1 00:00:00,480 --> 00:00:04,240 Speaker 1: This is Bloomberg Business of Sports. The cold heart truth 2 00:00:04,280 --> 00:00:08,000 Speaker 1: about the Olympic journey is not really been financially incentivized 3 00:00:08,000 --> 00:00:10,480 Speaker 1: in the same way that many of the professional sports are. 4 00:00:10,600 --> 00:00:13,880 Speaker 1: But this is a basketball involved dB A, gliblls are 5 00:00:14,000 --> 00:00:17,080 Speaker 1: licensing arm think for fifty All of those things will 6 00:00:17,160 --> 00:00:19,840 Speaker 1: make up what that looks like money in sports. It's 7 00:00:19,880 --> 00:00:22,120 Speaker 1: one of the reasons why I enjoy being on Money 8 00:00:22,200 --> 00:00:24,320 Speaker 1: Night Countdown and talk about some of the more interesting 9 00:00:24,360 --> 00:00:27,960 Speaker 1: aspects of business of sports. When you're talking sports, discipline 10 00:00:28,120 --> 00:00:31,320 Speaker 1: is the bridge from being good to ultimately being great 11 00:00:31,360 --> 00:00:33,440 Speaker 1: at whatever it is that you're trying to be or 12 00:00:33,440 --> 00:00:37,440 Speaker 1: accomplished as your professional Bloomberg Business of Sports from Bloomberg 13 00:00:37,560 --> 00:00:41,640 Speaker 1: Radio and this is the Bloomberg Business of Sports Show. 14 00:00:41,800 --> 00:00:43,839 Speaker 1: We explode the big money issues in the world of 15 00:00:43,920 --> 00:00:46,519 Speaker 1: sports on Michael Laren, I'm Scarlett Boom and I'm Mike 16 00:00:46,600 --> 00:00:50,240 Speaker 1: Lynch today's guests. He is the professor of economics and 17 00:00:50,479 --> 00:00:53,800 Speaker 1: Finance at Seton Hall University. Kurt Rodoll and I all 18 00:00:53,960 --> 00:00:57,480 Speaker 1: than the image in the likeness policy finally allows them 19 00:00:57,520 --> 00:01:00,200 Speaker 1: to make some money. That is straight ahead in the 20 00:01:00,240 --> 00:01:02,520 Speaker 1: Bloomberg Business of Sports. But first, let's talk about some 21 00:01:02,640 --> 00:01:06,240 Speaker 1: of the topics. Here's a name I'm willing to bet 22 00:01:06,360 --> 00:01:09,360 Speaker 1: a lot of people don't think about when you think 23 00:01:09,400 --> 00:01:15,040 Speaker 1: about investing x NFL star Marshawn Lynch, and now he 24 00:01:15,240 --> 00:01:17,600 Speaker 1: is involved in a lot of things. Now he's teaming 25 00:01:17,680 --> 00:01:20,720 Speaker 1: up with Serena Williams, and for that matter, he has 26 00:01:20,800 --> 00:01:23,200 Speaker 1: been in a lot of other things Scarlett that I've 27 00:01:23,240 --> 00:01:25,480 Speaker 1: been a lot of the people don't know about, including 28 00:01:25,600 --> 00:01:29,399 Speaker 1: things involved hockey and all the other Yes, Marshawn Lynch 29 00:01:29,600 --> 00:01:32,440 Speaker 1: spent thirteen seasons in Seattle with the Seahawks, and he 30 00:01:32,600 --> 00:01:36,240 Speaker 1: is now taking part in the newest team in the city, 31 00:01:36,360 --> 00:01:38,920 Speaker 1: which is the Seattle Kraken, and he's joined the ownership 32 00:01:39,080 --> 00:01:43,280 Speaker 1: team as a minority investor. He has been shadowing the 33 00:01:43,720 --> 00:01:47,520 Speaker 1: owner of the Kraken learning hockey CEO operations. So I 34 00:01:47,560 --> 00:01:49,279 Speaker 1: don't know if this means that he's going to actually 35 00:01:49,360 --> 00:01:51,880 Speaker 1: be operationally involved as well, because it's one thing to 36 00:01:51,920 --> 00:01:53,680 Speaker 1: be an investor, it's another thing to be, you know, 37 00:01:53,920 --> 00:01:56,480 Speaker 1: making decisions as well. Well. He's gonna be a minority 38 00:01:56,520 --> 00:01:58,720 Speaker 1: owner of the Seattle Cracken. Here was a guy that 39 00:01:59,000 --> 00:02:01,480 Speaker 1: just was off a radar screen for a while wouldn't 40 00:02:01,520 --> 00:02:04,000 Speaker 1: talk to anybody. Now he's on every single subway commercial 41 00:02:05,080 --> 00:02:08,000 Speaker 1: and now he's popping up on the Seattle Cracking and 42 00:02:08,200 --> 00:02:10,400 Speaker 1: he's um. You know, he's a very beloved figure in 43 00:02:10,639 --> 00:02:13,520 Speaker 1: the city of Seattle. And he's just one of many 44 00:02:13,800 --> 00:02:18,520 Speaker 1: many professional athletes, retired mostly that are getting into ownership. 45 00:02:18,600 --> 00:02:20,480 Speaker 1: And we've had a long list in history. You can 46 00:02:20,520 --> 00:02:22,840 Speaker 1: go back to Lebron James with Liverpool, you can go 47 00:02:22,960 --> 00:02:25,639 Speaker 1: to Michael Jordan's with the Charlotte Bobcats, and there's some 48 00:02:25,720 --> 00:02:28,280 Speaker 1: other names that are popping up. To Wayne Gretzky. You 49 00:02:28,360 --> 00:02:31,600 Speaker 1: know him as the hockey legend, the great one. He 50 00:02:31,840 --> 00:02:35,160 Speaker 1: apparently was also really big into lacrosse. I didn't know 51 00:02:35,240 --> 00:02:38,239 Speaker 1: the national sport of canada's box across. But when I 52 00:02:38,360 --> 00:02:40,040 Speaker 1: read that, no, I did not know that. I mean 53 00:02:40,240 --> 00:02:41,959 Speaker 1: you you'd have to go a long way to convince 54 00:02:42,000 --> 00:02:44,160 Speaker 1: me that it's not ice hockey. I know the unofficial 55 00:02:44,280 --> 00:02:47,400 Speaker 1: national sport is ice hockey. Clearly that yeah, But apparently 56 00:02:47,480 --> 00:02:49,880 Speaker 1: the national sport of canada's box across. And that's something 57 00:02:50,000 --> 00:02:53,079 Speaker 1: that Wayne Gretzky played since he was young, um, since 58 00:02:53,120 --> 00:02:55,720 Speaker 1: he was about six, and he continued playing until obviously 59 00:02:55,840 --> 00:03:00,280 Speaker 1: he transitioned full time to hockey because and into you 60 00:03:00,320 --> 00:03:02,959 Speaker 1: brought this up when you were on Twitter speaking of 61 00:03:03,120 --> 00:03:07,519 Speaker 1: hockey in Canada, famous Gui la Fleur. He passed fairly recently. 62 00:03:08,160 --> 00:03:12,239 Speaker 1: And recently there was a game against the Canadians and 63 00:03:12,320 --> 00:03:17,079 Speaker 1: the Boston Bruins, and the fans for a moment wouldn't 64 00:03:17,200 --> 00:03:20,080 Speaker 1: let the game start because they kept helding up either 65 00:03:20,240 --> 00:03:24,280 Speaker 1: lighters or with their phones whatever, to to honor Gui 66 00:03:24,440 --> 00:03:26,639 Speaker 1: la Fleur. It went on for twenty five minutes. It 67 00:03:26,760 --> 00:03:29,959 Speaker 1: was yeah and one for twenty five minutes. It was 68 00:03:30,040 --> 00:03:33,480 Speaker 1: a Sunday night game, late in the season, and the 69 00:03:33,560 --> 00:03:35,600 Speaker 1: game was supposed to start at seven. They dropped the 70 00:03:35,640 --> 00:03:37,720 Speaker 1: puck finally at seven twenty five. And every time the 71 00:03:37,720 --> 00:03:40,120 Speaker 1: public address announcer would come on, he speaks in French 72 00:03:40,200 --> 00:03:42,800 Speaker 1: first and then English, they would drown drawn him out 73 00:03:42,880 --> 00:03:45,680 Speaker 1: with they would raise the level of cheering and then 74 00:03:45,720 --> 00:03:51,040 Speaker 1: they'd go into oh la la la. And that that's 75 00:03:51,080 --> 00:03:53,960 Speaker 1: how Revere the Ghi la Fleur was lying in state 76 00:03:54,080 --> 00:03:56,960 Speaker 1: for two days in Montreal and having a state funeral 77 00:03:57,280 --> 00:03:59,760 Speaker 1: for hockey player. I mean, that's really something. I remember 78 00:04:00,120 --> 00:04:01,960 Speaker 1: Gei la Fleur when I was a kid, and I'm 79 00:04:02,000 --> 00:04:04,880 Speaker 1: watching him on the ice, and I'm like, you know, 80 00:04:05,200 --> 00:04:07,840 Speaker 1: that was one of the early names I knew outside 81 00:04:07,840 --> 00:04:10,360 Speaker 1: of all the Detroit Red Wings that I knew was 82 00:04:10,480 --> 00:04:13,360 Speaker 1: Gila Fleur. I mean he was he was just great. 83 00:04:13,800 --> 00:04:17,840 Speaker 1: And I always laughed at the fans. They wouldn't call 84 00:04:17,920 --> 00:04:21,440 Speaker 1: him gee, they'd call him guy, guy, guys like you know, 85 00:04:21,480 --> 00:04:25,200 Speaker 1: I'm saying, no, it's gay man. It's like, but God 86 00:04:25,279 --> 00:04:27,760 Speaker 1: rest your soul, sir. You provided a lot for hockey 87 00:04:28,040 --> 00:04:30,920 Speaker 1: and we have nothing but accolades for you, sir. And 88 00:04:31,120 --> 00:04:35,440 Speaker 1: let's talk about what we're here for the business of sports, 89 00:04:35,839 --> 00:04:38,720 Speaker 1: and you couldn't find anyone better than this. This is 90 00:04:39,279 --> 00:04:43,200 Speaker 1: the pressor of Economics and Finance at Seaton Hall University, 91 00:04:43,600 --> 00:04:47,000 Speaker 1: Professor Kurt Rodolf. Thank you, sir for joining us here 92 00:04:47,200 --> 00:04:50,080 Speaker 1: on the Bloomberg Business of Sports. Thank you for having me. 93 00:04:50,120 --> 00:04:51,920 Speaker 1: I'm looking forward to it. Well, I'm gonna start with 94 00:04:52,040 --> 00:04:54,840 Speaker 1: the first one here, and I know it's always the 95 00:04:54,920 --> 00:04:58,480 Speaker 1: go to in today's society, but boy, it is a 96 00:04:58,560 --> 00:05:02,400 Speaker 1: lot of money involved, aim, image, and likeness. It has 97 00:05:02,560 --> 00:05:07,479 Speaker 1: changed the entire landscape of what college sports is all about. 