could also move down to five or six other division one leagues, and even at the division two level, it could sweep up and impact 40 or 50 different institutions. That's generally what happens here. When you have a move from somebody at the very top and they take somebody from one league now they have to backfill, they keep going, and next thing you know, we're talking about Cal State Los Angeles. And that's where we are. I think it's unfortunate that the farther down we go and the more geographically divorced from reality these arrangements get, it does begin to look pretty stupid. We can criticize UCLA joining the Big ten, but I think it's not difficult to understand the financial reality of why you want to do that. The math doesn't come close to adding up to send Toledo to Fresno for multiple sports over the course of the season, but that's where we are at this point.
Jeff Selingo:
So, Matt, a final question here. If we had you on, say, next year or the year after? Let's say next year, you know, what's the one question we didn't ask you today that we might be asking you to answer next year? Could you look a little around the corner and think about like, what haven't we talked about today that you think is kind of bubbling under the surface? That if we had you on next year we might ask you about.
Matt Brown:
You know, this, this might be a little bit esoteric, but one of the things I am a little concerned about and I think is going to become more and more of an issue. As many public institutions, particularly in the red states, have governance models that are changing where more politically oriented regents or more politically oriented university governments steps into play. I think we've had this discussion a lot about university self governance and what's appropriate, outside interference or not, in the context of curriculum, in the context maybe of DEI or admission standards and everything else. And there's a good conversation. How about whether some of those are good or bad choices elsewhere? I think that will either continue explicitly in athletics, or athletics will begin to feel the impact of some of those potential decisions which will bring in different kinds of external stakeholders. And that's, you know, just as an outsider, that's an interesting intellectual question, but it's also something I think that has to be grappled with by universities like I would. There's some research even to suggest this, hey, if my state passes a ten week abortion ban, or if we have political changes happening in our state where it's going to be difficult to have enough OB GYNs, am I going to be able to recruit a senior women's administrator? Am I going to be able to recruit a softball coach? Or is this going to impact my ability to recruit and retain women students and women athletes? I've heard this a little bit from some schools in Idaho about where they're trying to help facilitate insurance plans for employees in Washington state, given that there's healthcare disparities. We already see this a little bit, I think, on the kind of the blue state world with cost of living, not an easy time to go try to hire a junior staffer at San Jose State or even a Berkeley if no one can afford to live there anymore. I know that there's.
Matt Brown:
I have sympathy for people in my world that are like, stick to sports. I'd like to, but we do live in society. And unfortunately, other societal, political, cultural changes in higher education impact sports. Not just the university. Not just the university as a whole. And I imagine, particularly after this election, this will become more clear in more in more markets.
Jeff Selingo:
Yeah. And I can't even imagine the tax implications of the student athletes now who will travel just like, by the way, just like professional athletes do. And so when they play in certain cities, they're gonna have to pay local tax. I mean, it is just gonna be a complete mess. And it makes me wonder whether colleges will say, finally, you know what? We're going to divorce athletics from the academic mission of the university. So we'll see where this all goes. Matt, it was great to have you again. Really appreciate you, having you on Future U.
Matt Brown:
It was a pleasure. Thanks for having me, gentlemen.
Jeff Selingo:
And we'll. be back right after this.
Michael Horn:
This episode of Future U is sponsored by the Gates Foundation. Students need support at every stage of their education to career pathway, and colleges and universities need to evolve to meet their changing needs. Learn more about the foundations efforts to transform post secondary institutions to be more student centered at usprogram.gatesfoundation.org.
Jeff Selingo:
This episode of Future U is sponsored by Ascendium Education Group, a nonprofit organization committed to helping learners from low income backgrounds reach their education and career goals. Ascendium believes that system level change and a student centric approach are important for our nation's efforts to boost post secondary education and workforce training opportunities. That's why their philanthropy aims to move systemic barriers faced by these learners, specifically first generation students, incarcerated adults, veterans, students of color, adult learners, and rural community members. For more information, visit ascendiumphilanthropy.org.
Michael Horn:
Welcome back to Future U, Jeff. I love Matt. I love his newsletter, Extra Points. And I love the conversation we just had, of course. And I really do think it's much bigger than folks often think in terms of how much it impacts the future of higher education writ large in this country. We got Matt's take on all that. But Jeff, I would like to hear it from you because he's covering it. He thinks it's fascinating.
