Afternoon Presentation: Public Workshop on Competition in Labor Markets 4 of 7

Afternoon Presentation: Public Workshop on Competition in Labor Markets 4 of 7


MR. DELRAHIM:
Good afternoon. It is — I hope you guys
have had a good session this morning, and looking
forward to an exciting afternoon. It’s my distinct honor to
introduce our speaker this afternoon. Ramogi Huma. Ramogi and I are friends. He was a guest lecturer
at least once or twice at my class at Pepperdine
a few years ago. And he himself, he’s a
player — he was a former UCLA football player who
played in the ’99 Rose Bowl team. Unfortunately for Bruin
fans, Wisconsin won. But he played from I
think ’95 through ’98. And he founded and is the
executive director of the National Collegiate
Players Association, which is a 501(c)(3) advocacy
group comprised of over 20,000 Division I college
athletes from over 150 campuses. He has held numerous
meetings in Washington and state capitals around
the country and he I believe led the effort a
few years back with the steelworkers union when
they were trying to get recognition for the
collegiate players as a union. He’s an incredible and
inspirational speaker. And he has singlehandedly
moved this ball forward. He has provided the
Justice Department with a lot of assistance in the
various investigations that the division has
had, including the NCAA’s one-year scholarship
limit, as well as as a consultant on the
athletes’ rights antitrust cases in White v. NCAA, Agnew, the O’Bannon
and the Jenkins case. A number of these cases
continue, but a lot of what we’re seeing in some
of the changes and the debate with respect to
athletes’ rights is as a direct result of Ramogi’s
efforts and a number of folks. Ramogi, please join us on
the stage, and I want to welcome you to the Justice
Department and thank you for your efforts here. (Applause.) MR. HUMA:
Thank you very much. MR. DELRAHIM: Absolutely. MR. HUMA: Good afternoon. First, I’d like to thank
the DOJ for having me here today to discuss
antitrust issues in college sports. I’m here today because
NCAA sports is a predatory economic cartel
that treats players like university property
rather than people. The NCAA does nothing
about the seriously injured, abused and
dead college athletes. Instead, instead of
action, the NCAA states loudly that it has no
duty to protect college athletes. In fact, they ruled that
Michigan State University team doctor Larry Nassar’s
multiple sexual assaults against Michigan State’s
athletes did not break NCAA rules simply because
there are no NCAA rules that prohibit the sexual
or physical assault of college athletes. But if any of those abused
athletes would have dared to benefit from the
economic rights afforded to everyone else, the
NCAA would have spared no expense to investigate
and punish them. That’s because the
primary role the NCAA sports is price-
fixing athlete pay. College sports is a $14
billion a year industry, produced by half a million
college athletes who are denied economic rights
and freedoms that would otherwise allow them to
receive an equitable portion of
their hard work. College athletes are
workers who, to this date, have no
worker’s rights. Meanwhile colleges
capitalize on their athletes’ blood, sweat and
brain damage to generate multibillion dollar TV
deals, multimillion dollar apparel deals, coaches’
contracts and invaluable marketing. However, the NCAA
imposes extreme player compensation restrictions
that are economically harmful to tens of
thousands of college athletes and leave over
80 percent of college athletes below the
federal poverty line. This NCAA price-fixing
is counter to America’s principles of
free enterprise. In addition, there’s
a strong civil rights concern given that
African-Americans compromise a
disproportionate percentage of athletes
in the revenue sports of football and basketball,
yet suffer the lowest graduation rates. The public is well
aware of these glaring injustices. A recent poll found that
84 percent of regular college students and
89 percent of college athletes feel that NCAA
sports exploit college athletes. The poll also found that
college athlete name, image and likeness
compensation was favored by 77 percent of regular
students and 81 percent of college athletes. Additionally, a Rasmussen
poll in March found that two-thirds of Americans
support college athlete compensation for use of
their name, image and likeness. And economists
understand as well. Ninety- two percent of
those surveyed by the University of Chicago
said that the system generates rents for
colleges at the expense of their athletes. Current and former college
athletes have stood up against the NCAA’s illegal
price-fixing rules in key lawsuits. Players proved in
both O’Bannon v. NCAA and Alston v. NCAA antitrust lawsuits
that the NCAA has been illegally price-fixing
player compensation. However, the courts
have allowed ongoing price-fixing for
compensation that isn’t tied to
educational costs. Austin v. NCAA is a current case and
has been appealed to the Ninth Circuit. The NCAA is hoping to
overturn the current ruling and the plaintiffs
are appealing for broader relief. And we agree with the
plaintiffs 100 percent. NCAA cartel conduct
continues to flaunt antitrust laws. And unless this ruling
is expanded to provide broader relief, the
NCAA will continue to price-fix players’
compensation. The NCAA has attempted to
justify its mockery of antitrust law. During the O’Bannon trial,
the NCAA’s lawyers stated that the NCAA is a cartel
that does good things, rather than a cartel