98 00:05:07,960 --> 00:05:10,920 Speaker 1: Can you take us into what it has meant for 99 00:05:11,240 --> 00:05:13,760 Speaker 1: college sports? And where do you see the future going? 100 00:05:13,880 --> 00:05:16,799 Speaker 1: Oh Man, this has been a major change in college sports. 101 00:05:16,960 --> 00:05:20,200 Speaker 1: It has been a fascinating change in college sports. Um, 102 00:05:20,320 --> 00:05:23,080 Speaker 1: something I've been arguing for for a long period of time. 103 00:05:23,200 --> 00:05:26,240 Speaker 1: There are very few industries where we have such low 104 00:05:26,320 --> 00:05:29,760 Speaker 1: wage caps on on the people participating in the sport 105 00:05:29,839 --> 00:05:32,400 Speaker 1: and generating the revenue. So n I l then the 106 00:05:32,440 --> 00:05:36,400 Speaker 1: image and the likeness policy finally allows them to make 107 00:05:36,480 --> 00:05:39,480 Speaker 1: some money. I think that this is an amazingly useful 108 00:05:39,520 --> 00:05:44,040 Speaker 1: policy for society. Probably not so much for donations to 109 00:05:44,120 --> 00:05:48,360 Speaker 1: athletic departments, probably not so much for coaches future salaries, 110 00:05:48,520 --> 00:05:51,560 Speaker 1: But I think that the athletes who are participating this 111 00:05:52,000 --> 00:05:55,160 Speaker 1: are finally able to capture some of those gains for 112 00:05:55,240 --> 00:05:57,320 Speaker 1: those things they've been working for all their lives, and 113 00:05:57,600 --> 00:05:59,920 Speaker 1: I think that it provides an opportunity where they will 114 00:06:00,080 --> 00:06:02,480 Speaker 1: be making some some big money. You're already starting to 115 00:06:02,480 --> 00:06:04,920 Speaker 1: see some large contracts rolling in. I expect them to 116 00:06:05,000 --> 00:06:07,760 Speaker 1: get bigger and broader. That is, we're going to expect 117 00:06:07,800 --> 00:06:10,240 Speaker 1: bigger contracts on the big players, but I also think 118 00:06:10,279 --> 00:06:12,800 Speaker 1: there's going to be broad contracts going to some lesser 119 00:06:12,880 --> 00:06:16,520 Speaker 1: known players that can still advertise and be able to 120 00:06:16,640 --> 00:06:20,440 Speaker 1: use their image for the local areas where they're participating. 121 00:06:20,520 --> 00:06:22,720 Speaker 1: It will also lead to bigger tax bills as well. 122 00:06:23,040 --> 00:06:26,200 Speaker 1: Um Bloomberg has published a story about how the tax 123 00:06:26,360 --> 00:06:30,320 Speaker 1: responsibilities is something that perhaps has not been looked at 124 00:06:30,440 --> 00:06:33,240 Speaker 1: just yet. It's not just for the student athlete who 125 00:06:33,880 --> 00:06:37,400 Speaker 1: is being paid with endorsements and other benefits, but as 126 00:06:37,440 --> 00:06:40,080 Speaker 1: well as their parents who might still claim them as dependents. 127 00:06:40,839 --> 00:06:42,520 Speaker 1: Can you talk us through a little bit about what 128 00:06:42,680 --> 00:06:45,000 Speaker 1: we might have seen or what we're likely to see 129 00:06:45,040 --> 00:06:48,320 Speaker 1: in this first year where these student athletes have started 130 00:06:48,400 --> 00:06:51,080 Speaker 1: reporting their income and they're in a whole new tax 131 00:06:51,279 --> 00:06:55,400 Speaker 1: income category. They're in a whole new income brack. Excuse me. Yeah, 132 00:06:55,440 --> 00:06:58,320 Speaker 1: they move from no income to some income, which is 133 00:06:58,320 --> 00:07:01,040 Speaker 1: always a glorious day at any one's life. When you 134 00:07:01,160 --> 00:07:03,279 Speaker 1: move up to having some income for the first time, 135 00:07:03,320 --> 00:07:04,880 Speaker 1: I think their parents will be a little shocked. I 136 00:07:04,920 --> 00:07:07,360 Speaker 1: think the parents probably we're planning on having them as 137 00:07:07,400 --> 00:07:10,480 Speaker 1: dependents throughout their college career. But at the same time, 138 00:07:10,600 --> 00:07:14,480 Speaker 1: I think that no one looks at receiving an income 139 00:07:14,680 --> 00:07:17,480 Speaker 1: and having to learn the tax system as necessarily a 140 00:07:17,560 --> 00:07:20,360 Speaker 1: bad It is complicated. I just finished filing my taxes, 141 00:07:20,640 --> 00:07:23,360 Speaker 1: not that long ago, and it is a complicated system, 142 00:07:23,440 --> 00:07:25,240 Speaker 1: but at the same time, it is something they're gonna 143 00:07:25,240 --> 00:07:27,120 Speaker 1: have to learn eventually. Anyway, My hope is that the 144 00:07:27,160 --> 00:07:29,920 Speaker 1: athletic departments and many of them have stated that they 145 00:07:30,000 --> 00:07:33,120 Speaker 1: are working with the athletes on n I L deals 146 00:07:33,240 --> 00:07:35,720 Speaker 1: and trying to figure out not just what it means, 147 00:07:35,880 --> 00:07:38,320 Speaker 1: but hopefully what it means from a tax perspective and 148 00:07:38,400 --> 00:07:42,000 Speaker 1: financial aid perspective and all those other perspectives that also matter. 149 00:07:42,160 --> 00:07:45,240 Speaker 1: So it is going to be a complex and confusing task. 150 00:07:45,680 --> 00:07:49,080 Speaker 1: These students are college athletes, which means that they are 151 00:07:49,120 --> 00:07:51,520 Speaker 1: student athletes, and so this is part of their student 152 00:07:51,680 --> 00:07:54,040 Speaker 1: role is to learn something new, and I hope since 153 00:07:54,080 --> 00:07:56,400 Speaker 1: they're at places of higher learning, they are able to 154 00:07:56,960 --> 00:07:59,640 Speaker 1: get through that process and find the resources on campus. 155 00:07:59,760 --> 00:08:03,080 Speaker 1: Most campuses have departments or are certain classes that work 156 00:08:03,160 --> 00:08:06,280 Speaker 1: on personal finance. Hopefully they're signing up for those classes 157 00:08:06,360 --> 00:08:08,280 Speaker 1: earlier now so that they know how to handle these 158 00:08:08,360 --> 00:08:10,760 Speaker 1: funds on the tax side, but also what to do 159 00:08:10,880 --> 00:08:12,840 Speaker 1: with it once you start to have money. We all 160 00:08:12,920 --> 00:08:15,120 Speaker 1: know life changes when you go from that that zero 161 00:08:15,200 --> 00:08:18,760 Speaker 1: income to to a positive income. Taxes are an issue 162 00:08:18,800 --> 00:08:20,200 Speaker 1: that you have to deal with with that, but at 163 00:08:20,240 --> 00:08:22,800 Speaker 1: the same time, learning how to handle money and have money, 164 00:08:23,160 --> 00:08:25,880 Speaker 1: especially at young ages, is very difficult for all of us. 165 00:08:26,080 --> 00:08:28,640 Speaker 1: So I would hope they're all getting the trading and 166 00:08:28,680 --> 00:08:30,840 Speaker 1: background to go with it. Hey, Curt, it's Mike Lench 167 00:08:30,920 --> 00:08:32,679 Speaker 1: up in Boston here. So how do we govern this? 168 00:08:33,040 --> 00:08:35,599 Speaker 1: There's no one governing body like the n c double A, 169 00:08:35,800 --> 00:08:39,240 Speaker 1: and every state has different rules. I mean, I cannot 170 00:08:39,240 --> 00:08:41,880 Speaker 1: only imagine the compliance office must be just going crazy 171 00:08:41,920 --> 00:08:44,760 Speaker 1: and every single school around the country. Yes, I think 172 00:08:44,800 --> 00:08:48,880 Speaker 1: that they are. I think that not having a uniform 173 00:08:49,160 --> 00:08:52,400 Speaker 1: rule makes it more difficult because you're dealing with what 174 00:08:52,840 --> 00:08:54,360 Speaker 1: not only what the n c A does, but what 175 00:08:54,440 --> 00:08:57,120 Speaker 1: the n c A Double A might do, and dealing 176 00:08:57,200 --> 00:08:59,679 Speaker 1: with student athletes and how involved you can and can't be, 177 00:09:00,440 --> 00:09:03,000 Speaker 1: and dealing with I imagine there's a lot of donors 178 00:09:03,080 --> 00:09:05,400 Speaker 1: calling up and asking the questions of how do they 179 00:09:05,440 --> 00:09:08,400 Speaker 1: get involved? And it's not clear how how active the 180 00:09:08,679 --> 00:09:10,559 Speaker 1: athletic department is allowed to be on that, and I 181 00:09:10,600 --> 00:09:12,840 Speaker 1: think in most cases they are supposed to be passive 182 00:09:12,960 --> 00:09:16,680 Speaker 1: and just provide information. Um it's unclear whether they're doing 183 00:09:16,760 --> 00:09:19,760 Speaker 1: that or taking a more active role, which could lead 184 00:09:19,800 --> 00:09:22,800 Speaker 1: to some interesting n C double A rulings in the future. 185 00:09:22,960 --> 00:09:24,719 Speaker 1: Some of my research is on n C double A 186 00:09:24,840 --> 00:09:26,800 Speaker 1: bands and things like that, So like, will there be 187 00:09:26,880 --> 00:09:29,559 Speaker 1: future bands that come from over involvement in the n 188 00:09:29,640 --> 00:09:32,199 Speaker 1: I L deals or trying to get students and I 189 00:09:32,440 --> 00:09:34,760 Speaker 1: L deals when that's supposed to be something they're seeking 190 00:09:34,800 --> 00:09:37,559 Speaker 1: out on their own. Yeah, it's amazingly complex. Anytime we 191 00:09:37,640 --> 00:09:41,559 Speaker 1: go through a change this drastic, we expect major complexities. 