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Today on "Sports Files" we look
at some of the pressing legal
issues surrounding
intercollegiate athletics,
including the attempt
to unionize athletes at
Northwestern University, and
I do so with Memphis Labor
Attorney David Prather.
[theme music]
Each week on "Sports
Files" our goal is
to both entertain
and educate.
And today we'll be going to
school on some major issues that
could turn collegiate
athletics inside-out.
But first, the Grizzlies are
looking to eliminate the Thunder
from the post-season as the
teams are going at it this
evening at FedExForum.
Tuesday night in Oklahoma City
the Grizzlies nipped the Thunder
100-99 in overtime
to take game five,
and grab a 3-2 lead in their
first round Western Conference
playoff series.
This incredible best of
seven set has produced four
consecutive overtime games.
In the win Tuesday, the
Grizzlies blew a 20 point lead
and survived a late game
meltdown only to roar back and
win their third
overtime game in the series.
Of course the last play was not
without drama as Kevin Durant
missed a three point attempt
and Serge Abaci's putback at the
buzzer, which would have
won the game for O-K-C,
was ruled to have come
after the red light went on.
If the Grizzlies win tonight
they take the series and move
into round two.
If the Thunder can
stave off elimination,
they will force a
decisive game seven on Saturday,
back in Oklahoma City.
It's also with heavy hearts that
the Grizzlies battle the Thunder
as former team owner
Michael Heisley passed away last
weekend.
Later in the show we'll look
back at the colorful former
owner of the Grizzlies and show
you why he cared so much for the
Memphis community.
But first the ever changing
landscape of amateur sports on
the collegiate level.
And just how long will we be
able to continue to say that?
David Prather is a Memphis
Attorney who deals in labor law.
He has considerable experience
with Fair Labor Standards Act
litigation, including collective
class actions and represents
employers in department of labor
wage and hour investigations.
In 2008, he was appointed by the
Bush administration to serve as
senior advisor to the
administration of the wage and
hour division of the U.S.
Department of Labor.
Today David Prather lends his
expertise on a number of issues
including Northwestern's
scholarship Football players
unionizing and what impact
it will have if it clears all
hurdles.
Plus the need for fundamental
reform with the N-C-A-A and the
pressing Ed O'Bannon class
action anti-trust lawsuit
against the N-C-A-A.
Get out your notebook ready
because class is in session,
and it's next on "Sports Files."
[theme music]
Well David,
thank you so much for
joining us today.
Appreciate you having me.
Glad to be here.
Let's update everybody
where we stand with the case at
Northwestern University with
the football players voting on
unionizing.
Sure.
So in March of this year,
the regional director of the
National Labor
Relations Board, the N-L-R-B,
ruled that the Northwestern
scholarship football players are
employees and would be
eligible to form a union.
And regional director also
directed that an election be
held on April 25th.
Following that ruling,
Northwestern has appealed that
ruling to the full N-L-R-B to
the board in Washington D.C.
And N-L-R-B has
accepted that appeal.
And in doing so also said
that the ballots -- the election
would go forward but the
ballots would be impounded.
So since that time, we've had..
April 25th has passed.
The right has been held and the
ballots are going to sit there
until the N-L-R-B
rules on this appeal,
which could be, you know.
This is an important issue.
They know it.
They're gonna take
their time on it.
So it could be likely
the end of the year,
maybe even early part of next
year before we even find out,
you know, what the ruling is
from the N-L-R-B and if they
rule in favor of the employees
or the athletes as the case may
be then what the
election results will be.
Well my question is this.
Why impound the votes?
Can't you settle a lot of things
and save a lot of time if you
look at the votes, if they
come up short and they turned it
down, they voted it down?
Then you save all
that process, don't you?
I think they just want an
election that is clean and
doesn't have -- isn't tainted by
any kind of ruling that may come
out.
And they want to be able to make
a ruling that's not tainted by
the outcome of the vote.
