Northwestern lawsuit a long time coming

Updated: Thursday, March 27, 2014
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KALAMAZOO, Mich. (NEWSCHANNEL 3) - As reported Wednesday, the world of college sports turned upside down when the National Labor Relations Board in Chicago ruled that football players at Northwestern University could be considered employees.

As a result, the ruling said those players had a right to form a union and bargain collectively.

Tonight in Tom's Corner, Tom Van Howe says it was something the NCAA should have seen coming a long time ago.

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There has been a lot of instant--sometimes hysterical--analysis over what this development will mean to college sports programs all across the United States.

If players are paid, does this mean lesser programs like baseball and track will be shut down? Will players have to pay taxes on their scholarships?

Will schools like Western and Central Michigan be able to afford it? Will football at smaller colleges have to cash it in?

Except for the tax question--and the answer to that is no; scholarships are "grants in aid" and therefore not taxable--nobody knows for sure what going to happen.

But man, this has been a long time in coming.

Take a look! Major college basketball and football is a multi-billion dollar industry. This weekend at sports venues around the country, lots of millionaires will be gathering to watch the games of the NCAA Sweet Sixteen. Among them will be coaches, conference administrators, advertisers--they're paying 700 grand for a 30 second spot right now--NCAA execs, video game producers, broadcasters, broadcast executives, the owners of professional teams, and the list goes on.

This is huge. This is an arena where money gets tossed around as casually as a pair of dirty socks.

Basketball and football coaches are regularly among the highest paid people in their states, and at the center of it all, the raw material for all this entertainment, are the players--some of whom will go pro, most of whom will not.

Many of whom don't have an extra dime in their pockets.

Meantime, take a look at the profits. Not revenue, but profits, as reported by some of the biggest  football schools:

  • University of Texas - Nearly $80 million dollars.
  • University of Michigan - More than $60 million dollars.
  • University of Georgia - More than $50 million.
  • University of Alabama - $51 million.

You get the idea.

But if one of the players on any one of those teams gets ten extra bucks for signing a jersey--a jersey sold, for profit, by his own university--it can be ground for dismissal or expulsion.

I know they're getting scholarships. And they are not to be taken lightly. It's a wonderful opportunity. But the NLRB ruling says it is clear the players are recruited for their athletic ability, not because of their achievements in the classroom.

And they spend much more time on the football field than they do in class. It goes to employee status.

Administrators at Northwestern, to the joy of college administrators everywhere, are appealing the NLRB ruling.

The whole thing  could wind up before the U.S. Supreme Court.

But the legal process is grindingly slow. And it'll take time.

But here's the curious  reality to all this. Here's what the suit is actually asking for. And it's not for more money.

The players want financial coverage for former players who suffer from sports-related injuries.
 
They want independent concussion experts on the sidelines during games. And they want the creation of an educational trust fund to help former players graduate.

That's the thrust of it. Measured. Reasonable. Logical. Doesn't seem like too much to ask for.

And the NCAA could have done all of that a long time ago. In addition, the NCAA could have come up with a formula for player stipends, for example, so there would be no need to for one of them to sell an autograph for a little spending money.

The television networks CBS and TBS have paid the NCAA more than a mind-boggling $10 billion for the rights to broadcast the games of the March Madness tournament.

With all that money, you'd think the NCAA might have found a way to loosen its iron grip on all the revenue producing athletes under its control. To achieve a little balance. To make things fair.

If it had, the Northwestern lawsuit may never have been filed. And we wouldn't be speculating on all the ruling's very real universe-rattling ramifications.

But with its eye on profit, the dictatorial NCAA dropped the ball. College sports will never be quite the same.

In this corner...I'm Tom Van Howe.

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Last Update on July 07, 2015 07:36 GMT

GREECE-BAILOUT

PARIS (AP) -- Eurozone nations will hold an emergency summit today to discuss how to proceed following the `no' result in Greece's bailout referendum.

In the meantime, Germany's EU commissioner says he's optimistic that a new Greek finance minister and opposition parties' backing for Prime Minister Alexis Tsipras (TSEE'-prahs) could smooth negotiations between Athens and its European creditors.

Greece's polarizing finance minister, Yanis Varoufakis, resigned Monday and was replaced by Euclid Tsakalotos. Three opposition parties offered backing for Tsipras in the bailout negotiations.

Commissioner Guenther Oettinger told Deutschlandfunk radio Tuesday that Tsakalotos "doesn't have the same attitude as his predecessor. He knows the figures, the facts, he knows our reform proposals ... and he knows that we are flexible."