192 00:09:42,040 --> 00:09:44,000 Speaker 1: But at the same time, I still think the net 193 00:09:44,040 --> 00:09:46,679 Speaker 1: effect of this is good for the athletes. It's good 194 00:09:46,720 --> 00:09:49,000 Speaker 1: for the athletic departments, and I think it's good for 195 00:09:49,080 --> 00:09:52,079 Speaker 1: athletics on the whole. Nick Saban from Alabama said this 196 00:09:52,200 --> 00:09:54,160 Speaker 1: the best. We've talked about this earlier on the show, 197 00:09:54,600 --> 00:09:59,439 Speaker 1: that the kids today coming out of Alabama or the 198 00:09:59,559 --> 00:10:03,240 Speaker 1: kids in Alabama with the n I L deals are 199 00:10:03,360 --> 00:10:08,680 Speaker 1: making fists full of dollars and as a coach, it's 200 00:10:08,720 --> 00:10:10,920 Speaker 1: got to be hard. And you kind of touched on 201 00:10:11,000 --> 00:10:15,079 Speaker 1: it earlier. How do you rein in a guy if 202 00:10:15,240 --> 00:10:18,800 Speaker 1: he is super dude and he's driving around in a 203 00:10:18,880 --> 00:10:23,120 Speaker 1: new Mustang because he's pitching the Ford dealership in the area. 204 00:10:23,400 --> 00:10:26,559 Speaker 1: How do you rein that guy in so I have 205 00:10:26,600 --> 00:10:29,480 Speaker 1: a hard time with that argument. I'm not trying. Sure 206 00:10:29,559 --> 00:10:32,240 Speaker 1: we need to rain people in. UM. The n LFL 207 00:10:32,360 --> 00:10:34,839 Speaker 1: seems to function well, and they're very highly paid. I 208 00:10:34,920 --> 00:10:36,920 Speaker 1: have plenty of friends who got jobs right out of 209 00:10:37,320 --> 00:10:40,440 Speaker 1: right out of high school who were well paid. UH 210 00:10:40,840 --> 00:10:44,560 Speaker 1: in some some hands on tech industries. They're well paid. 211 00:10:44,640 --> 00:10:47,319 Speaker 1: We don't need to rein them in. UM. I mean 212 00:10:47,400 --> 00:10:51,960 Speaker 1: there's still athletes, they're now paid athletes. UM. I don't 213 00:10:52,000 --> 00:10:54,199 Speaker 1: think Nick Saban has all that much room to talk 214 00:10:54,280 --> 00:10:57,760 Speaker 1: given his compensation package on other people making money and 215 00:10:57,880 --> 00:11:01,280 Speaker 1: driving new Fords on campus. I have students who have 216 00:11:01,720 --> 00:11:04,560 Speaker 1: jobs while they're while they are students, and they've been 217 00:11:04,640 --> 00:11:07,000 Speaker 1: driving nice new cars for years. And it's the athletes 218 00:11:07,040 --> 00:11:09,719 Speaker 1: who haven't been able to afford that lifestyle. I don't 219 00:11:09,760 --> 00:11:11,559 Speaker 1: know if rain in is the right word. I think 220 00:11:11,640 --> 00:11:13,880 Speaker 1: that we need to find I'm an economist, so I'll 221 00:11:13,920 --> 00:11:15,959 Speaker 1: say that we need to find a new equilibrium of 222 00:11:16,040 --> 00:11:19,760 Speaker 1: where that balance is. And that balance used to be 223 00:11:20,240 --> 00:11:24,040 Speaker 1: that students had no rights and functionally no income unless 224 00:11:24,080 --> 00:11:27,400 Speaker 1: they were doing something on on some sort of black market, 225 00:11:27,440 --> 00:11:30,800 Speaker 1: taking out loans on potential future prospects or future drafts, 226 00:11:31,200 --> 00:11:33,679 Speaker 1: which I have other issues with and now it's out 227 00:11:33,720 --> 00:11:36,600 Speaker 1: in the open, I think it opens the fair playing 228 00:11:36,640 --> 00:11:39,360 Speaker 1: ground a little bit more. I think we're all kind 229 00:11:39,440 --> 00:11:41,559 Speaker 1: of living in a tunnel if we think nobody was 230 00:11:42,000 --> 00:11:45,439 Speaker 1: receiving no cash compensation at any point, which came out 231 00:11:45,480 --> 00:11:47,960 Speaker 1: in basketball for a few different schools through the FBI 232 00:11:48,040 --> 00:11:50,880 Speaker 1: a few years ago. Right, I mean, the money is there, 233 00:11:50,960 --> 00:11:52,640 Speaker 1: the money has always been there. We might as well 234 00:11:52,720 --> 00:11:55,480 Speaker 1: let it be above the table. And rating them in 235 00:11:55,600 --> 00:11:58,520 Speaker 1: I think is different. Um, these are these are athletes, 236 00:11:58,600 --> 00:12:01,120 Speaker 1: they're they're good at what they're doing. They need to 237 00:12:01,520 --> 00:12:04,360 Speaker 1: understand how to balance that form of a life. And 238 00:12:04,480 --> 00:12:07,120 Speaker 1: one of my favorite quotes who I've heard came from 239 00:12:07,200 --> 00:12:11,079 Speaker 1: John Calipari is he runs personal finance with all of 240 00:12:11,200 --> 00:12:14,240 Speaker 1: his expected one and dunes and says, look, the first 241 00:12:14,320 --> 00:12:16,360 Speaker 1: million you make has got to stay in the bank. 242 00:12:16,760 --> 00:12:18,840 Speaker 1: You keep that in the bank, you keep that invested. 243 00:12:19,360 --> 00:12:21,160 Speaker 1: If you blow all the rest of it, you still 244 00:12:21,200 --> 00:12:23,720 Speaker 1: have something to live on. So I think this leads 245 00:12:23,760 --> 00:12:26,520 Speaker 1: to a world where we need We need academia, We 246 00:12:26,640 --> 00:12:31,080 Speaker 1: need places like Bloomberg to to give us useful podcasts 247 00:12:31,160 --> 00:12:34,319 Speaker 1: on these on these personal finance issues, to say, hey, 248 00:12:34,440 --> 00:12:36,439 Speaker 1: look this is how you handle it now that you 249 00:12:36,559 --> 00:12:38,480 Speaker 1: have money, because you're gonna come into a lot of money, 250 00:12:38,800 --> 00:12:40,319 Speaker 1: and when you come into that money, you need to 251 00:12:40,360 --> 00:12:42,599 Speaker 1: know what to do with it. See, this is what 252 00:12:42,800 --> 00:12:45,760 Speaker 1: you remind me of my mom when she said you're 253 00:12:45,760 --> 00:12:49,000 Speaker 1: always starting stuff. This is what you did. This is 254 00:12:49,040 --> 00:12:52,440 Speaker 1: what happened. Professor. You had talked about how name, image 255 00:12:52,440 --> 00:12:56,360 Speaker 1: and likeness certainly changes the landscape for student athletes, but 256 00:12:56,520 --> 00:13:00,920 Speaker 1: there are also these huge implications for the whole economy 257 00:13:01,000 --> 00:13:04,760 Speaker 1: and ecosystem of college sports overall, all the alumni donations 258 00:13:04,840 --> 00:13:09,640 Speaker 1: that come into sports programs, the stratospheric salaries of coaches. 259 00:13:09,760 --> 00:13:12,200 Speaker 1: We mentioned Nick Saban, he's doing quite well for himself. 260 00:13:12,840 --> 00:13:17,280 Speaker 1: Walk us through some of the unintended consequences on donations 261 00:13:17,360 --> 00:13:21,360 Speaker 1: and coaches salaries that you anticipate. Um. That was a 262 00:13:21,360 --> 00:13:24,000 Speaker 1: great way to say it, the unintended consequences, because we 263 00:13:24,120 --> 00:13:26,240 Speaker 1: think that we're just creating revenues that are going to 264 00:13:26,320 --> 00:13:30,280 Speaker 1: the student athletes. Um. But it does change the structure 265 00:13:30,559 --> 00:13:35,120 Speaker 1: of of athletics within the college atmosphere, right within within 266 00:13:35,240 --> 00:13:38,559 Speaker 1: the college athletic administration departments is going to change. And 267 00:13:38,880 --> 00:13:41,199 Speaker 1: and one of those big things I think is and 268 00:13:41,240 --> 00:13:43,959 Speaker 1: I'm an economist here, And as an economist, I say, okay, 269 00:13:44,080 --> 00:13:46,080 Speaker 1: there there are donors who donate a lot of money 270 00:13:46,080 --> 00:13:51,200 Speaker 1: to these athletic departments. And the donor often donates because 271 00:13:51,240 --> 00:13:53,720 Speaker 1: they support and want to see that athletic department and grow, 272 00:13:53,840 --> 00:13:56,800 Speaker 1: succeed or continue to succeed. And so when they look 273 00:13:56,840 --> 00:13:59,000 Speaker 1: at things like that. Right, So, if I have fifty 274 00:13:59,400 --> 00:14:01,679 Speaker 1: dollars that I'm getting ready to donate, um, but I 275 00:14:01,720 --> 00:14:03,959 Speaker 1: do own a car dealership down the road. UM. The 276 00:14:04,080 --> 00:14:07,120 Speaker 1: question is is my money better spent by donating fifty 277 00:14:07,520 --> 00:14:11,680 Speaker 1: dollars to the athletic department, whereas my money better spent 278 00:14:11,840 --> 00:14:13,800 Speaker 1: if I do an n I l deal with one 279 00:14:13,920 --> 00:14:17,599 Speaker 1: or a few players and spend on those players. Right. So, 280 00:14:17,720 --> 00:14:20,720 Speaker 1: I think the donors are are sitting back. I don't 281 00:14:20,760 --> 00:14:24,520 Speaker 1: think donations have started to drop drastically. But donation data 282 00:14:24,600 --> 00:14:28,240 Speaker 1: is really difficult to find. Um. And then most schools 283 00:14:28,240 --> 00:14:31,160 Speaker 1: are not willing willing to overly reveal too much information 284 00:14:31,160 --> 00:14:33,800 Speaker 1: about their donation data. UM. I would love to have 285 00:14:33,920 --> 00:14:35,640 Speaker 1: that data. I would love to see what happens over 286 00:14:35,680 --> 00:14:38,640 Speaker 1: the next few years. But the economist image sits back 287 00:14:38,680 --> 00:14:41,000 Speaker 1: and goes, look, there's there's clearly an incentive for some 288 00:14:41,160 --> 00:14:43,080 Speaker 1: donors to hold back a few bucks and sign them 289 00:14:43,120 --> 00:14:46,400 Speaker 1: on an I L deals And and it almost turns 290 00:14:46,440 --> 00:14:48,520 Speaker 1: into the point, depending on how big of a donation 291 00:14:48,600 --> 00:14:53,200 Speaker 1: you're giving, that you can become a recruiting mechanism. Right. So, um, 292 00:14:53,320 --> 00:14:58,440 Speaker 1: it's no longer just Alabama athletics recruiting or Clemson athletics recruiting. 