Wrestling Beware

It appears there’s a strong possibility that collegiate athletics are about to see some major changes.

The California State Assembly voted 73-0 in favor of State Bill 206, also known as the Fair Pay to Play Act, which is a proposed law that would allow college athletes to profit from their name, image and likeness, above what they receive in scholarship aid.

This is just the beginning of what’s to come, with salaries and bidding wars to follow. That should scare the bejesus out of all the non-revenue sports; plus, every college and university, as well as the NCAA. Just think, handing out money above and beyond scholarship limits, plus, big-time inducements and contracts.

While none of this is going to happen in the next few months, the term, slippery slope, is about to turn from snow to ice.

Personally, I have no interest in taking a side here on whether star collegians, in any sport, should or shouldn’t receive additional compensation for their services. But the point of this blog is, when these proposals start gaining traction, the NCAA won’t be able to stop them.

Sure, they can say no, but that comes with great risk to their very existence.

As to numbers, basketball brings in 800 million dollars, just for the rights to broadcast March Madness. And, the athletes see none of it. Fair, not fair, right, wrong, you make the call?

But, when you throw in the television rights for football, the numbers are beyond staggering. While, on the other end of the spectrum, all the athletes ever receive for their efforts on the gridiron are bus rides to the stadium to play, and a warm shower afterwards.

This is what’s at the heart of the far pay to play movement. And no question, this a game changer.

College athletes in California, if the Governor signs the State Assembly Bill, will be allowed to sign endorsement deals; plus earn compensation based on the usage of their name, image and likeness. They would also be able to hire agents to represent them in licensing contracts.

How will this play out with the NCAA, that question will be answered sooner, rather than later. So far, they have politely threatened the state of California that if they pass the bill, that every one of California’s 61 institutions of higher education, will be denied the right to participate in all of their national championships.

I guess I should remind everyone, including the NCAA, that they’re a voluntary organization. They might have held monopolistic powers over the nation’s colleges and universities for over a century, but if schools want to thumb their noses at the organization and create something new, they can.

All the big boys have to do, the ones who control the narrative, about 30 schools in all, is tell the NCAA to go pound salt, and make the BCS its own regulatory organization. Basically, they can take the television money and run. And be assured, there are tremendous forces at play to make a model like this a reality.

As to the NCAA as an institution, they have to remember that money and power always speaks louder than any loyalty they’ve built up.

Do I think the NCAA will be broken up, heck no. They know what’s at play here, and I believe they’ll be forced to acquiesce, even if this doesn’t pass their smell test.

So, what does all this have to do with Wrestling Beware?

Just this . . . it’s not a matter of if, athletes are going to receive compensation above that of scholarships, but more a question of when, how much, under what model, and, what happens to the sports that aren’t revenue producers?

Whatever the answers are, they’re going to have a huge, with a capital H, impact on wrestling.

Our challenge, when this happens, is survival. Schools may very well have to spend up to double what they are now to appease the appetite of the athletes, and programs in the power sports.

Where’s the money going to come from?

It’s simple, non-revenue sports are going to become club sports, and even when that occurs, the savings that the athletic departments will realize, won’t come anywhere close to covering the shortfalls.

So, wrestling as we know it, as an intercollegiate sport, is going to disappear faster than you can say jack rabbit.

This is coming, don’t fool yourselves. I don’t think it will be tomorrow, but excrement hitting the fan by 2023 is a possibility.

What I’m trying to do here, is suggest to our leadership that this is something they might want to get out in front of.

The only sports that will survive this carnage will be those who are already money producers, not ones who then promise to work harder toward that end.

Let’s use Penn State wrestling as an example. If the 10 starters receive on average, another 10K each in inducements, or use of their likeness etc., that’s another 100k the Nittany Lions will be responsible to produce at the box office.

This is why wrestling’s leadership needs to get off their duffs, and start making enough changes to our sport that will significantly increase our fan base. Wrestling must become a serious revenue producer.

We have to, we must, find ways to put significantly more butts in seats, because what we have now, and what leadership is doing, is bupkis.   

The question remains; are we going to go the way of intercollegiate boxing and more recently, gymnastics, or are our leaders going to swallow their pride, retire their stubbornness, and do the uncomfortable?

Using history as a gauge, I believe we’ll end up going the way of gymnastics. Leadership will move so slowly that wrestling will go from being a semi-major non-revenue sport to having a grand total of 16 schools, exactly what gymnastics has today, competing for NCAA titles; in all three divisions.  