Michael Horn:
You cover it from a very different angle, and you say, this is fascinating as well and has large implications. But I want to ask the question in a slightly different way. What do you think the people you talk to and people out there consistently miss about athletics and higher ed that makes this such an important topic to understand?
Jeff Selingo:
Yeah. So, Michael, I think everything in higher ed boils down to market position. And although leaders don't like to admit it, yes, you hew to your mission as an institution, but there's really a herd mentality in higher education. And strategy is really around, I think, differentiation at the margins. A lot of institutions really don't want to have a strategy that differentiates them at the core of what they do. But what I think is often lost in the siloed nature of institutions is how everything, and I mean everything within an institution connects together. So I'm going to walk through kind of an example here at an R1 research university. So say its strategic plan might say it wants to gain more research dollars. They want to have more, get more federal research dollars. So it's vice president for research. It goes to the board of trustees to present a plan for hiring new faculty that will bring in all these new research dollars. Now just to do that, to get those federal dollars, it's also going to require some institutional dollars to hire those faculty to kind of kick start it and get going. So the leadership wants to say get more out of state students to bring in more revenue. But, you know, every other state is doing that as well. So in this presentation by the vice president of research, that's followed by the vice president for enrollment and marketing, who says, well, what the institution really needs to do in order to attract more out of state students, we need to move up in the rankings. And that requires the institution to hire, you know, more full time faculty, improve their salaries. We need to use merit aid to buy better students with higher academic profiles from out of state, et cetera, et cetera. Again, all of this is going to cost money. Now hold on a second, because I know you're probably wondering, well, where is this all going? And I'm going to connect it back to athletics, because later in that day, say we're at this board meeting, the athletic director and the CFO, they have a proposal to expand the football stadium, for example, and they maybe they want to do some work on the basketball arena where the basketball team plays. And the board maybe asks, you know, what is the risk if they don't do this, if they don't spend this money. And the athletic director says, well, you know, we're going to be left on the sidelines then during the next conference realignment. And that means leaving all those tv rights dollars on the table. But here's the thing, Michael, that no one in that boardroom likely did ask is how is this all connected? How is our athletic conference, our market position, our rankings, our research standards, how is it all connected? Because it is at the end of the day, because, remember, you know, when the Big Ten expanded and they brought in UCLA and USC and the ACC brought in Stanford, but both conferences, if you remember, they left Oregon State on the sidelines. They left Washington state on the sidelines. You know, one thing I know the Big Ten looked at, and I bet the ACC did, too, is the academic standing of those institutions. They looked at their research expenditures, they looked at their, you know, overall market size, of course, of their tv market and things like that, because at the end of the day, it's all connected. And we tend to think, you know, athletics operates as a separate entity because maybe it does from a reporting standpoint, but it is part and parcel of the institution, whether we like it or not. And the university as a whole rises and falls on the strength of its athletic department. And in D1, that's about marketing, that's about revenue, that's about tv, and even in division three, that's about enrollment, that's about filling seats with athletes. And I just want to stay 1 second here, Michael, on D3, because I may have mentioned this before, but I met this guy in reporting the new book. I call him the college closer. And when my book comes out, I'll talk a lot more about him. But I met him this summer, and he was, you know, I was asking him, you know, what are the, what are the risk factors of colleges, universities? How do we know when a college or university might be in trouble? And one of the things he told me is when they add sports, right? When they add a lot of sports. And, you know, in division three, we're seeing the largest growth in athletic participation of all the divisions right now, right? They added 17,000 athletes in 2002, 2003 alone across all of division three. You know, you take a small college, like in Michigan, like Adrian College in Michigan, they have more than doubled their enrollment to 1600 over the last 15 years. And you know how they've done it? They've added 30 sports teams, right? Synchronized ice skating, bass fishing, varsity cornhole, and things like that. 70% of the student body there are athletes, right? And, you know, we see this in other places as well, where athletics is seen as a way to kind of save the university, as Matt said. So that's why people should care. There are no silos in higher ed. Everything is connected. Everything is cross subsidized.