293 00:14:58,840 --> 00:15:02,400 Speaker 1: It ends up being the donor base going hey, if 294 00:15:02,480 --> 00:15:04,800 Speaker 1: you come here, I've got a two million dollar contract 295 00:15:04,880 --> 00:15:07,400 Speaker 1: and waving that in the air. And so it hands 296 00:15:07,480 --> 00:15:10,040 Speaker 1: quite a bit of power over those potential donors through 297 00:15:10,120 --> 00:15:12,520 Speaker 1: these n I L deals, And I think that changes 298 00:15:12,600 --> 00:15:15,880 Speaker 1: the way we think about college recruitment and how it 299 00:15:16,000 --> 00:15:19,200 Speaker 1: works in college recruitment. Then the second side of that, 300 00:15:19,280 --> 00:15:24,840 Speaker 1: you talked about coaches salaries. The college athletic system is 301 00:15:25,320 --> 00:15:29,080 Speaker 1: kind of weird on this, Right, coaches leave the NFL, 302 00:15:30,040 --> 00:15:34,480 Speaker 1: they go back to college athletics and functionally get a 303 00:15:34,600 --> 00:15:39,240 Speaker 1: raise Jim Harbaugh. Right. And there is no system in 304 00:15:39,320 --> 00:15:42,000 Speaker 1: the world where you leave the major leagues to go 305 00:15:42,120 --> 00:15:44,520 Speaker 1: to the minor leagues. Right. We think of college and 306 00:15:44,600 --> 00:15:47,960 Speaker 1: I am a huge college athletics fan, but college athletics 307 00:15:48,040 --> 00:15:49,880 Speaker 1: for a lot of these players is getting them ready 308 00:15:49,920 --> 00:15:52,240 Speaker 1: for the pros. Right, the pros is where the big 309 00:15:52,360 --> 00:15:55,360 Speaker 1: money is. The pros is where the big talent is. Um, 310 00:15:55,640 --> 00:15:58,560 Speaker 1: this is the stepping stone, which is what is commonly 311 00:15:58,600 --> 00:16:00,400 Speaker 1: thought of as a minor league and some we don't 312 00:16:00,440 --> 00:16:02,800 Speaker 1: have a minor league system in football. The minor league 313 00:16:02,840 --> 00:16:06,200 Speaker 1: system in football is college football. And for coaches to 314 00:16:06,320 --> 00:16:10,120 Speaker 1: leave the NFL and go into the minor league system 315 00:16:10,200 --> 00:16:12,360 Speaker 1: and make those kind of moneis means that there was 316 00:16:12,760 --> 00:16:15,600 Speaker 1: something structurally wrong with the minor league system to begin with. 317 00:16:16,840 --> 00:16:19,760 Speaker 1: So current, Um, you're at Seton Hall. Basketball is the 318 00:16:19,840 --> 00:16:23,360 Speaker 1: biggest revenue sport at Seton Hall. You were a swimmer 319 00:16:23,400 --> 00:16:28,080 Speaker 1: in college. To your knowledge, have any Seaton Hall athletes 320 00:16:28,160 --> 00:16:32,280 Speaker 1: that the less high profile, less revenue producing sports like swimming, 321 00:16:32,400 --> 00:16:35,160 Speaker 1: like lacrosse, like track and field, been able to cash 322 00:16:35,200 --> 00:16:39,240 Speaker 1: in on name, image and likeness My understanding and I 323 00:16:39,480 --> 00:16:43,080 Speaker 1: have not asked that question, partially intentionally because I don't 324 00:16:43,080 --> 00:16:46,240 Speaker 1: want it to seem like I'm overbearing on my thoughts 325 00:16:46,280 --> 00:16:48,880 Speaker 1: of n I l with our athletic department, and for 326 00:16:49,000 --> 00:16:51,800 Speaker 1: full disclosure, I'm also a volunteer assistant swim coach here 327 00:16:51,840 --> 00:16:54,320 Speaker 1: at Seton Hall, so I I do assist the swim team, 328 00:16:54,800 --> 00:16:58,360 Speaker 1: but I try not to meld too much of my 329 00:16:58,560 --> 00:17:01,480 Speaker 1: research and economic interests into the coaching side. I go 330 00:17:01,640 --> 00:17:03,640 Speaker 1: and I coach. I come and I teach, and I 331 00:17:03,680 --> 00:17:06,360 Speaker 1: think about this stuff. My understanding is that there are 332 00:17:06,600 --> 00:17:10,600 Speaker 1: some small deals happening across the sports. UM. I have 333 00:17:10,800 --> 00:17:14,280 Speaker 1: not seen any massive deals in some of these what 334 00:17:14,400 --> 00:17:17,479 Speaker 1: we would call Olympic sports, but my understanding is there 335 00:17:17,520 --> 00:17:21,600 Speaker 1: are small deals going on throughout sprinkled throughout them. Some 336 00:17:21,760 --> 00:17:24,439 Speaker 1: student athletes have done a very good job of advertising 337 00:17:24,480 --> 00:17:27,119 Speaker 1: themselves and going out and finding these deals. For some 338 00:17:27,200 --> 00:17:29,480 Speaker 1: of the bigger names sports, they're they're coming to seek 339 00:17:29,640 --> 00:17:32,320 Speaker 1: those athletes. Professor, let me just follow up on your 340 00:17:32,359 --> 00:17:36,399 Speaker 1: point earlier about how there's something broken structurally within the 341 00:17:36,720 --> 00:17:40,680 Speaker 1: minor league of college athletics that coaches get paid so 342 00:17:40,840 --> 00:17:44,040 Speaker 1: much more once they coach in college football, for instance, 343 00:17:44,280 --> 00:17:46,320 Speaker 1: rather than in the major leagues in in the NFL. 344 00:17:46,480 --> 00:17:49,639 Speaker 1: Does name, image and likeness make this an even more 345 00:17:49,680 --> 00:17:51,920 Speaker 1: broken system or does it help fix it? So, I 346 00:17:52,000 --> 00:17:54,320 Speaker 1: think it's gonna appear as if it's more broken on 347 00:17:54,359 --> 00:17:56,440 Speaker 1: the surface and at the beginning, and the reason for 348 00:17:56,560 --> 00:17:59,560 Speaker 1: that is we still have large coaches salaries that we 349 00:17:59,640 --> 00:18:02,679 Speaker 1: have to pay. Yet some of the money is now 350 00:18:02,840 --> 00:18:07,080 Speaker 1: being pushed towards the student athletes. UM that could have 351 00:18:07,160 --> 00:18:10,439 Speaker 1: been pushed towards those coaches salaries in the past. UM. 352 00:18:10,520 --> 00:18:12,800 Speaker 1: Typically when we think about major leagues, right, we we 353 00:18:12,920 --> 00:18:16,359 Speaker 1: look at these leagues who who have collective bargaining agreements. Right, 354 00:18:16,440 --> 00:18:19,400 Speaker 1: a certain percentage of revenues go to the the athletes, 355 00:18:19,480 --> 00:18:21,960 Speaker 1: a certain percentage of revenues go to the owners. And 356 00:18:22,040 --> 00:18:25,119 Speaker 1: when you have these splits and revenues, that's how you 357 00:18:25,240 --> 00:18:28,840 Speaker 1: determine how much you can pay these coaches. And for 358 00:18:29,359 --> 00:18:33,080 Speaker 1: for historical perspective, the split has been zero percent student 359 00:18:33,160 --> 00:18:36,359 Speaker 1: athlete and all the revenues can go to buildings and coaches. 360 00:18:36,800 --> 00:18:40,080 Speaker 1: And so the arms race of building bigger and better 361 00:18:40,359 --> 00:18:43,320 Speaker 1: buildings was where the money was going. And the arms 362 00:18:43,440 --> 00:18:45,920 Speaker 1: race of hiring bigger name coaches that can get you 363 00:18:46,080 --> 00:18:48,800 Speaker 1: drafted in the NFL was where the money was going. 364 00:18:49,240 --> 00:18:52,200 Speaker 1: So we've we've added, we've taken that zero percent away. 365 00:18:52,320 --> 00:18:55,200 Speaker 1: Now there's money going towards the student athletes through n 366 00:18:55,280 --> 00:18:56,920 Speaker 1: i L. And because you can go to the student 367 00:18:56,960 --> 00:18:59,479 Speaker 1: athletes through the n i L deal, that that changes 368 00:18:59,520 --> 00:19:03,360 Speaker 1: the financial structure. Yet we're locked into some big, long 369 00:19:03,480 --> 00:19:06,119 Speaker 1: term contracts for quite a few of these coaches. In 370 00:19:06,200 --> 00:19:09,760 Speaker 1: an equilibrium sense, I would expect college coaching salaries to 371 00:19:09,800 --> 00:19:13,639 Speaker 1: fall on average. I would expect those revenues to be 372 00:19:13,800 --> 00:19:16,000 Speaker 1: paid towards student athletes. Right now, it has to be 373 00:19:16,119 --> 00:19:18,680 Speaker 1: indirectly through the donations that we talked about earlier, But 374 00:19:18,760 --> 00:19:22,320 Speaker 1: in an equilibrium sense, some sort of revenue sharing agreement 375 00:19:22,520 --> 00:19:25,200 Speaker 1: would make a lot of sense, which would bring down 376 00:19:25,359 --> 00:19:28,240 Speaker 1: coaches salaries. They would stop have to build, having to 377 00:19:28,359 --> 00:19:31,640 Speaker 1: build and put so much money into the into the buildings, 378 00:19:31,720 --> 00:19:34,239 Speaker 1: into the stadiums, in the locker rooms. Um, I've been 379 00:19:34,280 --> 00:19:36,800 Speaker 1: in quite a few of these locker rooms. They are