What are the advantages and
what are the disadvantages of
athletes basically becoming
employees while going to school
as scholar athletes?
What are the pros and cons?
Well certainly
from the cons side,
you know, there's
the university.
Their position is going
to be this is a team.
There needs to be team unity.
They need to have
-- be acting as one.
And when you bring a third party
in to being intermediary between
the coaches and between the
players that that's not a good
thing and could put them in a
competitive disadvantage versus
other teams.
So you know that's the cons.
And apart from any issues
also related to amateurs,
I mean whether we believe in
athletes should be paid or
whether they
should be, you know,
it should be more of a pure
system to the extent if that's
possible.
You know some of the cons is you
see overtime college football
become more and more
commercialized and mroe and more
of a business.
You know there's a feeling out
there that these players are the
only ones who don't really have
a say in how what their role is.
There's a lot of
money being made in the,
you know, billions of
dollars on college athletics.
And the athletes
don't have a say.
And this is a possible way to
get them a seat at the table.
Is there a model for this
anywhere else in the world with
their amateur athletes?
Because we know in
Europe and other countries,
we don't hear a lot
about amateurism.
They play professional athletes
even for years and years in the
Olympics.
You know I'm not
aware of anything,
you know.
The closest model as far as a
unionization situation would
obviously be professional
sports where they are unionized.
But as far as amateurs being
unionized or just amateur sports
in general, I'm not aware of it.
The tax ramifications..
I mean it's easy to talk about
wanting the backing of a union
but when you are a collegiate
athlete and now all of a sudden
you become an employee and
you think well that's great.
There's the benefits.
We just talked about
the pros and the cons.
But one of the
cons could be taxes.
You may be owning the money that
they are giving you through a
scholarship.
So what about that?
Be careful what
you wish for, right?
Yeah, in the case
of Northwestern,
their scholarships are valued
at upwards of $75000 a year.
And so the tax on that
would be substantial.
Currently under the I-R-S rules,
a scholarship is not taxable
unless it is a scholarship
that is given in an exchange for
services rendered.
And that's the very nature of
the N-L-R-B's ruling is that
these student athletes or
if their ruling stands.
Employees are playing football
in exchange for getting the
scholarship.
And so there could be an
argument that would be taxable
because that's a scholarship
provided for services rendered.
Now the I-R-S is not going to be
bound by what the N-L-R-B says.
But if they agreed with it
and wanted to follow that same
logic, then you could see a
situation in which it was taxed.
But you can't say for
certain at this point.
Will this be the
process for any other school?
Right now it's private schools.
And I want you to explain why it
would not affect public schools.
But would this be the same
process if Stanford wants to go
through with this, Duke
wants to go through with this?
Yeah.
So if CAPA, which is the
organization that's attempting
to unionize Northwestern wanted
to go after Stanford tomorrow,
they would first have to go
and show that there is enough
football players who want to
be represented by a union.
And you do that by getting
card signed saying I wish to
represented for bargaining
purposes by this union.
And you have to get 30% of
the football players to sign.
So they first
have to go do that.
They then take that to the
N-L-R-B and say we want an
election.
And in this case, if the N-L-R-B
were to uphold the regional
directors ruling, they'd already
have that feather in their cap.
They wouldn't have to prove
that like the CAPA did in the
Northwestern case.
So and then from there, they'd
certify an election and they'd
have to then prove that they
have to win that election by
getting over 50% of the
scholarship football players to
vote in favor of the union.
So similar process but slightly
easier if the N-L-R-B obviously
were to uphold the regional
directors willing that they are
employees.
You know as far as..
So that's the route for
private school right now.
In the case of public schools,
the law that governs this is the
National Labor Relations Act.
And that's what the law that
gives employees the right to
unionize.
That does not
apply to the states,
to state government.
So a state school would not.
You would not be able to
unionize a state school under
the National
Labor Relations Act.
Some states though have their
own labor laws that would allow
for unionization
under state law.
And that's kind of just going to
be a patch work of laws that's
going to vary
from state to state.
Does Tennessee allow it?
You know I'm not sure.
I haven't looked at it.
I don't believe they do.
It's going to be less
common in your southern states.
So that could obviously affect
the University of Memphis,
University of Tennessee if
they went down this route.
Vanderbilt's a private school.
Of course they could do
what's happening right now at
Northwestern.
I want to show
everyone a graphic right now.
This kind of goes back to March
26th after the N-L-R-B decision,
the original decision.
This comes from U.S.
Senator Lamar Alexander, the
senior Republican and on the
Senate Health Education
labor Intentions Committee.
Quote -- I'm sure
you've seen this quote.
Your comments?
Well you know I
think that's your..
We don't now how
it's going to turn out.
But that's your worst case
scenario that the kind of labor
strike that you often get and
the tension that you get in
labor relations would follow in
to college football or college
basketball.
You know, strikes,
tense negotiation sessions.
You know, those
type of situations.
You know it would be naive to
think that it couldn't happen.
On the other hand, you
know, anytime you've moved from
amateurism to
professionalism or you've,
for instance, people thought
that it might be the demise of
the Olympics when we start
allowing professionals in to the
Olympics.
And when free agency has
been introduced in to certain
professional sports.
There was certainly dooms
day scenarios put out there.
So nobody knows.
But I do think that the
potential for labor disputes
that could fundamentally change
the game and fundamentally
change the relationship between
player and coach and player and
university is very real.
I don't think it's unrealistic
to think that that worse case
scenario that he
describes could occur.
At Northwestern,
we're talking football.
Senator Alexander just
mentioned basketball.
Are we talking about only sports
that are revenue making sports
or can a softball
try to unionize?
Can a badminton
team try to unionize?
How far does it go?
Well the way that the regional
director in Chicago that wrote
on the Northwestern case,
the way his opinion read,
I don't think it would preclude
a non-revenue sport from
unionizing.
As long as they were
receiving, you know,
value for their
services, you know,
the argument that they
are employees could apply.
But that particular ruling
related solely to the football
players at Northwestern.
So if somebody tried to
unionize a non-revenue sport,
they would have to, you know,
they would likely have to go
through that kind of hearing
again to determine whether that
particular sport
is an appropriate,
whether those players on
that particular team at that
particular school are employees.
And the fact that
they are losing money,
that it's not a commercial
enterprise would be a factor
that's, you know, would be in
the university's favor that
wasn't in the university's favor
in the Northwestern case because
football, they make a
lot of money off football.
We have this interesting
deal going on with the possible
unionization of football players
at Northwestern and who knows
what other schools
want to follow suit.
We have an even bigger issue
that's affecting collegiate
athletics and that is the
O'Bannon in class action
anti-trust lawsuit, For
those who don't know,
it's expected to
go to court soon.
But as you told me
before we started taping,
there may be delays.
Basically, O'Bannon and the
athletes he's representing are
suing for the use of
the name, the likeness,
the image and trying to
be rewarded monetarily.
What does this do for
collegiate athletics?
Does it completely
slam open Pandora's box?
Yeah, I think the Ed O'Bannon
case and there's a similar case
that's just recently been filed
in New Jersey that are really
attacking the heart
of the N-C-A-A model,
the amateur model where athletes
are not allowed to receive money
in exchange for their services.
And these lawsuits, these
anti-trust lawsuits are really
attacking that model at
its heart and trying to get
compensation for athletes who
are certainly the work horses in
the business.
That's gonna change things a
great deal and I think a lot
more than what the Northwestern
case could potentially change.
So you know there it would
really change the revenue model.
It would go at the type of money
that they can get from jerseys.
There's already been a
settlement with the plaintiffs
in the video game companies
are using their likeness.
It could impact.
It could cause them to
have to share T-V revenues,
which is the real cash
cow for the N-C-A-A.
Billions of dollars.
Yes, exactly.
