O'Bannon v. NCAA (aka Could Ohio State go D3)

[Wonderful Monds]

Non-profit doesn't mean you aren't a business. They are charging money for a product. They are a business.

That would be a gross oversimplification.

[dougdirt]

That would be a gross oversimplification.

They bring in millions of dollars a year by selling products. They pay employees millions of dollars for working for them. They are a business. I don't know how else to say it.

[Wonderful Monds]

Yes, because all stars in college football and basketball go on to make the NBA and NFL.....


And yes, a college is a business. They are operating with hundreds or millions to billions of dollars with thousands of employees that sell products to consumers. Not turning a profit (while they have millions to billions sitting in wait for a rainy day) doesn't mean that you aren't operating a business. If they stopped charging for their products and paying employees, then they would cease to be a business. Until then, they are operating as a business.

I think you have a bit of a misunderstanding of what a business is.

[dougdirt]

I think you have a bit of a misunderstanding of what a business is.

Please explain to me what a business is then. Then explain to me what an organization is that has thousands of employees that they pay tens of millions of dollars to for jobs they perform directly for that organization and also sells products for hundreds of millions of dollars or more each year. The only difference is that one makes a profit and the other puts money in a general fund that would have been profit.

[Yachtzee]

Non-profit doesn't mean you aren't a business. They are charging money for a product. They are a business.

No they are not. Business organizations are defined by law. Schools and churches are organized under law as non-business entities, as are charities and government agencies. They operate under rules different than businesses. They have no owners and are obliged to adhere to the non-profit purpose for which they are organized. If they run afoul of that purpose, they can lose their non-profit status. They do not have ownership interests that can be bought or sold. Businesses can be for any legal purpose chosen by ownership. They aren't required to adhere to that purpose, and can expand into other purposes. They have ownership interests that can be bought, sold, or traded.

[dougdirt]

No they are not. Business organizations are defined by law. Schools and churches are organized under law as non-business entities, as are charities and government agencies. They operate under rules different than businesses. They have no owners and are obliged to adhere to the non-profit purpose for which they are organized. If they run afoul of that purpose, they can lose their non-profit status. They do not have ownership interests that can be bought or sold. Businesses can be for any legal purpose chosen by ownership. They aren't required to adhere to that purpose, and can expand into other purposes. They have ownership interests that can be bought, sold, or traded.

It is a bunch of semantics. Ohio State has 22,000 employees. They have an operating budget of $5,000,000,000. They have an endowment fund with more than $2,000,000,000 in it. But yeah, let's let that get in the way of saying they are a business because they can't be sold and have a few extra laws to follow.

[Yachtzee]

It is a bunch of semantics. Ohio State has 22,000 employees. They have an operating budget of $5,000,000,000. They have an endowment fund with more than $2,000,000,000 in it. But yeah, let's let that get in the way of saying they are a business because they can't be sold and have a few extra laws to follow.

It's not semantics, it's law. You could say the same thing about governments, but they are not businesses either.

[dougdirt]

It's not semantics, it's law. You could say the same thing about governments, but they are not businesses either.

End of the day, when an organization has paid employees and sells products, they are a business. I could care less what the law wants to define as a business versus a non-profit organization. Both are conducting business via products and money. Or are you going to tell me that schools just conduct non-profit and try to explain it that way?

[Yachtzee]

End of the day, when an organization has paid employees and sells products, they are a business. I could care less what the law wants to define as a business versus a non-profit organization. Both are conducting business via products and money. Or are you going to tell me that schools just conduct non-profit and try to explain it that way?

Schools, churches and other non-profits have no owners. They are expressly prohibited from taking revenues and distributing them as profit. They must use revenues strictly for the purpose for which they were created and cannot distribute revenues to private owners or shareholders as profit. Their activities are governed by their charter and state law.

By your overly broad definition, families are businesses. The owners (parents) bring in revenue (earnings) by providing a service (work), and they have employees (children) who perform work under their supervision (chores). I guess parents should pay their children minimum wage when they're old enough to do chores.

[improbus]

Legally speaking, college athletic departments are non-profit organizations. But, they have some awfully strange behaviors for a non-profit. I will use Ohio State as an example because I was able to find an itemized budget (not to anger Buckeye fans). Here is the link in case anyone is interested.
http://businessofcollegesports.com/2...cs-department/

For every dollar paid to OSU directly by the fans, 13.8 cents goes to the student athletes and student employees at the school. That's an abysmally low number. On the other hand, around 34.9 cents goes to the staff of the school. In case you were wondering, a good ratio for charities is to have 75 cents on every dollar donated going to those for whom the charity was created. I understand that an athletic department is not a charity, but those are some alarming numbers.

