GLSELA Co-Director and Cleveland-Marshall Executive-in-Residence Peter Carfagna shares his thoughts on the National Labor Relations Board's (NLRB) decision that football players at Northwestern University were employees of the school, and have the right to unionize. Carfagna is chairman/CEO of Magis, LLC, a privately owned sports marketing, management and investment company, that includes family ownership of the Lake County Captains, Cleveland Indians Class A Affiliate, and was previously Chief Legal Officer & General Counsel of International Management Group (IMG).
This ruling, and the legal battle that will ensue, will be covered in professor Carfagna's Representing the Professional Athlete course offered during this summer's Great Lakes Sports and Entertainment Academy.
Did you expect this decision from the NLRB?
CARFAGNA: This NLBR ruling was a huge surprise, an upset victory by the union side of the competition here. I don’t think many close observers of the scene anticipated the result. It was a close call at best. They scored the first touchdown. To continue the football metaphor, the game continues because Northwestern is going to be appeal this surprising result.
What are the ramifications of this decision?
CARFAGNA: The whole legal world, not just the sports legal world, is watching this unionization effort. For the Teamsters and other unions, this is important for obvious reasons. When you micro it down to the world of college sports, it’s really a tectonic shift in how college sports would have to operate if this ruling is upheld.
If this ruling is upheld, does that guarantee that student-athletes will be paid?
CARFAGNA: Everybody’s jumping to that, but not necessarily. It would mean there would be negotiations, like with any collective-bargaining unit, and they would negotiate terms and conditions of employment. A big part of it is health and safety, and the feeling they are not adequately addressed under the current system. Negotiations would determine how to compensate the players in a fair way. The player would be right up there at the negotiating table, and then that becomes the ebb and flow of the negotiation, and who knows how that would come out?
Beyond this decision, what other relevant legal issues are the NCAA and student-athletes involved with that could impact future negotiations?
CARFAGNA: Certainly, there is the Ed O’Bannon case out there, with a $40 million settlement already over licensing and royalties from video games. So that’s $40 million that EA Sports and Collegiate Licensing have paid to be done with that suit. You don’t pay $40 million if there isn’t some merit, but the NCAA continues to defend that suit. So you’ve got one flank over here where you’ve got a huge liability staring at you right in the face on paying them for the use of their name, likeness, and image — that’s one problem they’d have to deal with at this hypothetical negotiating table.
There are also the concussion litigations that are pending against the NCAA. And thirdly, there are two putative class actions pending against the NCAA going from tuition, room, and board to “full cost of attendance,” which would mean anywhere from $2,000 to $5,000 or more per year per student-athlete. This harkens back to a $228 million settlement the NCAA entered into on that very same issue a few years ago. To me, all of those things would be on the table, and then the negotiations would likely replicate what happens between the NFL and its players’ association and the NBA and its players’ association, in which agreements would protect the NCAA from all this litigation under federal labor exemption.