And so you know now you're
talking about somebody else is
getting a piece of that
pie, which could affect,
you know, universities ability
to pay coaches the way they're
currently paying them, to build
these new nice facilities a lot
of the universities
are building.
Then you've
got title nine
implications where if you
provide certain money
to the male athletes,
you have to provide it on
an equal basis to the female
athletes and the
non-revenue sports including.
So it's going to require a
real shift in budgeting and what
they're going to be able to
do as a university and an
institution.
Let me ask you this.
Quick answer.
Do you think O'Bannon wins this
case or do you think they settle
or he loses?
From everything I hear,
settlement is not likely.
I think there are some.
There's been some A-Ds who
have come out and would like a
settlement.
But the N-C-A-A seems to
have dug in its heel.
So I don't think that's likely.
Because how do you?
How do you give even an inch
there without opening up the
whole model, without changing
the whole amateur basis of the
model?
So it's going to be
tough to reach a settlement.
Now you know as to who
wins, it's a tough call.
There have been several lawsuits
throughout time where the
N-C-A-A has been sued on
anti-trust grounds that have
challenged the amateur model.
And to this point, the N-C-A-A
has prevailed on those on the
grounds that this isn't a
commercial enterprise and that
the amateurs in that particular
model is the benefit to the
system and to competition.
So the N-C-A-A at this point has
got some history on their side.
But it'd be interesting to see.
They have history but
they also are worried.
There's no question.
And now the N-C-A-A board
of directors recently met.
There's going to be changes.
There's no question.
In fact, there could be changes
to the full cost of attendance
scholarships.
There could be changes to
continuing education and medical
care for down the road
for collegiate athletics,
insurance, all types of things
that will be decided on in the
not too distant future.
Big five
conferences -- the big five.
We mean Pac 12,
Big 10, etcetera.
They would have the ability to
enact rules and other Division I
schools from other conferences,
for example Memphis in the
American, they could follow
suit if they decide to do so.
But again, a lot of rule
and acting by the Big Five.
So a lot of power that
the N-C-A-A's giving up.
There has to be something major,
change to the N-C-A-A for them
to survive.
Do you think they will?
Do you think the N-C-A-A will
ultimately be around and still
be the so-called governing body
of the collegiate athletics 50
years from now?
You know the question of what
the N-C-A-A is doing right now
is too little too
late to save themselves.
And there was a time where I
think people thought that's
striking a fair balance.
A kid gets a scholarship
and gets to play football.
And you know
that's fair grounds.
And now as you said billions of
dollars are going through the
universities and millions
are going to the coaches,
people are starting to wonder
is that balance still fair.
Is that scenario still one
that we thinks a fair one?
So the N-C-A-A is going to have
to give I think to give back
that public perception
and keep that balance.
Now they're always going to
need somebody to administer
tournaments,
administer bowl games.
And there's always going to be
rules in place and somebody's
going to have to
enforce those rules.
So the N-C-A-A I
think will be there.
It's just a question of whether
this will be an amateur model in
the future.
So many subjects, so many
topics out there that we're just
scratching the surface with.
But needless to say, there's
going to be a lot of changes in
what we know as we've known
for years what intercollegiate
sports is about, what
amateurism is about.
it's all changing.
And David, we
appreciate your time.
We appreciate your expertise
just touching on some of these
subjects for us.
Well I appreciate you having me.
I've enjoyed it.
Thank you so much.
That's David Prather.
We'll take a break.
Overtime is next.
[theme music]
Three..
Two..
One..
[buzzer sounds]
In 2000, Michael Heisley
purchased the Vancouver
Grizzlies and with the hard
work and dedication of the N-B-A
pursuit team in
Memphis, Heisley,
a Chicago Billionaire, relocated
his team to the bluff city.
The rest, as they
say, is history.
Heisley would control majority
ownership in the team until his
sale of the organization two
years ago to a group headed by
Silicon Valley tech guru and
wireless engineer Robert Pera.