Michael Horn:
Wow. Just a lot of wows in that, Jeff. It shows how interdependent, right. These institutions are. They can look modular with their departments and their majors and the college athletics, but they are very. It's a thicket nest of interdependence. It also, hearing you say that makes me reflect on Malcolm Gladwell's new book. I haven't read the book about sort of how trying to avoid going beyond the tipping point is essentially the argument in it to keep things the status quo. He had an interview with our friend David Epstein recently in his newsletter, where he talked about how, in essence, Harvard, his allegation, uses some of these frankly, long tale of sports, rugby, and other things to actually prevent the campus from diversifying too much in any one direction and keeping a balance. Perhaps overly skeptical or cynical, but it is really interesting when you hear a number like 70% of students at a college are athletes. You have to reflect on it. And then I always come back to Joseph Ayoun's quote that he gave us on the campus tour, where higher Ed is diverse but not differentiated. And listening to you, wow. Okay. So I was struck by another topic as well, Jeff, which is the frequency of transfers via the transfer portal now in athletics.
Michael Horn:
And Matt's. You know, Matt made the point about how many of those student athletes, their credits might not, in fact, transfer, but of course, in many cases, they're also potentially getting a six figure paycheck on the other side. Staying with the theme of connection, this seems to connect to a lot of the other conversations you and I have had over the past couple years in this show around dual enrollment, around how to evaluate the success of community colleges and more. I'm curious how you see the issues that have arisen with almost a free agency style transfer going on in college athletics today.
Jeff Selingo:
Yeah, Michael. And I guess the way that he put it, the way that Matt put it, that, well, they're making money, right? So if they're making money by transferring, maybe it's, you know, in my opinion, maybe it's better than Joe Student who is transferring and has to then doesn't really have the money to pay for those credits again. Right. So they are. To them, it's terrible. And I'm not saying it's better for athletes, but if they're making money in the transfer because of the transfer portal, because of NIL and other things, then, you know, at least they'll have some money to pay for those credits. Again, not saying it's a good thing, but I do, I do maybe worry a little bit less for them than I do for the student who may not have the money to pay for those credits again. And just two things on this, Michael. You know, free agency in professional sports, I think, has tended to benefit the athlete. And while some college athletes will probably benefit from transferring by, for example, getting more playing time in front of bigger audiences and scouts, the fact of the matter, as that NCAA commercial says, that most student athletes, and I think I'm going to change how they say it because they're really athlete students, as we know at many colleges, right. As the NCAA commercial says, they're going to go pro and something else than their sport. So I think the NCAA, the conferences, they really need to start putting resources behind that statement. And how do we help these athletes make the transition to jobs outside of playing sports? Because even if they transfer and even if they get more playing time and maybe they get recognized by the somebody in the NBA, the NFL, their careers are going to be short. Maybe they won't get drafted. They are going to have to have a career. And we should be able to give them something more than just a bunch of credits. We should be able to give them a valuable degree, but more than that, we should help them transition into the workforce. And Michael, I told you earlier in the fall, in our first episode, what I did this summer, we were in Switzerland and we went to the Olympic museum in Lausanne. And I highly recommend it, by the way, if you ever get to, if you ever get to Switzerland, I'm a huge fan of the Olympics. And near the end of the exhibit, and I'll butcher my French here, they had this exhibit on the La Reconversion, right? The english translation at the museum was changing careers for Olympic athletes. And as they said on the display, elite athletes will have the strength of character, the perseverance, the team spirit, the resilience, all of which are in the demand and the labor market today. And I agree, right. College athletes make great employees, but we have to help them make that transition. And then just the second point, and Matt brought it up around the transfer portals right now, I think being driven a lot by these NIL cooperatives, collectives,. That's really what's driving a lot of the transfer mission, because students not only know they could get playing time, but they could potentially get more money at some of these other institutions. And, and I do worry that there's a lot of dark money here. It does remind me, as we said, of what's happening in politics around these PACs where there's a lot of unregulated money. There is a lot of conversations happening between, we know there's a lot of conversations happening between the campaigns and the parties and these PACs. And it's clear the same thing is happening in higher ed. And so I wonder whether there will be some regulation around this. If these NIL collectives, if there's some regulation put around them, will the transfer portals necessarily continue at the same clip? I think it's an open question.
Michael Horn:
Yeah. Jeff, I feel like you're saying a few things that are going to raise the ire of some administrators listening. I've heard market positioning, athlete students. You've got these turns of phrase that, that higher ed may not want to hear. But you also said networks is what I hear out of the let's support them into jobs because they have great skills. They do get perhaps great networks through being part of a sports team with alumni and so forth. And so leaning into that, I think, would be important. And then the other thing I was reminded, as you were just saying, that is I thought the men's basketball team, for example, at the Olympics, and the women's basketball players as well, did a good job of reminding us that a lot of those athletes who are competing in sort of the sports we only think about every four years, this is actually not their full time job in many cases. And so, you know, again, doubly triply so.