fantastic, 380 00:19:37,280 --> 00:19:39,560 Speaker 1: But that was a recruiting tool. And now instead of 381 00:19:39,720 --> 00:19:44,600 Speaker 1: indirectly handing them benefits, oh, we have this PlayStation set 382 00:19:44,720 --> 00:19:46,359 Speaker 1: up in the locker rooms. The you guys can go 383 00:19:46,480 --> 00:19:49,159 Speaker 1: play video games in between practices and classes, and now 384 00:19:49,200 --> 00:19:51,479 Speaker 1: we can actually just hand you cash. And a lot 385 00:19:51,560 --> 00:19:53,760 Speaker 1: of these student athletes are kind of going, oh, do 386 00:19:53,880 --> 00:19:56,000 Speaker 1: I want to play PlayStation for free? Or do I 387 00:19:56,040 --> 00:19:58,680 Speaker 1: want to make a few thousand dollars? And that new 388 00:19:58,760 --> 00:20:01,600 Speaker 1: equilibrium is going to take some time. Right. As an economist, 389 00:20:01,640 --> 00:20:04,000 Speaker 1: we like to theoretically think about a world where we 390 00:20:04,080 --> 00:20:06,240 Speaker 1: just pulled the band aid off and everything goes beautifully, 391 00:20:06,560 --> 00:20:09,600 Speaker 1: but it'll be mildly chaotic for a few years until 392 00:20:09,600 --> 00:20:12,439 Speaker 1: a new equilibrium has met. But when that new equilibrium 393 00:20:12,520 --> 00:20:15,480 Speaker 1: is met, I think that we would expect less revenues 394 00:20:15,520 --> 00:20:19,840 Speaker 1: going towards those indirect payments to students and more revenues 395 00:20:19,880 --> 00:20:22,280 Speaker 1: going towards those direct payments. I go down to like 396 00:20:22,400 --> 00:20:24,840 Speaker 1: the place like Clemson, and they have a swimming pool, 397 00:20:24,880 --> 00:20:28,399 Speaker 1: they have a barbershop, they have miniature golf, they have 398 00:20:28,520 --> 00:20:30,800 Speaker 1: a water slide, and then they go out and the 399 00:20:30,840 --> 00:20:33,360 Speaker 1: eliminate the men's and women's track and field. I mean, 400 00:20:33,440 --> 00:20:36,280 Speaker 1: it's just it's just drives me out of my mind 401 00:20:36,560 --> 00:20:38,880 Speaker 1: down there. And I know every school has its own 402 00:20:38,920 --> 00:20:40,680 Speaker 1: priorities and they do whatever they want to do with 403 00:20:40,760 --> 00:20:43,280 Speaker 1: the money they have right here. But are we ever 404 00:20:43,320 --> 00:20:47,520 Speaker 1: going to have a balance in college athletics ever? Well, 405 00:20:47,560 --> 00:20:49,359 Speaker 1: we ever have a balance. Um, we will have a 406 00:20:49,480 --> 00:20:51,600 Speaker 1: new balance. It will have some balance. I don't know 407 00:20:52,280 --> 00:20:55,400 Speaker 1: what balance you're trying to optimize over. Um, we will 408 00:20:55,440 --> 00:20:59,520 Speaker 1: certainly have a balance of more student athletes making money. Um. 409 00:20:59,640 --> 00:21:03,680 Speaker 1: It was asked earlier whether the non big time sports 410 00:21:03,720 --> 00:21:05,440 Speaker 1: are going to make money. I think the Olympic sports 411 00:21:05,520 --> 00:21:08,520 Speaker 1: will have their place. Uh. The Olympic sports will make 412 00:21:08,800 --> 00:21:11,400 Speaker 1: some money. Um, they'll never make nearly as much money 413 00:21:11,440 --> 00:21:15,280 Speaker 1: as the big time sports are are football and basketball programs. Um, 414 00:21:15,840 --> 00:21:18,040 Speaker 1: but they they will have their space. They will have 415 00:21:18,440 --> 00:21:22,280 Speaker 1: they will have an area as they will have a 416 00:21:22,320 --> 00:21:24,640 Speaker 1: place where they can now start to make those type 417 00:21:24,640 --> 00:21:28,040 Speaker 1: of revenues and moneys for themselves. Um. Will there be balanced? 418 00:21:28,080 --> 00:21:30,359 Speaker 1: I mean again, I would my bias. UM. I actually 419 00:21:30,400 --> 00:21:33,119 Speaker 1: coached swimming at Clemson before I came up here to 420 00:21:33,119 --> 00:21:35,919 Speaker 1: see in Hall, and shortly after I came up here 421 00:21:35,960 --> 00:21:37,480 Speaker 1: to see Hall, they cut the swim team. So they 422 00:21:37,520 --> 00:21:39,400 Speaker 1: do have a swimble but they cut their swim team 423 00:21:39,400 --> 00:21:43,000 Speaker 1: after after I left. The Olympic sports have always had 424 00:21:43,080 --> 00:21:45,800 Speaker 1: those issues. They're the first and easiest ones to put 425 00:21:45,880 --> 00:21:48,119 Speaker 1: on the cutting block as soon as you get rid 426 00:21:48,160 --> 00:21:50,679 Speaker 1: of as soon as there's a bunch of downturn, right, 427 00:21:50,760 --> 00:21:52,520 Speaker 1: you get rid of some sports, it's the easiest to 428 00:21:52,560 --> 00:21:55,040 Speaker 1: cut the ones that aren't generating any revenues. I think 429 00:21:55,160 --> 00:21:58,520 Speaker 1: often they missed their accounting on those type of things. 430 00:21:59,119 --> 00:22:01,520 Speaker 1: For instance, they cut swim team, but they still have 431 00:22:01,560 --> 00:22:04,800 Speaker 1: a swimpool down at Clemson, And usually when the swim 432 00:22:04,920 --> 00:22:07,680 Speaker 1: team is using the swim pool, they budget the cost 433 00:22:07,800 --> 00:22:10,320 Speaker 1: of running the swim pool through the athletic department, But 434 00:22:10,400 --> 00:22:12,520 Speaker 1: the university still runs a swim pool. Right, so they 435 00:22:12,520 --> 00:22:14,440 Speaker 1: didn't cut their costs nearly as much as they thought 436 00:22:14,440 --> 00:22:17,320 Speaker 1: they were going to. I think that this is where 437 00:22:17,920 --> 00:22:20,679 Speaker 1: issues of Title nine come up, issues of equality come up. 438 00:22:20,720 --> 00:22:22,240 Speaker 1: I know that's one of the biggest things I've heard 439 00:22:22,240 --> 00:22:25,720 Speaker 1: athletic directors talk about. How does n i L deals 440 00:22:25,800 --> 00:22:29,640 Speaker 1: or how do n I L deals comply with Title nine? Right? 441 00:22:29,720 --> 00:22:32,520 Speaker 1: Are we we obligated to make sure the student athletes 442 00:22:32,880 --> 00:22:35,920 Speaker 1: are making revenues through their n I L deals that 443 00:22:36,040 --> 00:22:40,199 Speaker 1: are equal cross genders. And since they are outside contracts 444 00:22:40,359 --> 00:22:44,000 Speaker 1: working with those student athletes, the athletics departments have very 445 00:22:44,040 --> 00:22:47,280 Speaker 1: little say in what those contracts are. Right, they should 446 00:22:47,320 --> 00:22:49,080 Speaker 1: have no say in what those contracts are. They're just 447 00:22:49,080 --> 00:22:51,920 Speaker 1: supposed to be helping the student athletes learn how the 448 00:22:52,000 --> 00:22:54,560 Speaker 1: process works and then they go seek their own deals. 449 00:22:55,040 --> 00:22:58,120 Speaker 1: But if you start to get large contracts within one 450 00:22:58,240 --> 00:23:00,879 Speaker 1: gender and not in the other, how does that How 451 00:23:00,960 --> 00:23:03,560 Speaker 1: does that issue get resolved through Title nine and what 452 00:23:03,720 --> 00:23:07,440 Speaker 1: has traditionally been thought of as a gendera quality issue 453 00:23:07,520 --> 00:23:11,840 Speaker 1: within athletic departments. And again we're going to see more 454 00:23:11,960 --> 00:23:14,320 Speaker 1: and more donors using their money for things like that, 455 00:23:14,520 --> 00:23:18,600 Speaker 1: which means there's less ancillary funds available for swimming and track, 456 00:23:19,080 --> 00:23:23,240 Speaker 1: and so those are going to be interesting issues moving forward. 457 00:23:23,640 --> 00:23:25,879 Speaker 1: A lot of the conferences have a minimum number of 458 00:23:26,000 --> 00:23:28,320 Speaker 1: teams that you have to have in order to be 459 00:23:28,400 --> 00:23:31,200 Speaker 1: in that conference. I think as long as the conferences 460 00:23:31,240 --> 00:23:33,680 Speaker 1: don't change those rules, we'll still see quite a few 461 00:23:33,760 --> 00:23:36,800 Speaker 1: sports at all these big time schools. But it would 462 00:23:36,800 --> 00:23:39,639 Speaker 1: get really interesting if the conference started to say you 463 00:23:39,720 --> 00:23:41,880 Speaker 1: can have less sorts and still be a Big East 464 00:23:41,920 --> 00:23:44,639 Speaker 1: team or still be an ACC team. I want to 465 00:23:44,680 --> 00:23:47,119 Speaker 1: talk about a paper that you co wrote, and it 466 00:23:47,240 --> 00:23:51,120 Speaker 1: was referenced by Forbes in the story last month. Those 467 00:23:51,240 --> 00:23:55,440 Speaker 1: Cinderella teams, especially in the n C Double A basketball tournament, 468 00:23:55,760 --> 00:24:00,160 Speaker 1: and of course my favorite St. Peter's. Nobody knew who 469 00:24:00,240 --> 00:24:03,639 Speaker 1: in the world St. Peter's was except people in New Jersey, 470 00:24:04,000 --> 00:24:06,560 Speaker 1: and all of a sudden, they just routed a lot 471 00:24:06,640 --> 00:24:10,159 Speaker 1: of teams, big name teams, and here comes the small 472 00:24:10,280 --> 00:24:13,639 Speaker 1: college that could, professor, what does it mean for a 473 00:24:13,760 --> 00:24:17,720 Speaker 1: small college when you have some sort of Cinderella run 474 00:24:17,880 --> 00:24:22,440 Speaker 1: like that? The Cinderella run is uh an amazing