Paying College Athletes Seen Hurting Sports’ Popularity

The former president of CBS Sports, testifying in defense of the National Collegiate Athletic Association’s refusal to share billions of dollars in revenue with players, said paying the athletes would jeopardize the popularity of college sports.

Neal Pilson, who now runs a sports television consulting firm, was called today as a witness by the NCAA at a trial in Oakland, California, to counter earlier testimony by a Stanford University economist that the NCAA is a cartel that blocks competition in violation of antitrust law.

“Paying players, it is my considered judgment, would have a negative impact on the public’s opinion of those sports,” Pilson told U.S. District Judge Claudia Wilken, who is hearing the case without a jury.

The lawsuit brought by former University of California at Los Angeles basketball player Ed O’Bannon, if successful, would force the NCAA to allow student players to seek payments when their games are televised. Current NCAA regulations treat athletes as amateurs, who can be stripped of their scholarships and barred from playing if they accept payments.

The NCAA had $912 million in total revenue last year, including $838 million from television, championships and marketing rights fees, according to its financial statement.

Professional Sports

O’Bannon’s lawyers contend college athletics is as commercialized as professional sports, with billions of dollars going to the NCAA, universities, coaches and facilities -- everywhere but into players’ pockets.

O’Bannon, who was Most Outstanding Player of the 1995 Final Four, is featured in DVDs about UCLA games and the 1995 championships offered for sale by the NCAA, according to his complaint. He’s suing on behalf of a class of current and former players seeking to negotiate licensing deals for use of their images.

Pilson said compensating student athletes risks disrupting the public enjoyment of amateur athletics and spurring recruiting price wars.

“I have a substantial concern that it would change the fabric of the sport,” he said. “People have the concept of college players playing the sport for the joy of the game. Paying would convert this into just another pro sport.”

The prospect of recruitment battles among top schools is “distressing,” he said.

‘Land Rush’

“You would have a land rush of recruiters rushing to sign high school seniors and juniors,” Pilson said.

Roger Noll, the Stanford economics professor who testified this week as an expert witness for O’Bannon, said that if student athletes could license their names and identities, many would choose to let universities negotiate group licenses on behalf of their teams. The schools would then offer stipends based on the proceeds from those licenses, and use those payments as bargaining chips to attract the best talent, Noll said.

Pilson was asked by an NCAA lawyer to respond to Noll’s estimate that some players could be paid $1 million.

“Sums of that nature and larger, getting top athletes to go to top schools, to get the best player you have to have the best coaches and that would drive up pay,” he said.

Cross-Examination

On cross-examination, a lawyer for O’Bannon tried to get Pilson to quantify how much compensation for college athletes is too much.

“Suppose the University of Michigan decides it can pay players” based on the license-imaging revenue they generate, he said. “It pays a quarterback $1 million and a running back $500,000. I think that would have an impact on the public perception of sports.”

“Where do you draw the line?” asked William Issacson, the plaintiffs attorney. “Would $25,000 bother you?”

“It would depend on which teams and how it was distributed,” Pilson responded. “One million dollars would trouble me and $5,000 wouldn’t. That’s a range.”

Asked about the concept of a trust fund for student athletes, Pilson said, “I am not as troubled, not to the extent of large amounts of cash money moving to players who are 18 years old.”

The case is In Re NCAA Student-Athlete Name and Likeness Licensing Litigation, 09-01967, U.S. District Court, Northern District of California (Oakland).

To contact the reporter on this story: Pamela Maclean in Oakand, California at pmaclean2@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg, Joe Schneider

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