that does bad things. College athletes
beg to differ. I s organization
after my teammate was suspended
for eating groceries that were left on his doorstep
when he was broke and hungry. The NCAA suspended him
because it said he only received the food because
of this athletic name and prominence, which is
a violation of NCAA price-fixing rules. Meanwhile, the NCAA
was fully capable of capitalizing off of his
name because they were selling his jersey
in the store. NCAA’s assertions that
it only imposes well- intentioned price-fixing
have been exposed as false. I’ve made handouts
available on the table to refute these NCAA
arguments with facts and data. But at the end of the
day, our nation’s antitrust laws and
principles of equal rights can’t be subject to
whether or not a cartel thinks its illegal
activities are well-intentioned. Another antitrust issue of
great concern is that the NCAA facilitates collision
to restrict players from transferring from one
school to the next. The NCAA actually gives
players’ current schools veto power over
transfers. Additionally, college
athletes that participate in football, basketball,
baseball and ice hockey must sit out a year after
they transfer, while other sports do just fine
without this penalty. Essentially, and with
few exceptions, the NCAA imposes a national
collusive non-compete agreement against players. My organization, the
National College Players Association, believes that
all players should be able to transfer one time
in cases of abuse and when a head coach leaves
without NCAA punishments or non-compete
restrictions. In 2005, the collusive
agreement harmed University of Illinois
women’s basketball players who publicly detailed
various forms of abuse by holding them out for six
games after they fled to another college. This summer, the agreement
harmed University of Illinois football player
Luke Ford, who was denied a transfer waiver. Ford transferred from
Georgia, where he could have been a starter,
to the University of Illinois to be closer to
his ailing grandfather. But the NCAA
denied his request. The NCAA has taken it
upon itself to determine that his grandfather’s
poor health isn’t a good enough reason to transfer
since his grandfather is not part of his
nuclear family. The NCAA also denied the
transfer waiver request from Virginia Tech
football player Brock Hoffman, who transferred
from Coastal Carolina to help his ill mother. Apparently her brain
tumor, impaired vision, facial paralysis and
hearing loss did not outweigh Coastal’s claim
on Hoffman’s labor. Both Ford and Hoffman
would have been free to participate if all
athletes were allowed to transfer one time
without punishment. The collusion to restrict
player transfers comes at a great physical toll
to college athletes. The NCAA’s own survey
found that 50 percent of Division I athletes, the
trainers, the athletic trainers, knowingly return
players with concussions to the same game. This is horrific, given
all that we know about chronic traumatic
encephalopathy, also known as CTE, a brain condition
linked to contact sports that could bring on
memory loss, impulse control, depression
and suicide. The National Athletic
Trainers Association found that almost 60
percent of athletic trainers are pressured by
coaches to make medical decisions that are not
in the player’s best interest. Six medical associations
jointly published the team physician consensus
statement declaring that college athletic staff
have a financial conflict of interest that puts
players’ health at risk. Players should not be
trapped at abusive or negligent athletic
programs because of NCAA transfer restrictions. This environment
contributes to a lifetime of medical expenses, as
50 percent of former college athletes suffer
chronic sports-related injuries. All of this underscores
the need to end NCAA collusion that takes
away players’ freedom to transfer. Included among the harmful
collusion in NCAA sports are rules to stifle
players’ eligibility to secure legal
representation, aka sports agents. Murderers, murderers are
guaranteed the right to full legal representation
in America. But college
athletes not. The NCAA also blocks
players’ ability to complete their college
athletics eligibility even if those athletes reject
a professional league draft offer. However, the NCAA has
already demonstrated that the industry can function
just fine with less restrictive alternatives. For instance, high school
recruits playing baseball and ice hockey can
have sports agents. And the NCAA adopted a
new rule to allow men’s college basketball
players to do the same thing. As for professional
drafts, baseball and ice hockey players who are
drafted out of high school are allowed to play in
NCAA sports if they choose to decline their draft
opportunity and play in college instead. The NCAA’s new rule also
allows men’s college basketball players who
enter the NBA draft and are not drafted to stay
in college and complete their NCAA eligibility. The collusion that
prevents players of all sports from exercising
these freedoms cannot be justified when it has
been demonstrated as unnecessary in various
sports currently within the industry. If the NCAA truly wants
college athletes to be treated like regular
students and graduate, then it should allow
them to secure legal representation and
stay in college. Clearly the NCAA and its
colleges have been bad actors when it comes to
the treatment of college athletes. To date, college athletes
have been forced into second-class citizenship. No other college student
risks a group boycott by thousands of colleges for