time 475 00:24:22,480 --> 00:24:25,040 Speaker 1: to advertise for your school. Right, like you said, nobody 476 00:24:25,160 --> 00:24:27,760 Speaker 1: knew who St. Peter's was. They make this run in 477 00:24:27,800 --> 00:24:31,680 Speaker 1: the basketball tournament, the buzzes around who is St. Peter's, 478 00:24:31,720 --> 00:24:34,560 Speaker 1: What school is that? Who are they beating? They beat Kentucky, 479 00:24:34,800 --> 00:24:39,240 Speaker 1: Really Kentucky. This is amazing. So the Cinderella run really 480 00:24:39,359 --> 00:24:43,000 Speaker 1: gets the school's name on the map, and because of 481 00:24:43,160 --> 00:24:48,000 Speaker 1: that that it really does have a big impact on 482 00:24:48,200 --> 00:24:51,000 Speaker 1: that school. But it's not nearly as big of an 483 00:24:51,040 --> 00:24:55,280 Speaker 1: impact as some people involved in the programs want to say. Right, 484 00:24:55,320 --> 00:24:59,320 Speaker 1: if I was a basketball coach justifying my amazingly large salary, 485 00:24:59,720 --> 00:25:01,679 Speaker 1: one of things I would do is talk about how 486 00:25:01,960 --> 00:25:04,359 Speaker 1: massive my Cinderella run was. There was one study that 487 00:25:04,440 --> 00:25:06,280 Speaker 1: came out said it was worth a hundred million dollars 488 00:25:06,359 --> 00:25:08,840 Speaker 1: worth of advertising, and they did that through an advertising 489 00:25:09,160 --> 00:25:12,560 Speaker 1: valuation plan, which is advertising that can't be bought. So 490 00:25:12,640 --> 00:25:14,560 Speaker 1: it's hard to say what a hundred million dollars buys 491 00:25:14,600 --> 00:25:17,400 Speaker 1: you in advertising that can't be bought because you can't 492 00:25:17,440 --> 00:25:19,280 Speaker 1: call up Sports Center and say just talk about my 493 00:25:19,320 --> 00:25:23,560 Speaker 1: school a bunch during Sports Center. Um. Right, Um, but 494 00:25:23,800 --> 00:25:26,280 Speaker 1: even UH coach K came out and said, oh, it's 495 00:25:26,280 --> 00:25:29,040 Speaker 1: worth at least ten million dollars. Our estimates don't show 496 00:25:29,040 --> 00:25:31,840 Speaker 1: anywhere near that, um, somewhere between one and three three 497 00:25:31,920 --> 00:25:35,440 Speaker 1: and a half million dollars. If if they can increase 498 00:25:35,520 --> 00:25:39,000 Speaker 1: their recruitment, increase and retain those students for four years, 499 00:25:39,440 --> 00:25:41,639 Speaker 1: A one year bump is closer to eight hundred a 500 00:25:41,680 --> 00:25:44,040 Speaker 1: million dollars. And if they retain those students for four years, 501 00:25:44,440 --> 00:25:46,520 Speaker 1: it looks like they might make three to three and 502 00:25:46,520 --> 00:25:49,760 Speaker 1: a half million dollars, So they'll make some revenues off 503 00:25:49,800 --> 00:25:52,880 Speaker 1: of additional students. Uh. Student quality could get a little 504 00:25:52,920 --> 00:25:55,280 Speaker 1: bit better. Um, but there's been a lot of Cinderella 505 00:25:55,359 --> 00:25:58,000 Speaker 1: runs throughout the years. I had a debate with one 506 00:25:58,040 --> 00:26:01,119 Speaker 1: of our former athletic directors where he said, oh, no, 507 00:26:01,359 --> 00:26:03,240 Speaker 1: this is what put Gonzaga on the map. And my 508 00:26:03,359 --> 00:26:06,000 Speaker 1: response to that is, well, okay, fine, but what about 509 00:26:06,080 --> 00:26:09,399 Speaker 1: like Providence Cinderella run in eighty seven, or Cleveland States 510 00:26:09,400 --> 00:26:11,720 Speaker 1: in eighty six, or Tall fla and ninety four you 511 00:26:11,840 --> 00:26:16,080 Speaker 1: teach had a new good ninety seven or Northern Iowa. Right, Um, 512 00:26:16,240 --> 00:26:18,480 Speaker 1: it's easy to cherry pick the data and say Gonzaga 513 00:26:18,640 --> 00:26:20,959 Speaker 1: made a run and now everybody knows who they are 514 00:26:21,240 --> 00:26:23,600 Speaker 1: versus all the runs we've seen over the years and 515 00:26:24,040 --> 00:26:26,720 Speaker 1: schools that have We haven't forgot about the schools, but 516 00:26:26,800 --> 00:26:29,320 Speaker 1: they certainly don't have the cache that Gonzaga carries with 517 00:26:29,400 --> 00:26:31,480 Speaker 1: it right now. Yeah, well, we all love a good 518 00:26:32,119 --> 00:26:34,120 Speaker 1: Cinderella run. We we spent a lot of time talking 519 00:26:34,160 --> 00:26:36,640 Speaker 1: about St. Peter's and and how it's now on the map. 520 00:26:37,080 --> 00:26:40,320 Speaker 1: I'm curious to to just combine, um, this part of 521 00:26:40,320 --> 00:26:43,879 Speaker 1: the conversation with name, image and likeness. What what do 522 00:26:44,000 --> 00:26:47,800 Speaker 1: you think in terms of Duke basketball players deciding that 523 00:26:47,880 --> 00:26:49,639 Speaker 1: they're going to go pro they're no longer going to 524 00:26:49,720 --> 00:26:53,240 Speaker 1: play at Duke. Are more college athletes going to be 525 00:26:53,320 --> 00:26:57,359 Speaker 1: incentivized to stay at school because they now get paid 526 00:26:57,800 --> 00:27:00,280 Speaker 1: or will they continue to turn pro? Or is that 527 00:27:00,520 --> 00:27:04,560 Speaker 1: decision making process separate from the name, image and likeness. Well, 528 00:27:04,600 --> 00:27:07,479 Speaker 1: I think the margins of income between the two are 529 00:27:07,520 --> 00:27:10,040 Speaker 1: slightly different. If you can go high in the draft, 530 00:27:10,440 --> 00:27:11,960 Speaker 1: I don't think the n I L deals are going 531 00:27:12,000 --> 00:27:14,159 Speaker 1: to quite compensate you for what you can make in 532 00:27:14,240 --> 00:27:17,040 Speaker 1: the major leagues, but I do think that there are 533 00:27:17,080 --> 00:27:18,880 Speaker 1: a lot of student athletes who are going to stay 534 00:27:18,960 --> 00:27:21,520 Speaker 1: longer because they can make some money off of it. 535 00:27:22,000 --> 00:27:25,240 Speaker 1: We were talking about Olympic sports earlier. The gymnastics competition 536 00:27:25,320 --> 00:27:28,760 Speaker 1: just finished up in collegiate gymnastics, UM, which is one 537 00:27:28,800 --> 00:27:30,920 Speaker 1: of the sports I really enjoy watching. My wife is 538 00:27:30,960 --> 00:27:34,240 Speaker 1: an next gymnast, her sisters was a college gymnast, and 539 00:27:34,840 --> 00:27:36,880 Speaker 1: it was it's it's fun to watch. And what's even 540 00:27:36,960 --> 00:27:40,040 Speaker 1: more exciting is this is the first time we've seen 541 00:27:40,119 --> 00:27:44,320 Speaker 1: a large cohort of Olympic gymnasts go to college after 542 00:27:44,440 --> 00:27:50,199 Speaker 1: the Olympics. Yeah, Sunny Lee, Um, Jade Kerry was in there. Um, 543 00:27:50,280 --> 00:27:51,920 Speaker 1: there's quite a few. I think there are five or 544 00:27:51,960 --> 00:27:55,119 Speaker 1: six at the nationals, and it was it was amazing 545 00:27:55,200 --> 00:27:57,680 Speaker 1: to watch, right, And it was amazing to watch because 546 00:27:57,720 --> 00:28:00,280 Speaker 1: you knew the names. You've got to see the Olympic ends. 547 00:28:00,320 --> 00:28:02,760 Speaker 1: You've got to learn new names by doing it. But 548 00:28:02,920 --> 00:28:05,119 Speaker 1: that never happened. And one of the arguments is that 549 00:28:05,280 --> 00:28:07,919 Speaker 1: happened because of n I l Right, it happened because 550 00:28:08,359 --> 00:28:10,320 Speaker 1: they used to go on tours and that was their 551 00:28:10,359 --> 00:28:12,520 Speaker 1: only way to make money after the Olympics, but now 552 00:28:12,640 --> 00:28:17,159 Speaker 1: they have the ability to make money post Olympics by 553 00:28:17,240 --> 00:28:20,080 Speaker 1: still going into college athletics. And I think it draws 554 00:28:20,400 --> 00:28:24,560 Speaker 1: that talent in and it keeps the marginal player there 555 00:28:24,640 --> 00:28:27,639 Speaker 1: for a little bit longer because they might stay and 556 00:28:27,680 --> 00:28:30,440 Speaker 1: try to increase their draft prospect but be able to 557 00:28:30,480 --> 00:28:32,360 Speaker 1: make a little money along the way and not need 558 00:28:32,440 --> 00:28:35,400 Speaker 1: to jump straight into the draft just to make some money. Correct, 559 00:28:35,480 --> 00:28:37,320 Speaker 1: If I want to go back to this thing you 560 00:28:37,400 --> 00:28:40,480 Speaker 1: alluded to our earlier in this interview of financial literacy 561 00:28:40,600 --> 00:28:43,600 Speaker 1: of college students and especially those that turned pros. And 562 00:28:44,320 --> 00:28:46,240 Speaker 1: to make a long story short, I've been involved with 563 00:28:46,320 --> 00:28:49,080 Speaker 1: this program called Credit for Life here in Massachusetts, and 564 00:28:49,240 --> 00:28:52,680 Speaker 1: we have one coming up about high school juniors. They 565 00:28:52,760 --> 00:28:55,080 Speaker 1: select a profession. They could be a nurse, they could 566 00:28:55,080 --> 00:28:58,200 Speaker 1: be a lawyer, that they could be a college professor. 