What can Penn State Athletics do in response to the recent SCOTUS rulings? What should it do?

Providing Enhanced Educational Benefits for Student-Athletes

There has been an abundance of confusion regarding the recent ruling by the Supreme Court in the case against the NCAA. This ruling has often been conflated with the “Names Image and Likeness” (NIL) legislation that now allows student-athletes to profit from the use of their notoriety as athletes. But NIL issues are being regulated by various state laws – not the Supreme Court ruling. What the Supreme Court (SCOTUS) case dealt with is something different.

What the SCOTUS ruling did was eliminate existing NCAA limitations that restricted the EDUCATIONALLY-RELATED benefits that student-athletes can receive from member universities. Those limits essentially limited those benefits to providing waivers of tuition and room and board charges, along with reimbursement for books and supplies, while the student-athlete was eligible to compete in athletics.

Perhaps even more important than the ruling itself was the manner in which the SCOTUS issued the ruling. The SCOTUS made it clear that they felt that the NCAA and its member institutions have been acting with greed and self-interest with respect to College Sports revenues – and that the SCOTUS may look favorably on future cases regarding the ability of student-athletes to receive a bigger share of the sports revenue pie (future actions which could drastically alter collegiate athletics as we have known them).
As Justice Kavanaugh wrote:
”The bottom line is that the NCAA and its member colleges are suppressing the pay of student athletes who collectively generate billions of dollars in revenues for colleges every year. Those enormous sums of money flow to seemingly everyone except the student athletes. College presidents, athletic directors, coaches, conference commissioners, and NCAA executives take in six- and seven-figure salaries. Colleges build lavish new facilities. But the student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds, end up with little or nothing.”

So, the ruling created two large concerns for the NCAA, and universities like Penn State: How to deal with the lifting of educationally-related benefits restrictions, and how to defend the long-standing argument that university athletic programs are operated for the benefit of the student-athletes – and not overwhelmingly for the benefit of Administrators and Coaches.

So, what could – and should – Penn State do in response to the ruling?

There are two issues at hand here: One is the issue of what is the right and proper thing to do, the other is what actions might allow the NCAA (and universities like Penn State) to move forward proactively to defend and preserve revenue-generating athletic programs in some semblance of their current form.

Penn State, and its colleagues, can move toward satisfying both of those goals by implementing changes that shift college athletics – and college athletics revenue – back in the direction of supporting student-athletes, and their educational pursuits.

Penn State should:
Grant all scholarship student-athletes an additional two years of scholarship (full cost waivers for tuition and room and board) for all student-athletes, which they can use AFTER they have exhausted their athletic eligibility.

Reasonable parameters would be to make these scholarships available to all student-athletes who have exhausted their athletic eligibility while remaining in good academic standing at the University. And to give those student-athletes some reasonable time frame – perhaps 5 years after exhausting their eligibility- to initiate their additional scholarship benefits.

The positives of such a policy are many, including that it is simply the right thing to do for the student-athletes, and the academic integrity of college athletics. It would also serve to benefit the self-interests of Penn State and Penn State Athletics.

But before outlining some of those benefits, it may be useful to look at the current state of Penn State Athletics in light of Justice Kavanaugh’s opinion for the SCOTUS.
Justice Kavanaugh might very easily have been reading Penn State Athletics’ financial statements when he stated that:

“Enormous sums of money flow to seemingly everyone except the student athletes.”

Currently, Penn State Athletics generates over $170 million per fiscal year. Much of that revenue, and the fastest-growing portion of that revenue, has come in the form of increased revenue from TV contracts to broadcast College Football and Men’s Basketball games.

At Penn State, less than 13% of all athletics revenue – generated largely through the performance of student-athletes – is spent to provide scholarships and educational opportunities to those student-athletes.

