When the NCAA legislative process is wound into high gear, it’s natural for compliance offices to take notice. Obviously if something changes in the book we use everyday, we need to know that and be ready for it.
Major league collective bargaining negotiations would seem to have a lot less impact on college sports. But the changes made in them can have a big impact. Normally those changes are small in the grand scheme of things. A two-year age limit in the NBA is considered a footnote to a negotiation that centers on revenue splits and free agency mechanics, despite the impact is has on the NBA’s talent pipeline.
By contrast, Major League Baseball’s quick and quiet negotiations made spending on new players who are or might be in college a major issue. After recommended signing bonuses for players failed to curb spending on incoming talent, the union and the owners have agreed to significant penalties for teams who do not follow MLB’s slotting system.
A luxury tax threshold will be set based on a team’s recommended bonuses for the first 10 rounds of the draft. Exceeding the recommended bonuses by even 5% requires payment of a 75% tax. Penalties escalate quickly; teams exceeding the tax threshold by 15% pay a 100% fine and lose two first round draft picks.
In addition, the signing deadline was moved up a full month. Instead of being in mid-August, right before school started, it will be in mid-July, moving around based on the All Star Game.
All of this is a gigantic win for compliance professionals and the NCAA Eligibility Center. With less wiggle room allowed (and small commissions available), agents acting as advisors to players have less incentive to take a hands-on approach to negotiations, meaning fewer violations of Bylaws 12.3.2 and 126.96.36.199. The shorter negotiating window also means amateur status can be settled sooner, reducing the number of Eligibility Center investigations which stretch into the school year.
In the medium-to-long term, it should improve other aspects of the recruiting and initial eligibility process. Baseball should settle into a pattern, like the NBA did, where draft position largely dictates whether a prospect will attend college. This means prospects who are not projected high enough will need to take academics more seriously. A worldwide draft, rumored to be a possibility as soon as 2014 would push even more prospects toward college.
Whether it turns out to be a win for college baseball as a whole remains to be seen. Baseball has struggled to attract athletes, and now large amounts of money available early in an athlete’s career will no longer be available. How much? In 2011, just three teams (Pirates, Royals, and Nationals) spent more than $25 million over slot on draft picks covered by the new regulations. The top three picks received bonuses that were roughly double MLB’s recommendation. Those bonuses alone would have trigged the steepest penalties in the new draft luxury tax system.
The fear is that while more of the best baseball players will likely end up in college, fewer of the best athletes(subscription req’d) will still be playing baseball when it comes time to make the choice.
This is the part where MLB tells talented young amateur athletes – who, by the way, aren’t union members and had zero voice in these negotiations – that baseball is a lousy avenue for them to take, at least financially, and they should probably check out other sports.
Getting more of the best players does not help the game if the talent level of the entire player pool is significantly lower.
The uncertainty also comes from the NCAA’s side of the equation, since no sport is as greatly impacted by the Presidential Retreat reforms as much as baseball. The $2,000 miscellaneous expense allowance may change how coaches distribute their 11.7 scholarships. Length of scholarships will be a key concern, especially for parents of top pitchers. And the new academic requirements will have a noticeable effect in baseball, which has many junior college transfers and has struggled with below average APR scores.
College baseball is just starting to hit its stride as a potential revenue sport. As a spring sport with lots of games, it fills a huge programming need for conference or institutional TV networks. The Division I Baseball Tournament is reported to turn a profit for the NCAA. Attendance is up as well. Despite the struggles, most notably the geographic divide of Southern and Western haves vs. Northern have-nots, the sport is as healthy as any in college athletics. Whether these new changes, the second round to hit baseball in four years fuel more growth or hit the brakes remains to be seen.
The opinions expressed on this blog are the author’s and the author’s alone, and are not endorsed by the NCAA or any NCAA member institution or conference. This blog is not a substitute for a compliance office.