Last Saturday, news spread like
wirefire that Heisley had passed
away at the age of 77.
The colorful, boisterous giant
of a man died of complications
from a massive stroke
suffered nearly 15 months ago.
I was able to have Michael
Heisley on my radio show on
Sports 56 several times
and he never disappointed.
He shot from the hip and
wasn't afraid to step on toes.
But he was fair and
most importantly honest.
Heisley also made an appearance
with Geoff Caulkins here on
"Sports Files"
several years ago,
and when he spoke to the media
he always made sure to talk
about the importance of the
team having an impact on the
community.
And I would say he
accomplished that goal,
as just last year the Grizzlies
were named the top franchise in
professional sports.
So here's a look back
at Michael Heisley,
the man who brought big time
professional sports to Memphis.
I think that we've made
a difference in Memphis.
I think that's open to a lot of
discussion by different people.
But from my point of view, I
think that we have made an
impact on the city.
That was our number one, at
least my number one priority.
I think if people
went back and read,
that's what we
said we wanted to do.
We didn't just want to
be a basketball team.
We wanted to be somebody that
basically left an imprint on the
city.
And I think we have done that.
Would I have liked to have more
success as a basketball team?
Obviously.
All my life I've been an
extremely competitive person or
I wouldn't have
been as successful.
When you lose, you know
it is extremely painful.
When you lose in front of
thousands of people that are as
nice as they are and thank
you and everything else,
it makes it even more hurtful.
So you know that's been
very difficult for me to get.
I would have liked to been more
successful with the team than
we've been.
My intentions, I think, have
been focused on basically trying
to do the best job to make the
Grizzlies part of the fabric of
Memphis.
And quite honestly,
in some regards we;
ve done a pretty decent job.
In other areas, you
know its work unfinished.
And I think we can get there.
But that is so much harder than
I ever perceived it would be.
I am a very upfront person.
And sometimes people don't
like what I have to say.
But I guess if I had to be
a certain type of person,
I would want to be a person that
told people exactly what's on my
mind.
And that's why
generally speaking,
if you go back and
look at the record,
you'll find very
few times I've said,
given a statement, and then
turned out and did something
else.
You know I've been
extremely fortunate.
I started very poor.
And I've made a
substantial amount of money.
And I firmly believe
that money corrupts.
And I think that if
you don't give back,
it will corrupt you.
And worse, it will corrupt
your children and your family.
And so it has been a very strong
purpose in my family that we
would try to give back.
And I got this idea
that owning a sports team.
People in this
country are so sports nuts,
that owning a sports team, you
could get people to support your
charities and so on like that.
And you could have
even a bigger impact.
And so we looked at a couple of
things before we ended up with
the Grizzlies.
And quite frankly, I'm satisfied
that we have made a difference
in Memphis.
I'm sure people would like
to think I should have made a
bigger difference.
Would I be much more satisfied?
I'm not trying to
say I'm satisfied.
Would it be much more
satisfied to have been a winner?
I think people want more.
We got to the play-offs.
We were getting ready to move in
to the new arena and so on and
so forth.
People had a new team.
Expectations were a lot
less than what we had.
We went from 20-some wins
with a team that haven't done in
Vancouver anything and
we suddenly were at 50.
You know and that
was a tremendous move.
And that shows you that
what success would do if the
Grizzlies could basically
replicate that level of success
but it would have to be more.
To get to that, we would
not only have to get to the
play-offs, we would have to
win games in the play-offs.
And of course we send our
condolences to Michael's wife
Agnes, his five children,
and the entire Heisley family.
And that will do it
for this week's show.
We'll see you next time.
(female announcer) Production
funding for "Sports Files" is
made possible in part by..
(male announcer) Infiniti of
Memphis has moved to Germantown
road just half a mile north of
Wolfchase Galleria and is proud
to support W-K-N-O for its
quality broadcasting and service
to our community.
Quality and service -- No wonder
Infiniti of Memphis feels at
home on W-K-N-O.