And, at that, those expenses are not actually even outflows of funds from the University. Those “expenses” are ledger transfers from one portion of the University – the Athletic Department, to another portion of the University – the General Fund, as a means of having the Athletic Department “pay for” the scholarships. In actual fact, the true expenses incurred by the University for the benefit of the student-athletes is far less than the 13% figure from the financial statements.

Instead, Penn State has used that revenue windfall from TV contracts to engorge administrative staff and swell coaching contracts (expenses wherein the dollars ARE actually leaving the University – and into the pocketbooks of administrators, staff, and coaches – and not simply moving from one university ledger to another). Penn State spends nearly 50% of total Athletics revenues on salaries for administrators, staff, and coaches. Those expenditures – particularly for Administrative Staff – have exploded in recent years (Administration Salary Increases 157%, Coaches Salary Increases 130%).

It is important, I think, to understand these contextual issues surrounding Penn State Athletics’ finances, which are not structurally dissimilar to the finances of many of Penn State’s cohorts, to understand why the SCOTUS ruled the way they did.
As Justice Kavanaugh said: “enormous sums of money flow to seemingly everyone except the student athletes”

It also is helpful to understand the current situation, in order to evaluate the benefits and righteousness of a plan to provide more robust educational benefits to the student athletes. Simply re-directing as little as 10% of current administrative, staff, and coaching expenses would fully fund the total costs of such a program (keeping in mind, we are talking about just a 10% reduction from salary levels that have increased by over 140% in recent years). It would NOT require any funds to be redirected from outside of the Athletics department, or require fans and boosters to pay higher costs for tickets and other purchases.

What would the benefits of a more robust educational benefit be?

From the standpoint of the student-athlete it would provide an enhanced opportunity to undertake rigorous and rewarding academic pursuits – in-line with those of the student body as a whole. While some student-athletes currently manage to pursue rigorous degree programs – while participating in demanding and time-consuming athletics activities – most do not (particularly in the largest sports program, college football).

As with most large universities, Penn State is composed of numerous “colleges”, each with varying degrees of academic requirements – reflected in the required minimum GPAs for admission, and the required number and types of credits required to earn a bachelor’s degree. The three largest colleges at Penn State, with enhanced GPA academic requirements, are the Colleges of Engineering, Science, and Business (and those three colleges enroll over 1/2 of all Penn State undergraduate students). Over the last ten years, Penn State Football has recruited and enrolled over 200 scholarship football athletes – none of them have earned a degree in Engineering, or in Science – and only three have earned degrees in the College of Business.

Higher, and more rigorous, academic requirements would appear to be incompatible with the simultaneous heavy, year-round time demands of such athletic competition.

Allowing former student-athletes to pursue their academic goals – without having to balance those academic pursuits with the extensive demands of NCAA athletic competition and training – is simply the right thing to do. A significant investment to benefit student-athletes, in return for their efforts in generating the revenue, is a much fairer allocation of the revenue their efforts produce.

In addition, such a program would present clear and meaningful benefits for Penn State Athletic programs. A meaningful academic benefit would serve as an enticement for prospective student-athletes to select Penn State as their school of choice. This would be particularly attractive for those prospective student-athletes who place great value in the benefits of a higher education – the types of student-athletes that Penn State claims to value.

Also, especially in light of the NCAA’s recent regulatory changes which have made “transferring” from one university to another more attractive to the student-athlete (and has led to Penn State having one of the highest “transfer-out” rates of any of the Power 5 athletic programs), such a program would incentivize student-athletes to remain committed to their studies, their athletic program, and their teammates at Penn State. By rewarding those student-athletes who remain at Penn State throughout their academic/athletic careers, both the student-athlete and the athletic program benefit.

It is time for Penn State, and all major university athletic programs, to put up or shut up with regard to the oft-spoken narratives about the importance of the “student” part of the student-athlete experience. If Penn State, or any other major university, wishes to walk the walk with regard to the voluminous talk they give to the importance of the educational aspect of “student-athlete-ism”, a meaningful commitment to providing greater access to a robust educational experience should be Priority #1.

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