Posts tagged alston
HBL Statement on Alston Decision from CEO Ricky Volante

The HBL management team are experts in the business of sports and the legal issues surrounding compensation of college athletes. We have seen this story play out before: a court ruling chastises the NCAA, but the decision lacks teeth to meaningfully provide justice to college athletes. Equity for college athletes will not come from a court decision, and will certainly not come from the NCAA suddenly deciding to do the right thing. This is exactly why we founded the Historical Basketball League.

Last night, Judge Claudia Wilken issued her ruling in the Alston case. She determined that the restrictions on educational benefits established by the NCAA and its member-schools violate antitrust law. I'm going to say that once more for the people in the back: A Federal Judge, ruled in court, that the NCAA and all the schools profiting from college athletes, are violating federal laws designed to protect consumers and the free market.

Judge Wilken further stated that “amateurism” is likely not a necessary part of college sports in the eyes of consumers. We agree. This all sounds great so far! Federal courts will provide equity to college athletes, right? Unfortunately not. This isn’t the first time that a federal court has found the NCAA to have violated antitrust law. As in each of the previous cases, the ruling was not paired with anything that would meaningfully change outcomes for college athletes.

Judge Wilken left the restrictions on benefits not related to education intact. Essentially, she decided to protect the salaries of conference commissioners, athletic directors, and coaches over the rights of college athletes to be paid directly for their labor.

Judge Wilken saw through the con that is amateurism.  She made clear that consumers “enjoy watching sports played by student-athletes who receive compensation and benefits.”  When a Federal Judge is willing to say that NCAA rules “do not follow any coherent definition of amateurism,” that's legalese for #AmateurismIsACon.

She saw that the optimal decision would likely be to pay the athletes to please the consumers, writing that: “In a market free of the challenged restraints...student-athletes would receive offers that would more closely match the value of their athletic services.” We agree, which is why we are making that market.

Judge Wilken wrote over 100 pages detailing all of the harms caused by the con of amateurism. Yet in her ruling, on the last few pages, she chose to leave almost all of that harm in place.  She actively worried that the six- and seven-figure salaried athletic directors and commissioners who run these college sports leagues might make “miscalculations” and overpay their athletes. On this (poorly reasoned) ideal, she chose to deny all college athletes their right to fair market pay.

Think of your job. Imagine if a judge said that because Brad from accounting might be overpaid, no paychecks for any other employees, including you, will ever be handed out. Oh by the way, your boss now makes $6 million a year from all the money freed up from not paying you and your coworkers. But at least you get free coffee, a parking spot and a desk, and the opportunity to work “for the love of your job.” After all, isn’t that enough?  

We feel that this ruling is poorly reasoned because it prioritizes the powerful over the vulnerable, the privilege of wealth over the rights of the poor.

There are four ways to dismantle an economic cartel: (1) litigation, (2) legislation, (3) unionization/organization, or (4) competition. The first three are far too slow for the arc of history to ever bend towards real justice.  The cases against the NCAA have now taken 13 years – and will likely take years more once the NCAA appeals this decision. Justice delayed is justice denied.

Similarly, legislation introduced in the State of Washington to permit athletes to sell their name, image, and likeness rights (i.e., sign endorsement deals) died in committee. While similar bills have been introduced in California, Maryland, and North Carolina, you can be sure the NCAA will be sending their lobbyists to Sacramento, Annapolis, Raleigh, and DC to try and kill these efforts as well.

Unionization efforts proved unsuccessful at Northwestern in 2015. These efforts also resulted in certain states (e.g., Michigan and Ohio) passing bills that specifically prevented college athletes at public universities from unionizing.

It should also be considered that any reform, whatever the method, will still end with the same people in charge – the NCAA, conference commissioners, and athletic directors. We have over 60 years of evidence that they will put themselves above the athletes every time.

The only method of providing justice to college athletes that is immune to the above shortcomings, is competition. The Historical Basketball League is that competition. The dimension of competition that should be prioritized, is providing long-term value to college athletes. No amateurism con. No false choice between education and compensation. No restriction from profiting from their own likeness.

The HBL is the first college basketball league to educate and compensate its athletes.  When it launches in June 2020, the HBL will be the premier destination for elite college basketball players to shine on a national stage. Structured as a single-entity sports league independent of the universities, the HBL will take a holistic approach to developing each athlete on and off the court.

The HBL’s basketball operations division, led by 2-time NBA champion David West, is recruiting the top athletes from the freshman class of 2020, as well as identifying athletes at existing schools ready to take their talents pro without having to give up their college education. The more the NCAA schools cling to amateurism, the easier it is for the HBL to disrupt their model by offering fair wages for athletic services – what’s bad in Judge Wilken’s decision is great for the HBL business model.

In addition to being employees of the HBL, the players will be enrolled as bona-fide students at two- and four-year colleges and universities, as well as vocational and online programs. With our regular season taking place in the summer, an HBL player can actually be a student and an athlete. As an employee of the HBL, each player will receive an annual salary ranging from $50,000 to $150,000, plus they will no longer be denied the right to earn third-party income from sponsorships, endorsements, and even their own social media channel.

We continue to add mission-aligned investors and ramp up basketball operations. The HBL was recently featured in the Wall Street Journal, and will be featured in a number of national outlets over the next few weeks.

The HBL will initially consist of 12 teams in strategically selected cities across the country – here are the 20 markets that we are considering. We are identifying and engaging mission-aligned investor-operator groups to run these teams, and look forward to bringing together a group of powerful investors ready to change the world and make money in the process.

If like us, you are tired of college football and basketball players from low socioeconomic backgrounds being economically exploited for the benefit of college coaches, athletic directors, and universities, then the HBL is meant for you. David West, the HBL’s COO, explained that being pro-HBL means being “on the right side of history” by helping create an equitable system for college sports. Amateurism is a con, and the HBL will provide a path to a better, juster, and more professional future.