Now, that budget only accounts for the money that actually makes it into the athletic department. What about the money all those people make on the kids outside the university? Think about the amount made by the TV networks, apparel makers, sports writers, bowl workers, the NCAA, the conferences, etc... I would guess that less than a nickel of every dollar spent on college athletics in general actually makes it to the kids. That makes it/me fell pretty dirty.

[jojo]

Legally speaking, college athletic departments are non-profit organizations. But, they have some awfully strange behaviors for a non-profit. I will use Ohio State as an example because I was able to find an itemized budget (not to anger Buckeye fans). Here is the link in case anyone is interested.
http://businessofcollegesports.com/2...cs-department/

For every dollar paid to OSU directly by the fans, 13.8 cents goes to the student athletes and student employees at the school. That's an abysmally low number. On the other hand, around 34.9 cents goes to the staff of the school. In case you were wondering, a good ratio for charities is to have 75 cents on every dollar donated going to those for whom the charity was created. I understand that an athletic department is not a charity, but those are some alarming numbers.

Now, that budget only accounts for the money that actually makes it into the athletic department. What about the money all those people make on the kids outside the university? Think about the amount made by the TV networks, apparel makers, sports writers, bowl workers, the NCAA, the conferences, etc... I would guess that less than a nickel of every dollar spent on college athletics in general actually makes it to the kids. That makes it/me fell pretty dirty.

Another name for staff at a university is teacher.

[improbus]

Another name for staff at a university is teacher.

That number was exclusively for the athletic department. Not the university at large. Now, the "Grant-in-aid" money paid to the university does go to pay the teachers at the school, so schools essentially get to double dip. It reminds me of the old "company towns" run by Carnegie, where the employees get their paycheck and spend it at Carnegie stores. OSU players get their scholarships and it gets spent at the school.

[IslandRed]

If you want to tell universities to get rid of certain sports, you'd have a better shot at getting rid of the football and basketball programs. That would be more in line with their non-profit mission.

Quoted for truth.

In the big picture, fielding athletic teams has been part of the university experience since the 19th century. The teams didn't make money and weren't expected to. They were just part of the college landscape, like the chorus or the debate team or the lawn where students hung out on nice days. Game days provided an excuse for alumni to visit and catch up with old friends. They gave scholarships to athletes for the same reasons they gave scholarships to top students -- luring the cream of the crop so their school would be better than their rivals. Being on the team wasn't a job. It was just high-school sports, extended.

It is the modern-day big-time college football and basketball program that is the anomaly, an industry that has blown up far beyond anything that's consistent with why the university exists or what it's supposed to be doing. Not that the universities aren't to blame for this, mind you, or that things aren't out of whack nowadays. If the school isn't making money on your sport, getting a scholarship for being on the team is a pretty good deal. If they're making it by the wheelbarrow-full, it's not.

[improbus]

Quoted for truth.

In the big picture, fielding athletic teams has been part of the university experience since the 19th century. The teams didn't make money and weren't expected to. They were just part of the college landscape, like the chorus or the debate team or the lawn where students hung out on nice days. Game days provided an excuse for alumni to visit and catch up with old friends. They gave scholarships to athletes for the same reasons they gave scholarships to top students -- luring the cream of the crop so their school would be better than their rivals. Being on the team wasn't a job. It was just high-school sports, extended.

It is the modern-day big-time college football and basketball program that is the anomaly, an industry that has blown up far beyond anything that's consistent with why the university exists or what it's supposed to be doing. Not that the universities aren't to blame for this, mind you, or that things aren't out of whack nowadays. If the school isn't making money on your sport, getting a scholarship for being on the team is a pretty good deal. If they're making it by the wheelbarrow-full, it's not.

Athletic scholarships and financial aid have been around since the 19th century, but they were codified by the NCAA in 1950. In 1950, Bud Wilkerson (the top college coach at the time) made $15,000 (roughly equivalent to $140,000 today). Bob Stoops makes 32 times that amount. The kids compensation hasn't changed a lick since then.

[improbus]

Another part of this argument is the age of the participants. This system is built on adults making piles of money while kids concuss themselves on the field.