All this isn’t a climate change Chicken Little prediction, that the world is going to end in 10 years.

The only non-revenue sports that will survive this will be those who have substantially more money coming in, than going out.

Currently, wrestling is not even close to being in that category.

What many may not realize, beyond the obvious outgoing flow of precious resources, is what the Fair Pay to Play Act will devour, besides the obvious. Consider this:

If salaries to athletes are included in this arms race, beyond grants in aid, then federal taxes for Medicare and Social Security, with matching amounts paid by the employee, will have to be paid. They aren’t hidden expenses, but for most of us, they weren’t initially obvious.  

What does that mean financially? Well, if a school’s star quarterback receives an income of 150K, the institution he attends would be on the hook for an additional 9.5K in federal taxes. Ditto for likeness, or equipment contracts. 

And, if the Fair Pay to Play Act is enacted, and incomes are involved, there’s a strong possibility that the IRS might take a second look at how they classify athletic departments. Might that mean schools would lose their 501(c)3 not-for-profit status?

That would mean institutions could be on the hook for state and local categories of taxes; one of the big ones; property taxes.

Just think about the school’s golf course, football and baseball fields. That acreage is typically high-value land that would no longer enjoy the benefits of being protected by the 501(c)3 statute. Thus, taxed.

How about all the contributions that alumni give to schools? If the institution is no longer a not-for-profit, contributions wouldn’t enjoy tax deductible status.

Adding insult to injury, would income producing athletes be exempt from receiving say, Pell Grants? Probably. So, the 5k a year that those previously qualified athletes use to receive, will no longer be there.

So, if we multiply that out, using as an example, 110 of the 570 student-athletes at Clemson University that hypothetically are receiving Pell Grants, that would mean a loss of over a half a million dollars a year in scholarship assistance the school wouldn’t receive from the federal government.

How about the 500-pound gorilla that we haven’t mentioned yet; Title IX compliance issues. Especially when is pertains to comparable compensation regardless of gender. If the star center on the men’s basketball team receives a contract; or name, image, likeness payments, what the goose gets, so must the gander.   

So, to wrap this up; if you’re a non-revenue sport, be forewarned. The Fair Pay to Play Act is coming to a theater near you.

What happens to us, is up to wrestling’s leadership? But if it’s true that history repeats itself, we shouldn’t get too excited.   

The scariest part of all this; regardless of how good, or quickly wrestling acts, any changes will take years to bear fruit.

Unfortunately, the Fair Pay to Play Act tree already has buds.         

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One thought on “Wrestling Beware

  1. Hi Wade,

    It’s not fair everyone else gets all that money and the athletes don’t get paid diddly.

    As I think about it, if the football teams form their own organization, they are, in effect, forming their own club. Let all sports form their own clubs.

    It’s socialism to take from the revenue producing sports to give to the non-revenue producing sports. We can’t have socialism only when it’s to our benefit without having socialism when it’s not.

    If wrestling is to survive, it must expand its fan-base beyond the amateur wrestling family, or perish. The current amateur wrestling fan-base isn’t wealthy enough (I didn’t say big enough…size is irrelevant; wealth is everything) to keep amateur wrestling alive..

    If the UFC is revenue producing sport, figure out why. Find out what UFC fans want and copy what you can. If the amateur wrestling community doesn’t want amateur wrestling to become more like the UFC, find some other revenue producing sport to learn from.

    I congratulate you for seeing a problem exists. I fear you are too close to the amateur wrestling community to understand the problem or what to do about it. It’s hard to examine the forest when one is too close to the trees.

    As an example, trees hate fire. Forests, it has been learned, need fire to renew.

    It’s time to burn down some amateur wrestling trees, some cherished amateur wrestling beliefs, so the forest can renew.

    It’s pointless suggesting which cherished amateur wrestling beliefs need to be burned down. The forest we call amateur wrestling, as a whole, needs to burn down so a new forest, a new sport for high school and college athletes, can take its place.

    To really make progress, start a discussion which revenue producing sports could amateur wrestling learn from.

    Identify what fans of those revenue producing sports like.

    Discuss which features of those revenue producing sports, amateur wrestling could incorporate.

    In “How Wrestling Wins”, we are very good at discussing why wrestling loses. A manager will tell you, don’t bring me problems. Bring me solutions.

    What solutions have you got?

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