567 00:28:58,520 --> 00:29:00,960 Speaker 1: They're given a salary. Then they go around to each book, 568 00:29:01,000 --> 00:29:03,280 Speaker 1: they go to housing, they go to transportation, they go 569 00:29:03,400 --> 00:29:07,000 Speaker 1: to fun fun funding which they love um. And then 570 00:29:07,040 --> 00:29:08,920 Speaker 1: when they come around the end, they all have they 571 00:29:08,960 --> 00:29:10,640 Speaker 1: have an app with their iPad on their phone and 572 00:29:10,680 --> 00:29:13,200 Speaker 1: they look how much they have left over at the 573 00:29:13,280 --> 00:29:14,800 Speaker 1: end of the month, or how much they're in the 574 00:29:14,880 --> 00:29:17,240 Speaker 1: hole at the end of the month. If we don't 575 00:29:17,320 --> 00:29:20,920 Speaker 1: run programs like this, are we're failing those that are 576 00:29:20,960 --> 00:29:23,040 Speaker 1: going to come into money very very quickly, like that 577 00:29:23,320 --> 00:29:25,360 Speaker 1: the professional app the college athlete who is going to 578 00:29:25,440 --> 00:29:27,240 Speaker 1: turn pro and all of a sudden just find his 579 00:29:27,400 --> 00:29:30,600 Speaker 1: or her financial world is going to change immediately. So 580 00:29:30,680 --> 00:29:32,360 Speaker 1: I'm going to give you a wishy washy answer, which 581 00:29:32,360 --> 00:29:33,920 Speaker 1: I don't think is what you want, but I think 582 00:29:33,960 --> 00:29:36,480 Speaker 1: it's the truth, which is I love the program that 583 00:29:36,520 --> 00:29:39,920 Speaker 1: you're doing. I also work for a nonprofit, the Foundation 584 00:29:39,960 --> 00:29:42,360 Speaker 1: for Economic Education, where I actually go into high schools 585 00:29:42,360 --> 00:29:45,560 Speaker 1: and do a financial lecture. I take a different approach 586 00:29:45,560 --> 00:29:48,600 Speaker 1: where I go, minimize all your expenses, save as much 587 00:29:48,600 --> 00:29:50,280 Speaker 1: as possible, and then I do the math to show 588 00:29:50,360 --> 00:29:53,480 Speaker 1: them how much that that savings grows over time, which 589 00:29:53,520 --> 00:29:57,720 Speaker 1: turns into a personal lifetime endowment, so to speak, which 590 00:29:57,800 --> 00:29:59,760 Speaker 1: was kind of what Kyla Party was saying when he said, 591 00:29:59,760 --> 00:30:02,360 Speaker 1: see of your first million and live off the interest 592 00:30:02,400 --> 00:30:05,160 Speaker 1: of that for the rest of your life because you 593 00:30:05,200 --> 00:30:07,760 Speaker 1: always have that money to lean back on. I think 594 00:30:07,840 --> 00:30:10,760 Speaker 1: that those programs are really important. The problem is is 595 00:30:10,840 --> 00:30:13,200 Speaker 1: that that I'm a professor, I teach classes I've gotten 596 00:30:13,200 --> 00:30:17,480 Speaker 1: into these high schools. Those programs are are great for 597 00:30:17,600 --> 00:30:21,600 Speaker 1: the enthusiastic that care at that point in time, but 598 00:30:21,720 --> 00:30:23,760 Speaker 1: there are so many people that don't care at that 599 00:30:23,840 --> 00:30:25,640 Speaker 1: point in time because they see no light at the 600 00:30:25,720 --> 00:30:27,960 Speaker 1: end of the tunnel, they see no money coming in. 601 00:30:28,520 --> 00:30:31,280 Speaker 1: They see it as a point list task that their 602 00:30:31,320 --> 00:30:34,200 Speaker 1: teacher made them do because they were told, you have 603 00:30:34,280 --> 00:30:37,720 Speaker 1: to come and do this project. Whereas when they come 604 00:30:37,760 --> 00:30:40,400 Speaker 1: into the money and they actually start seeing coming in 605 00:30:40,720 --> 00:30:45,320 Speaker 1: it coming in, it becomes real. And so I fully 606 00:30:45,440 --> 00:30:47,640 Speaker 1: support that program that you talked about that you're doing. 607 00:30:47,720 --> 00:30:49,760 Speaker 1: That is great, That is awesome. I hope one of 608 00:30:49,800 --> 00:30:52,200 Speaker 1: those booths was retirement and see if they can just 609 00:30:52,320 --> 00:30:54,600 Speaker 1: dump all their money into that from the beginning, because 610 00:30:54,640 --> 00:30:58,480 Speaker 1: the mathematical um exponential function of that growing over time 611 00:30:58,560 --> 00:31:03,040 Speaker 1: is amazing. First stop, yes, exactly, go dump as much 612 00:31:03,080 --> 00:31:04,880 Speaker 1: as you can into this booth events see what you 613 00:31:04,960 --> 00:31:08,760 Speaker 1: have left. But it needs to continue, right because those 614 00:31:08,840 --> 00:31:10,840 Speaker 1: kids might have a lot of fun that day. They 615 00:31:11,040 --> 00:31:13,000 Speaker 1: I hope they get a lot out of it. Some 616 00:31:13,160 --> 00:31:16,080 Speaker 1: of them may just be going through the exercise because 617 00:31:16,120 --> 00:31:18,560 Speaker 1: it got amount of class or whatever other reason they 618 00:31:18,640 --> 00:31:20,360 Speaker 1: chose to do it. But we need to do it 619 00:31:20,400 --> 00:31:22,800 Speaker 1: again once they start to have money. This needs to 620 00:31:22,880 --> 00:31:27,680 Speaker 1: be a continual conversation. I think American society is woefully 621 00:31:27,800 --> 00:31:30,800 Speaker 1: under prepared to have money talks because it is taboo. 622 00:31:31,240 --> 00:31:33,720 Speaker 1: It needs to be a more open discussion. It needs 623 00:31:33,760 --> 00:31:36,400 Speaker 1: to be a more willing discussion. And you need to 624 00:31:36,480 --> 00:31:40,760 Speaker 1: find money mentors, just like you find a mentor in basketball, 625 00:31:40,960 --> 00:31:44,280 Speaker 1: or a mentor in your professors or teachers, and a 626 00:31:44,400 --> 00:31:47,000 Speaker 1: mentor for anyone who wants to go into podcasting. You 627 00:31:47,080 --> 00:31:49,240 Speaker 1: go find somebody who does that that can be your 628 00:31:49,280 --> 00:31:52,520 Speaker 1: mentor to join that type of an industry. You need 629 00:31:52,600 --> 00:31:55,560 Speaker 1: to have money mentors. You need to have a continual process. 630 00:31:56,040 --> 00:31:58,000 Speaker 1: I love, I would love to hear more about what 631 00:31:58,080 --> 00:32:01,520 Speaker 1: you're doing up there in Massachusetts. Um, but those programs 632 00:32:01,560 --> 00:32:03,160 Speaker 1: are great and we need more of it. Well. The 633 00:32:03,400 --> 00:32:05,440 Speaker 1: the look on their faces when they come around after 634 00:32:05,520 --> 00:32:09,840 Speaker 1: they've hit some of the other boosts like health and wellness, food, nutrition, uh, 635 00:32:09,960 --> 00:32:16,040 Speaker 1: investment savings, etcetera, is like, huh, what you know? I mean, 636 00:32:16,880 --> 00:32:18,640 Speaker 1: and and and then of course they're young, they're high 637 00:32:18,640 --> 00:32:21,640 Speaker 1: school juniors, but I mean, it's never too early. But 638 00:32:21,800 --> 00:32:25,960 Speaker 1: I'm just constantly amazed. And then they really ask intelligent 639 00:32:26,080 --> 00:32:27,800 Speaker 1: questions after a while. I mean, some of the kids 640 00:32:27,840 --> 00:32:29,200 Speaker 1: are there to goof off and they sit in the 641 00:32:29,240 --> 00:32:30,880 Speaker 1: bleachers and they just do what they have to do. 642 00:32:31,040 --> 00:32:32,880 Speaker 1: But I would say the majority of the kids are 643 00:32:32,920 --> 00:32:34,800 Speaker 1: really it's it's a wake up call for him. I 644 00:32:34,840 --> 00:32:36,680 Speaker 1: can think of some adults who could benefit from this. 645 00:32:37,400 --> 00:32:41,240 Speaker 1: I'm listening right now exactly I you know, I and 646 00:32:41,320 --> 00:32:43,040 Speaker 1: then I will wrap this up. But I gotta tell 647 00:32:43,120 --> 00:32:46,120 Speaker 1: that my son, my youngest son, he's a junior, and 648 00:32:46,480 --> 00:32:49,240 Speaker 1: he this all goes back to n I l about 649 00:32:49,320 --> 00:32:53,000 Speaker 1: taxes and all the other stuff, and he says to me, 650 00:32:53,600 --> 00:32:56,920 Speaker 1: he says, Dad, I gotta pay taxes. You know how 651 00:32:57,040 --> 00:33:01,000 Speaker 1: much I gotta pay in taxes? Eighty dollars. And I'm like, 652 00:33:01,280 --> 00:33:05,560 Speaker 1: shut up. You wait until you you get as old 653 00:33:05,640 --> 00:33:08,160 Speaker 1: as your old man here with the gray hair, You'll 654 00:33:09,360 --> 00:33:12,040 Speaker 1: you need this class. So Lyncy, I might send them 655 00:33:12,080 --> 00:33:14,200 Speaker 1: to unit and have a talk, you know. And that's 656 00:33:14,240 --> 00:33:15,880 Speaker 1: that's that taxes is a good thing. Because I want 657 00:33:15,880 --> 00:33:17,600 Speaker 1: to bring this up because the you know, we're in 658 00:33:17,680 --> 00:33:21,080 Speaker 1: the NFL draft season here, and last year the number 659 00:33:21,120 --> 00:33:23,920 Speaker 1: one draft pick was Trevor Lawrence out of Clemson, drafted 660 00:33:23,960 --> 00:33:27,480 Speaker 1: by the Jacksonville Jaguars. State of Florida has no state 661 00:33:27,520 --> 00:33:31,640 Speaker 1: income tax. The number two pick was Zack Wilson, who 662 00:33:31,720 --> 00:33:34,320 Speaker 1: got selected by the Jets. Who has to live and 663 00:33:34,400 --> 00:33:37,880 Speaker 1: work in New Jersey. Now their salaries are slotted by 664 00:33:37,920 --> 00:33:40,040 Speaker 1: the NFL. They're basically making the same That four year 665 00:33:40,080 --> 00:33:43,600 Speaker 1: package is worth roughly thirty four million dollars. What are 666 00:33:43,640 --> 00:33:46,440 Speaker 1: the financial implications of playing in New Jersey versus playing 667 00:33:46,480 --> 00:33:49,760 Speaker 1: in Florida? Professor, The tax structure is certainly different. There 668 00:33:49,920 --> 00:33:53,080 Speaker 1: are there's more to it than income tax. Right. Um, 669 00:33:53,160 --> 00:33:57,080 Speaker 1: New Jersey, where I am, is a high income tax state. 