Kickoff to profit sharing

   < < Go Back
from Bloomberg Businessweek,

Inside the fight to give college athletes a piece of the action.

An undistinguished athlete at Youngstown State University in the late 1950s, John Paul “Sonny” Vaccaro promoted rock concerts and worked as a sports agent before taking a $500-a-month job in 1977 with Nike (NKE). Seven years later he persuaded the sneaker maker to pile its endorsement bets on a National Basketball Association rookie named Michael Jordan. In 1988 he brokered Nike’s first universitywide deal to supply sneakers to athletes on all teams at the University of Miami. He operated corporate-sponsored summer showcases for top high school recruits. “Sure, I wrote checks,” he says. “The schools, the coaches, the NCAA–they never said, ‘No thank you.’” During that time, “ESPN was expanding like crazy. The college game was everywhere, all the time. Big bucks. The only ones not making any money? The players. Only a few ever go pro. Started to bother me.”

Vaccaro gave Hausfeld a homework assignment: Read the confessional memoir of Walter Byers, the NCAA’s executive director from 1951 to 1987 and the man known as the governing body’s master builder.

“Prosecutors and the courts,” Byers wrote, “should use antitrust laws to break up the collegiate cartel–not just in athletics but possibly in other aspects of collegiate life as well.” As Byers argued, “The college player cannot sell his own feet (the coach does that) nor can he sell his own name (the college will do that). This is the plantation mentality resurrected and blessed by today’s campus executives.” To Hausfeld, the memoir amounted to an invitation wrapped in a confession.

More From Bloomberg Businessweek: