Russell Fry Grills Expert On 'Implications' Of Adopting 'Employee Model' For NCAA Student Athletes

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During a House Judiciary Committee hearing prior to the congressional recess, Rep. Russell Fry (R-SC) spoke about the consequences of adopting an 'employee model' for student athletes.  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript   Stay Connected Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com

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00:00Thank you, Mr. Chair. This one is from the National Library of Medicine dated

00:04February 2017. On average, two NCAA football players die per season. Without

00:12objection, the gentleman from Kansas is now recognized for five minutes. Thank you, Mr.

00:16Chairman. I yield to my colleague from South Carolina, Mr. Frye. Gentleman's

00:23recognized. Thank you. Thank you, gentlemen, for yielding. What's

00:28interesting to me in this whole debate is this is the disconnect from

00:33Washington, D.C. with the rest of the world, right? That we're talking about a

00:37federalization on the other side of college athletes with commissions and

00:41regs and all this stuff. That is the disconnect, right? When you

00:45cross the Potomac, somehow these things crop up. Last week in the Energy and

00:49Commerce Committee, we heard from student-athletes and they resoundingly

00:52said, we don't want the employee model. We hear that on the other side, that this is

00:57where we should go. We hear from the coaches today who are very talented.

01:00They don't want the employee model because it changes the face of a

01:04student-athlete. And so, Director McIntosh, you're on the hot seat for a

01:09little bit, but I want to kind of walk through some of the the implications

01:12that if Congress were to adopt what others on the other side are saying in

01:16an employee model, what does that do? First of all, if they're

01:21employees, you have an employer-employee relationship, which presumably means that

01:25they could get fired if they're injured, is that correct? That is correct, sir.

01:28Okay, and you also have additional taxes that the university would pay on their

01:33behalf, the student-athletes behalf, is that correct? That's correct. Of course, they

01:36would be paying taxes now as well on any revenue that they

01:40receive, right? I think it's actually worse than that, Congressman. I think they

01:44would be taxed on the revenue that they received and taxed on benefits that

01:48they currently receive in which they're not paying taxes on. Right, so

01:53mental wellness coaches, tutors, room and board, food, swag that they get, these

02:00will all be taxable under existing law, is that correct? Potentially. Okay,

02:05and what about what happens in the event that an athlete is injured?

02:11I think that's the problem. One of the benefits that our student-athletes

02:19have right now is they have guaranteed scholarships for four years even if they

02:23are injured. I live this myself as an employee in a sports organization in the

02:30NFL as a player. I was injured in the second year of my contract and I was

02:35terminated after the third year. All right, so how many student-athletes

02:38are at the University of Wisconsin? Approximately 800, sir. 800. So if you go

02:43to an employee model, you have just hired 800 additional employees of the

02:48University, correct? Theoretically, yes. What does that do to your budget? It puts

02:53tremendous pressure on our budget. I'm trying to envision our HR department

03:00processing 800, posting 800 positions, posting a position for a wide receiver

03:07on our football team. It seems impractical, sir. Right, and to be fair,

03:13you might, as the University of Wisconsin, be able to absorb better than other

03:17schools, correct? So smaller schools would be really on the chopping block. I think

03:22that is true. I think we would have a better chance. I think it would be

03:25detrimental to programs at lower levels. So if we go, if we decided to go

03:29to an employee model, which I think is a mistake, you're now paying more money and

03:35what happens naturally when you've got to pay more money but there's a finite

03:38amount of money that you are budgeted every year? You have to make cuts

03:42elsewhere, is that correct? We would be forced to find the money through growing

03:45of revenues or cutting of expenses. Okay, and cutting of expenses probably means

03:49cutting of sports, correct? We would take every step necessary to avoid that. That

03:54would be the last resort. But it is a reality that that could happen? I think

03:59that would be a reality for many programs at lower levels. And also, what

04:02happens too, we have, this has not been discussed at all, so if you're injured as

04:05a college athlete and you're considered an employee of the university when

04:09you're injured, does that also trigger workers' compensation laws within the

04:12state? Presumably. What does that do to the state budgets that are impacted? So

04:17I mean, so basically all the schools, including, I mean, we did a liability

04:20safe harbor bill last year that was supported by big schools, small schools,

04:24historically black colleges, student athlete organizations and entities,

04:28because they need that oxygen in which to come up with their own framework. But

04:32if we go to this model, that's the, that's the rub, is that when somebody is

04:36injured, which injuries happen in college sports, you're now blowing wide open a

04:40state budget from a workers' compensation perspective, because student

04:44athletes do get hurt. They recover, but they do get hurt. Is that correct? That's

04:48correct, sir. I just think it's important that we remind ourselves, this is not

04:52what our student athletes are asking for. I'll take it just briefly, my last

04:56remaining seconds. The NCAA and other entities, and I'm not going to apologize

05:01for prior actions of the NCAA, but they can't even enforce the rules right now

05:05without being sued. And I understand that y'all are, I say collectively, the

05:09college sports are seeking a liability safe harbor that would kind of go along

05:14with any federal legislation. How important is that liability shield to

05:18help preserve college athletics in the future? Yes, thank you, Congressman. I

05:22think it's extremely important. I think it's important to distinguish. We are not

05:27asking for blanket antitrust exemption. We are looking for a limited safe harbor

05:32in areas in which we need to be allowed to make rules, like around eligibility,

05:37that can preserve the opportunity for future student athletes in the future. I

05:41don't think we want 12, 13 year college athletes. Those are the types of rules

05:48right now that are being determined by the courts. So like the basketball player

05:53that just was granted his eighth year of eligibility, right? I'm not

05:57gonna call him out by name, but I mean we're institutionalizing the Van Wilders

06:01of college sports if we go down that model. That's the risk that's

06:06out there right now. All right, thank you. Mr. Chairman, I yield back.

06:09The gentleman yields back. That concludes today's hearing. We thank our witnesses for appearing

06:12before the committee today without...

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