American Council on Education et. al. Defend NCAA’s Educational Mission

The Third Circuit will hear oral arguments next month in Ralph “Trey” Johnson vs. National Collegiate Athletic Association, a case in which plaintiffs allege that student athletes are employees under federal law, and thus should be paid compensation.  I read through the briefs because of my general bias in favor of the conclusion, like that strongly implied  in National Collegiate Athletic Association v. Alston, that the NCAA is anything but nonprofit or deserving of tax exemption.  But the American Council on Education’s brief in Support of the NCAA (ACE Amici Brief) makes a very strong case that the NCAA really is engaged in a charitable mission, notwithstanding the incredible revenues and coaching salaries paid in Division I football and basketball.  Maybe the NCAA and some coaches should pay taxes on excess benefits, but ACE almost convinces me that I have just been hating on football and basketball salaries all along.  ACE’ argument resonates with me because my daughter — pictured below with a swing that makes me wonder if I am even her biological father — played college golf at the D-1 level; she put in long hours and certainly she and her teammates never made a dime in NIL or even ticket sales.  She had a four year golf scholarship, that’s it.  The only walking around money came straight from my pockets!  I am pretty sure her experience was much more typical than football and basketball players in the Power 5 conferences.  But her college golf complimented her academic studies immeasurably.  She graduated last spring and I think that swing of hers even helped her get a job in the oil and gas industry.  Collegiate golf pays even if your dad is not Tiger Woods, though who really knows in this case?

The ACE brief makes me seriously reconsider my position that the NCAA ought to be stripped of its tax exemption.  In addition to some excess benefit taxes on coaching salaries, maybe we should just have a private foundation-like excise tax on certain public charities (i.e., non-private foundations) that reach a certain amount of revenues or retained earnings, or something.  Anyway, here are excerpts from the  ACE Amici Brief.

PRELIMINARY STATEMENT

This lawsuit is built on a false narrative that student-athletes are exploited by colleges and universities for profit. In reality, only about 2% of the NCAA’s 1,100 member institutions had athletics departments that generated enough revenue to cover operating costs in 2019, and the overwhelming majority of the 500,000 student-athletes in the NCAA participate on teams that generate little or no revenue. Those facts should not be surprising given that intercollegiate athletics is not a business but rather a mosaic of programs that, at their core, enrich students’ educational experiences.

The colleges, universities, conferences, and governance organizations that oversee intercollegiate athletics have always emphasized the primacy of education for student-athletes and the contribution to their education that participation in intercollegiate athletics offers. Indeed, student-athletes graduate from four-year colleges and universities at a higher rate than their non-athlete counterparts. Athletics programs have long played a crucial role in a student-athlete’s education. Among other things, student-athletes learn valuable lessons about teamwork, discipline, sportsmanship, and time management. They also receive unique opportunities to engage with their student community, participate in a significant aspect of campus life, and serve as formal and informal leaders among their peers and representatives of their universities.

ARGUMENT

The college years are a period of tremendous learning and growth. University attendance represents the first time many students venture out on their own, living independently of parents and caretakers. This formative time offers students a new level of autonomy, allowing them to guide their own development as scholars and adults. They choose not only their fields of study but also the activities they participate in, the communities they join, and how they lead their daily lives on campus.

Accordingly, a critical part of the educational mission of institutions of higher education is providing a rich array of learning opportunities and experiences beyond academics. Students can typically aspire to participate in many extracurricular offerings. For example, they can write for a student newspaper; sing or play an instrument in a student musical group; involve themselves in their school’s civic life through student governance; participate in political, social, or faith-based student organizations; or join an athletics team, to name a few. Participants in extracurricular activities often are called on to commit significant time and effort on top of their coursework and embrace that opportunity with passion and fervor. In return, they learn life lessons and skills not readily gathered in the classroom– lessons about leadership, time management, and community engagement. They also benefit from the structure and social connections that come with their membership and participation in these pursuits. And student participants become more well-rounded individuals, who are more likely to succeed academically in college and professionally following graduation. See Anne E. Lundquist, The Essential Role of Co-curricular Programs in Student Success, Retention, Persistence, and Graduation, Anthology (2020) (collecting sources showing that student co-curricular and extracurricular participation is associated with increased student retention, satisfaction, and academic and post-graduation success); Peter Chalfin et al., The Value of Intercollegiate Athletics Participation from the Perspective of Employers who Target Athletes, 8 J. Issues in Intercollegiate Athletics 1, 3-4 (2014) (collecting literature tracking additional benefits specifically for student-athletes).

Participation in intercollegiate athletics is demanding and requires commitment, to be sure. But it provides all of the benefits of extracurricular activities and more. Studies show that being a student-athlete builds self-confidence and imparts unique lessons about teamwork, self-discipline, and physical fitness. See Erianne Allen Weight et al., Holistic Education through Athletics: Health and Health-Literacy of Intercollegiate Athletes and Active Undergraduate Students, 1 J. Higher Ed. Athletics & Innovation 38, 50-52 (2016). Further, as key participants in an integral aspect of student community life, student-athletes are often viewed as campus leaders of their educational institutions. Student-athletes thus report holding more leadership roles in student organizations, having meaningful mentor relationships at higher rates, and “thriving” in areas of social, community, and physical wellbeing following graduation. Gallup, A Study of NCAA Student-Athletes: Undergraduate Experiences and Post-College Outcomes at 2-9, 18-19, 21 (2020).

Those benefits underscore that intercollegiate athletics are central to the educational mission of colleges and universities, not outside it. Unlike professional sports, whose primary purpose is to generate profits, the various intercollegiate athletics teams at issue in this case exist to provide students with valuable opportunities to pursue development outside the classroom, enriching their college experience. See Weight et al., 1 J. Higher Ed. Athletics & Innovation at 50 (“personal development” and “citizenship” stemming from athletic experiences “are concepts difficult to teach, but fundamental to holistic student development”). Like student musicians, student newspaper reporters, student-body presidents, and student volunteers, student-athletes are students first, notwithstanding the time they commit or the benefits they derive from their additional activities.

For most student-athletes, participation in intercollegiate athletics is the culmination of their long-running competitive dreams and aspirations. Only a small fraction of student-athletes expect to have a professional career playing sports. See Nat’l Coll. Athletic Ass’n, NCAA Recruiting Facts (Aug. 2020). There is a unique joy of comradery and competition, and a sense of pride, that student-athletes can derive from participating in intercollegiate athletics. If colleges and universities curtail or end athletics programs because they are forced to pay wages to their student-athletes that they cannot afford (see Point IV, infra), it would have a devastating impact on generations of young people who would lose the opportunity to compete in college.

This pursuit of intercollegiate student-athlete opportunities is something that high school students do voluntarily and embrace in college out of self-interest. Significantly, more than 40% of Division I students choose to play on their school’s team without receiving any athletics scholarship money. See id.

darryll jones