By MARC ISENBERG, Sports Business Journal
The rights of college athletes are under attack - and, as usual, the "amateurs" lose to the business pros.
Media companies and professional leagues and athletes have all benefited from the emergence of fantasy sports, whether directly through increased revenue and licensing agreements or indirectly through a more captivated fan base.
College fantasy sports, on the other hand, lagged behind. That changed in June, when the U.S. Supreme Court refused to review the 8th Circuit's holding in CDM Fantasy Sports Corp. v. Major League Baseball Advanced Media. A lower court ruled that the First Amendment rights of a fantasy league operator to publish news and statistics outweigh MLBAM and players' state law rights of publicity to their names and likenesses.
It was inevitable that a company would use this legal precedent to offer fantasy college sports ... with or without the NCAA's participation or approval.
Here's where it gets interesting: The first company to use this legal precedent to exploit amateur athletes for its own gain turned out to be CBS, the NCAA's largest benefactor, responsible for more than 80 percent of the NCAA's total annual revenue (CBS is paying the NCAA $6 billion over 11 years in exchange for rights to its men's basketball tournament.)
CBS's decision to enter fantasy college football quickly became a hot-button issue. The co-chairmen of the Knight Commission on Intercollegiate Athletics - William Kirwan, chancellor of the University System of Maryland, and Gerald Turner, president of Southern Methodist University - wrote, "NCAA bylaws establish that students participating in college sports ‘should be protected from exploitation by professional and commercial enterprises.' Clearly, these fantasy contests violate that tenet ... [and] if unchecked, is a step toward undermining the NCAA's bedrock amateurism principles, which require colleges and their business partners to treat athletes like other students and not as commodities."
Will these strong words sway NCAA executives to carry out this protection-of-amateurism mandate?
In a recent Huffington Post article, NCAA President Myles Brand played down fantasy sports' impact. While expressing similar concerns, Brand concluded, "The sky is not falling. College football goes on, student-athletes are still students, and there continues to be educational value in intercollegiate athletics. Maybe these leagues are less than they seem exactly because they are fantasy."
Fantasy sports conflicts with the NCAA's official position on gambling. According to the NCAA, as long as no money is wagered or entry fee required, it is not gambling. Brand pointed out in the article, "CBS does not charge for its college football fantasy league, warns on its site against the use of the leagues for sports wagering purposes, offers no prizes to the winners ..."
Brand might benefit from a lesson in Fantasy Sports 101: He is correct that CBS does not charge for its college fantasy football game, but people as young as 13 can easily set up pay leagues using CBS's robust platform. My wife's NFL fantasy league has a $150 buy-in. And if fantasy college football is not gambling, all the better as CBS gets to prime the next generation of the real fantasy sports players (as oxymoronic as that sounds).
Brand's strong amateur position flames out when he explains why the NCAA will not pursue legal remedies, stating "in the case of intercollegiate athletics, the right of publicity is held by the student-athletes, not the NCAA. We would find it difficult to bring suit over the abuse of a right we don't own." Could it be that the NCAA, its members and corporate partners have misappropriated these rights for the past 100 years?
Companies are prohibited from using college athletes' images and likenesses without their permission, which athletes should not give unless they are properly compensated, right? But, then these athletes would lose their amateur status and their college eligibility. Remember the NCAA ruled former college football player and Olympic mogul skier Jeremy Bloom ineligible when he tried to assert his marketing rights. The one potential positive: By not taking a legal stand now, the NCAA may pave the way for college athletes to assert their rights of publicity and all the benefits derived therefrom.
Brand believes that because MLBAM lost its case in the highest courts, the NCAA is doomed to fail, so the NCAA should not waste additional time and money. The NFLPA and other entities representing leagues and players looked at the same legal issues related to fantasy sports. What did they do? Exactly what the NCAA didn't - they all took strong legal action to enforce their intellectual property and the players' publicity rights.
In 2006-07, the NCAA reported $20,074,178 on outside legal counsel. (In the previous two years, the NCAA reported more than $22 million in legal fees.) Certainly, the NCAA has the ability to bankroll these kinds of legal battles on behalf of amateur athletes, who are neither funded nor organized.
CBS is not to blame. It owes it to its shareholders to exploit the NCAA men's basketball tournament property. While the NCAA tries to distance itself from CBS's fantasy games, the NCAA benefits from higher viewership and increased fan interest. If the NCAA rubs CBS's back now, CBS can return the favor in future negotiations.
The NCAA, representing 1,200-plus member institutions, is supposed to act like a fiduciary, putting the interests of its membership and its student athletes first. But the very foundation of intercollegiate athletics - the principle of amateurism, the educational component, the demarcation between college and professional athletics - crumbles when higher values translate into lower revenue.