daring to earn money or transfer. This takes place in one
of the most high profile industries on the planet
right before our very eyes. Fortunately, developments
among some state legislatures may bring
impactful reform in some of these areas. My organization, the
National College Players Association, is a
cosponsor of California Senate Bill 206, the
Fair Pay to Play Act. The Fair Pay to Play
Act would allow all California college
athletes to secure sports agents and receive
compensation for use of their name, image
and likeness without punishment from their
college, conference or the NCAA. The bill has complete
bipartisan support and was approved 72-0 in the
assembly and 39-0 in the senate. It’s now on the
governor’s desk. Legislation similar to
California’s Fair Pay to Play Act was introduced
with bipartisan support in the state of Washington,
Colorado and the U.S. House of representatives. Most recently, a name,
image and likeness compensation bill was
introduced in New York and state lawmakers in South
Carolina announced a commitment to introduce
a similar bill in their upcoming
legislative cycle. My organization will do
all that it can to make sure that this bill gets
introduced in as many states as possible. In response to the
California Fair Pay to Play Act, the NCAA
submitted letters from its leadership essentially
threatening California with an illegal national
group boycott in which all other NCAA colleges
would be prohibited from competing against
California colleges. You can bet that the
NCAA will make this same threat against other
states as well. Such action would be a
violation of both federal and California
antitrust laws. Neither the U.S. Congress nor the state of
California have granted the NCAA an antitrust
exemption that it would need to take such an
action, nor should they. The NCAA is signaling
that the Dormant Commerce Clause would render the
Fair Pay to Play Act unconstitutional. It points to a
precedent in Miller v. NCAA, a court ruling that
the NCAA won regarding its due process rules. However, the
1992 Miller v. NCAA ruling examined
uniform NCAA due process rules and does not apply
to today’s non-uniform player compensation
arrangements that exist throughout NCAA sports. One of the pertinent
questions to ask about the Dormant Commerce
Clause is, one, does the Fair Pay to Play Act
discriminate against other states. The answer is on. The bill does not attempt
to require out-of-state colleges to allow player
compensation nor does it prevent other states and
colleges from choosing to allow player compensation. It does not prohibit
California entities from competing against
out-of-state colleges or participating in NCAA
sports and it does not exempt California
entities from complying with the provisions
of this bill. The second question to ask
is dose the local benefit outweigh any
industry burden. The answer is yes. California has a vested
interest and compelling interest in ensuring
college athletes have equal rights to legal
representation, economic freedoms and antitrust
protections afforded to other students and
residents in the state. This bill would not create
an industry burden. It does not require
colleges, conferences and athletic associations
to compensate players. It would reduce industry
regulation by decreasing the burden of complying
with and enforcing NCAA compensation
prohibitions. And the third question to
ask is, is there a need for uniform player
compensation in NCAA sports. The answer is no. Player compensation in
NCAA sports already varies dramatically. For example, the Ivy
League, a Division I conference, prohibits
athletic scholarships while other Division
I colleges provide five-year athletic
scholarships. This means that a player
at an Ivy League college receives no money while
a player on a five- year scholarship at a private
school can get over $300,000. And yet these two economic
systems compete on the court every March
without harming demand. The NCAA also granted the
Power Five conferences autonomy to make many
of their own rules for player compensation, while
denying other Division I conferences the
same autonomy. There are also tremendous
differences in player compensation amounts among
players on the same team. Teammates can receive a
full scholarship, partial scholarship or no
scholarship at all. And some players are
permitted to receive Olympic prize money, like
the University of Texas swimmer Joseph Schooling,
who won $753,000 in 2016 from his home country of
Singapore for winning a gold medal. The NCAA does not claim
that all of these differences in player
compensation is a burden on its industry. In conclusion, it’s my
hope that this is the beginning of a continuing
dialogue with the U.S. DOJ antitrust division
about serious antitrust issues in NCAA sports. Specifically, the
National College Players Association would
like the U.S. DOJ to consider the
following actions to protect college athletes
and uphold the integrity of federal antitrust laws. First, to file an amicus
brief in support of players in Alston v. NCAA; second, open an
investigation into the possibility of challenging
NCAA restrictions on players’ transfer freedom,
their ability to secure sports agents and their
ability to decline a draft position to complete
their college sports eligibility; and three,
open an investigation into the NCAA’s public
threats of an illegal boycott against
California colleges over the Fair Pay to Play Act. Thank you all very
much for having me. (Applause.)

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