German officials insist that, even after its voters rejected more austerity in a referendum, Greece must accept conditions for any new aid.

Earlier, Chancellor Angela Merkel said "time is of the essence," after discussing the Greek crisis with French President Francois Hollande in Paris. She said that Greece must advance proposals to the table this week.

Greece's banks are facing the risk of collapse within days unless a rescue deal is reached. The European Central Bank maintained its level of cash assistance to Greek banks ahead of today's emergency meeting.

ECONOMY-THE DAY AHEAD

WASHINGTON (AP) -- A few economic reports are due out from the federal government later this morning. The Commerce Department will release international trade data for May and the Labor Department will release its job openings and labor turnover survey for the same month. This afternoon, the Federal Reserve releases May consumer credit data.

ECONOMY-SERVICES

WASHINGTON (AP) -- U.S. service firms grew at a slightly faster pace in June, as business activity and new orders increased.

The Institute for Supply Management says its services index edged up to 56 in June from 55.7 in May. Any reading over 50 indicates that services firms are expanding.

Steady hiring over the past year has fueled a consumer spending rebound from a winter slump. Many economists say the economy will expand at an annual rate of 2.5 per cent in the second quarter, after shrinking during the first three months of 2015.

Still, the index's hiring component slipped in June to 52.7 from 55.3 in May, which indicates that the rate of job growth might slow.

The report corresponds with economic growth of around 3 percent annually in the second quarter, Lee said.

SKOREA-EARNS-SAMSUNG-ELECTRONICS

SEOUL, South Korea (AP) -- Samsung Electronics Co. forecasts its second-quarter profit has dropped 4 percent from a year earlier.

The maker of Galaxy smartphones said in its earnings preview Tuesday that its April-June operating profit was 6.9 trillion won ($6.1 billion). The consensus among analysts was 7.23 trillion won, according to financial data provider FactSet.

Samsung said sales fell 8 percent over a year earlier to 48 trillion won. The company is scheduled to disclose its net profit and breakdown figures among its business divisions later this month.

The announcement shows that recovery at Samsung's smartphone division was not as strong as expected.

Analysts have lowered profit forecasts on Samsung in recent weeks, citing the weaker-than-expected sales of its flagship smartphones, the Galaxy S6 and S6 Edge, which went on sale in April.

US-STARBUCKS-PRICE-HIKE

NEW YORK (AP) -- Starbucks says it's hiking prices again starting today, with the increases ranging from 5 to 20 cents for most affected drinks.

The Seattle-based company also raised prices nationally about a year ago.

The company says that a small and large brewed coffee will each go up by 10 cents in most areas of the country. That would bring the price of a large coffee to $2.45 in most U.S. stores.

Some other coffee sellers are cutting prices. Last week, The J.M. Smucker Co. said it would cut prices for most of its coffee products because of declines in future prices for unroasted coffee beans. In an emailed statement yesterday, Starbucks Corp. said coffee costs are only part of its expenses, which also include rent, labor, marketing and equipment.

US-SURVEYMONKEY-SANDBERG

Sheryl Sandberg joins SurveyMonkey board of directors

UNDTED ( AP) -- SurveyMonkey will add two new members to its board of directors, including Facebook's chief operating officer, Sheryl Sandberg.

Sandberg is the widow of David Goldberg, who was CEO at SurveyMonkey from 2009 until he died in an accident while exercising in May.

The Palo Alto, California, company said Monday its other new director is David Ebersman, the CEO of Lyra Health and former chief financial officer at Facebook.

SurveyMonkey, which operates an online survey platform, also said Zander Lurie, its acting executive chairman, will take on the role on a permanent basis.

WAL-MART-ARMORED CAR HEIST

BRISTOW, Okla. (AP) -- Investigators say they have no suspects in the theft of $75,000 from an Oklahoma Wal-Mart by a man disguised as an armored truck driver.

Authorities say the suspect entered the Wal-Mart store in Bristow about 10:30 a.m. Saturday dressed similarly to a Loomis armored transport employee. The suspect strolled to the cash office, signed for the deposit and walked out of the store.

Wal-Mart employees called police after the real Loomis employee arrived about 45 minutes later. Bristow is about 35 miles southeast of Tulsa.

Bristow Police Chief Wayne Williams said Monday investigators have not identified the suspect whose image was captured by a video surveillance camera. Williams says officials don't believe the suspect lives in the area.

Williams says Wal-Mart has alerted its other stores about the theft.

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