Jeff Selingo:
Right.
Michael Horn:
When we think about these athlete students, I think I got your phrase right there. So last topic, I was struck by Matt's observation that, yes, if student athletes, athletes students, I'm gonna have to work on this, become, it doesn't have a.
Jeff Selingo:
Student athletes has a ring to it.
Michael Horn:
But if they become employees, Jeff, then moving sports to the club level is going to make sense, but then that's going to impact the jobs of people in the administration who help support all these sports programs. That seems to get into a question that you raised during the pandemic, frankly, if you remember, which was we were talking a lot about faculty health, and you said, well, how about the health and well being of staff members and making sure that we got them? And so that's one thought that occurs to me. I guess my other reflection is that I think we're going to see the sea change sooner rather than later. Student athletes as employees, given what we just heard around the NIL collectives feels more and more inevitable. And I still think that the IRS could come out and rule that athletics at a college level or unrelated business income which then would make them all taxable for these nonprofit schools. But here's the thing. If a bunch of sports become club sports, then that's going to impact the so called Olympic pipeline, right? How America trains its athletes for Olympic sports, which we've thrived in a very different model from the rest of the world. But I don't know that I see us starting to spend federal money on the Olympic sports given all the questions facing our country and dysfunction. It's not something I see happening. So I just wonder, will colleges still be at the center of that universe through some other twist and turn in your view? Or do you think we'll see private enterprise step in which frankly, if that happened, like we got alternative sports leagues for these other sports that could cut further, frankly, into the students attending colleges in some ways. And I just don't know where that ripple effect will go. But as you said, the Olympic committee is certainly going to be looking at it. I'm just, I'd love to get your take. What's the larger set of ripple effects here?
Jeff Selingo:
Yeah, it's unclear to me, Michael. I mean, if you look at where the most of the Olympians come from in terms of colleges in those Olympic sports, I think they tend to be among more elite public and private institutions. Right. Like I know, University of Virginia, for example, sent a ton of swimmers this year. Stanford, we know, sends a ton of, of people to the Olympics every year. And if you remember a couple of years ago, Stanford, remember, tried to change or tried to cut a couple of sports and the alumni went up in arms and Stanford has a lot of money so they were able to bring those sports back. So I can't imagine that even in this new world that you will see at least some of these very elite institutions cut these Olympic sports. But that's still a very small number of institutions and we need a lot of Olympians. So at some point someone's going to have to step up and I think at some point it's going to be the NFL, the NBA and the US Olympic Committee are going to have to start paying up in some way for what has largely been offloaded to colleges and universities to train future Olympians, future NBA stars and future NFL stars. And I think it's been completely unfair among all of those places that they really haven't ponied up as much as I think they should have all these years for higher education because they've essentially provided that talent to those entities. And so at some point, there are going to have to pay up. I also think, by the way, this whole idea that we talked about in terms of the general manager, athletic offices, I think the office of the athletic director and all the staff that you have, you're going to need a whole different talent level there around trying to figure out the money, the employee status and things like that. This can't be managed by the HR office at the college or university. Right. This is going to have to be managed in a very different way by the athletic office. And I think we're going to see some outside money here. As we're recording this, I'm getting ready to go to the big P3 public private partnership meeting in Denver at the University of Colorado at Denver, where you have a lot of people talking about public private partnerships in higher ed. And I was fascinated that there is a whole panel on athletics, right. We tend to think of public private partnerships around housing and around online education and things like that. And now I think we're going to start to see more public private partnerships around athletics because they're going to need to find revenue sources somewhere else than just besides the TV rights and the conference rights and things like that. We're going to have to find new money somewhere.
Michael Horn:
So, Jeff, I think a perfect place to leave our conversation and appreciate you diving into those points and things that we ought to think about. Of course, a huge thank you again to Matt Brown, our guest on this episode, for really laying out the scene for us. It is such a fast changing scene that we're probably going to have to have him back in a couple years because, as I think we've demonstrated, this really does impact all of higher ed. Thank you, of course, to our listeners. And as a reminder, you can all follow us. Future U podcast on the social media channels. Go to futureupodcast.com. Sign up for the newsletter that is coming out monthly. Follow Jeff Selingo at jselingo on the social medias. Me, Michael B. Horn. And for all of you, we appreciate you listening. We'll see you next time on Future U.