670 00:33:57,120 --> 00:34:01,120 Speaker 1: We also have high property taxes. Um sale sales taxes 671 00:34:01,200 --> 00:34:04,920 Speaker 1: actually not horrible certain items. It's it's bearable or or 672 00:34:05,040 --> 00:34:08,600 Speaker 1: non existent. In non income tax state, sales tax tends 673 00:34:08,600 --> 00:34:12,560 Speaker 1: to be relatively high. Some states that have lower state 674 00:34:12,680 --> 00:34:16,000 Speaker 1: income tax have local city taxes that raise it. I 675 00:34:16,080 --> 00:34:19,759 Speaker 1: think it's a lot more, a lot more complex than 676 00:34:19,840 --> 00:34:22,719 Speaker 1: most people think they think going to one state. Might 677 00:34:22,760 --> 00:34:24,760 Speaker 1: have a friend who just moved to New Jersey from Texas, 678 00:34:24,840 --> 00:34:27,080 Speaker 1: and she was talking about the income tax here, but 679 00:34:27,560 --> 00:34:30,359 Speaker 1: she realized really quick that our sales tax was much lower, right, 680 00:34:30,520 --> 00:34:33,040 Speaker 1: I mean, so um, it's much more complex than that. 681 00:34:33,120 --> 00:34:36,959 Speaker 1: But absolutely those things matter. It's a cost of living, 682 00:34:37,040 --> 00:34:40,279 Speaker 1: it's a lifestyle. UM. Now that I have children, you 683 00:34:40,360 --> 00:34:43,120 Speaker 1: mentioned your child's one of your children is a junior. 684 00:34:43,200 --> 00:34:45,600 Speaker 1: I have three kids in the school system. Um, I 685 00:34:45,719 --> 00:34:48,160 Speaker 1: live in a higher tax area, but I choose that 686 00:34:48,239 --> 00:34:51,080 Speaker 1: for a good school system. UM. So, long term, I 687 00:34:51,160 --> 00:34:54,160 Speaker 1: imagine most people are getting drafted first the first round 688 00:34:54,160 --> 00:34:56,960 Speaker 1: in the NFL don't have too many children. UM. But 689 00:34:57,560 --> 00:35:00,120 Speaker 1: there's there's a lot going on within that system. But 690 00:35:00,200 --> 00:35:05,680 Speaker 1: there's certainly inequalities in the UH state tax system. UM. 691 00:35:05,760 --> 00:35:07,480 Speaker 1: But there are lots of different metrics that you have 692 00:35:07,520 --> 00:35:10,359 Speaker 1: to think about, including that sales tax and property tax 693 00:35:10,400 --> 00:35:14,720 Speaker 1: and everything else. UM. So the state income tax matters, 694 00:35:15,040 --> 00:35:17,320 Speaker 1: it's certainly not the only part that matters. Um. And 695 00:35:17,360 --> 00:35:19,839 Speaker 1: there's certainly a lot of a lot of different parts 696 00:35:19,880 --> 00:35:22,919 Speaker 1: of that system that make it amazingly complex. Which brings 697 00:35:23,000 --> 00:35:25,360 Speaker 1: us back to one of the original questions of of 698 00:35:25,800 --> 00:35:28,000 Speaker 1: what do we do now that these student athletes are 699 00:35:28,040 --> 00:35:31,880 Speaker 1: being taxed? Um? And and and another question most pro 700 00:35:32,040 --> 00:35:35,040 Speaker 1: athletes not only have to pay their taxes where they live, 701 00:35:35,239 --> 00:35:37,560 Speaker 1: but they have to pay it where they play. UM. 702 00:35:37,680 --> 00:35:39,759 Speaker 1: So they have to pay income tax for all the 703 00:35:39,800 --> 00:35:42,319 Speaker 1: different cities that they go and play games at, which 704 00:35:42,360 --> 00:35:44,719 Speaker 1: also tends to equate it across the NFL and Major 705 00:35:44,800 --> 00:35:47,400 Speaker 1: League Baseball because they're going to so many different cities 706 00:35:47,440 --> 00:35:49,200 Speaker 1: that they have to pay the local tax in that 707 00:35:49,360 --> 00:35:52,719 Speaker 1: city when they participate in that city. Um, well, n 708 00:35:52,800 --> 00:35:56,080 Speaker 1: I l force them to pay their deals when they 709 00:35:56,160 --> 00:35:59,520 Speaker 1: go play other schools, when Clemson travels to Alabama or 710 00:35:59,600 --> 00:36:02,080 Speaker 1: plays out of state or plays in the Sugar Bowl 711 00:36:02,160 --> 00:36:05,800 Speaker 1: or anywhere else. That is another complex question. Kurt Runoff, 712 00:36:05,880 --> 00:36:09,480 Speaker 1: Professor of Economics and Finance at Seatonhole University. Thank you 713 00:36:09,640 --> 00:36:12,080 Speaker 1: so much, sir for taking the time out and talking 714 00:36:12,160 --> 00:36:14,080 Speaker 1: with us. It was a lot of fun, and of 715 00:36:14,160 --> 00:36:16,520 Speaker 1: course you dropped a lot of knowledge on us. Thank you, sir, 716 00:36:17,239 --> 00:36:18,839 Speaker 1: Thank you for inviting me. I had a great time. 717 00:36:19,040 --> 00:36:23,360 Speaker 1: That's really fun. Thank you so much. Professor. You're always, 718 00:36:23,640 --> 00:36:26,120 Speaker 1: like I said, he lays a lot of knowledge on us. 719 00:36:26,640 --> 00:36:29,640 Speaker 1: And the phrase that you was reining in if you 720 00:36:29,719 --> 00:36:33,000 Speaker 1: were our coach, and he said, no, it's not about 721 00:36:33,120 --> 00:36:36,520 Speaker 1: raining in, and and he's got a point because it's like, look, 722 00:36:36,640 --> 00:36:38,080 Speaker 1: it's like you've got a lot of people making a 723 00:36:38,160 --> 00:36:40,680 Speaker 1: lot of money out there, So why do I need 724 00:36:40,760 --> 00:36:42,880 Speaker 1: to rein you in and when it's to your benefit 725 00:36:43,280 --> 00:36:46,080 Speaker 1: to perform very well on the field in the first place. 726 00:36:46,760 --> 00:36:48,680 Speaker 1: That's true, But these are still kids when it comes 727 00:36:48,719 --> 00:36:51,160 Speaker 1: down to it. I mean when you're in college. When 728 00:36:51,200 --> 00:36:55,200 Speaker 1: you're in college or a student athlete, oftentimes you're in 729 00:36:55,280 --> 00:36:58,319 Speaker 1: your early twenties. Um, some people take a gap year 730 00:36:58,520 --> 00:37:01,200 Speaker 1: before they go to school and everything. But UM, they've 731 00:37:01,200 --> 00:37:03,680 Speaker 1: got a lot to learn. And I understood your your 732 00:37:03,800 --> 00:37:05,799 Speaker 1: question about raining them in because I think about how 733 00:37:06,160 --> 00:37:10,719 Speaker 1: there are some college coaches that go to, uh, the 734 00:37:11,280 --> 00:37:14,400 Speaker 1: big leagues, and I'm thinking of, um, for instance, in 735 00:37:14,520 --> 00:37:18,080 Speaker 1: York Rangers coach who went from BU coaching BU to 736 00:37:18,200 --> 00:37:21,319 Speaker 1: coaching the Rangers, and there there's a mind shift there 737 00:37:21,360 --> 00:37:23,840 Speaker 1: in terms of like how you can motivate your players. 738 00:37:24,480 --> 00:37:26,280 Speaker 1: You can't treat them the way you did in college, 739 00:37:26,360 --> 00:37:28,960 Speaker 1: which was to run them through their drills to it 740 00:37:29,080 --> 00:37:32,239 Speaker 1: was an extension of youth hockey. Essentially, Um, you've got 741 00:37:32,320 --> 00:37:34,799 Speaker 1: to treat them like professionals, like grown ups. And that's 742 00:37:34,840 --> 00:37:37,800 Speaker 1: a hard transition for a coach to make. UM. So 743 00:37:37,960 --> 00:37:40,279 Speaker 1: now you're you're talking about the reverse, right, You're You're 744 00:37:40,520 --> 00:37:42,680 Speaker 1: you have a bunch of student athletes that see themselves 745 00:37:42,719 --> 00:37:47,600 Speaker 1: as professionals. Um. That's it's gonna make for an interesting 746 00:37:47,640 --> 00:37:50,239 Speaker 1: couple of years of transition. It's gonna take a while 747 00:37:50,280 --> 00:37:52,480 Speaker 1: to reach that equilibrium. As a professor like to say, 748 00:37:54,040 --> 00:37:56,960 Speaker 1: I think financial literacy is really coming down the track 749 00:37:57,000 --> 00:37:59,760 Speaker 1: a hundred miles an hour, especially with this name image 750 00:37:59,800 --> 00:38:02,520 Speaker 1: and weakness. So let's just say you have a very 751 00:38:02,640 --> 00:38:07,200 Speaker 1: small n I L deal with um, some social media company, 752 00:38:07,239 --> 00:38:10,440 Speaker 1: and they give you a thousand bucks a month. They 753 00:38:10,480 --> 00:38:12,960 Speaker 1: don't take any taxes out, so you get twelve thous 754 00:38:13,200 --> 00:38:15,640 Speaker 1: All of a sudden, come next April, whoa you? Oh 755 00:38:16,560 --> 00:38:19,640 Speaker 1: four thousand dollars? Yeah, and you have an accounted for that. No, no, 756 00:38:19,800 --> 00:38:22,160 Speaker 1: you've spent it. It's gone. And you know it's you're 757 00:38:22,160 --> 00:38:26,280 Speaker 1: either you're either sitting in it or you're you're swimming 758 00:38:26,320 --> 00:38:29,200 Speaker 1: in it. At some point, you know how much I 759 00:38:29,239 --> 00:38:33,080 Speaker 1: gotta work to spend four hundred thousand dollars in my house. 760 00:38:33,160 --> 00:38:36,640 Speaker 1: So we're we're the white Castle household. Man. We were 761 00:38:36,760 --> 00:38:41,239 Speaker 1: sliders for days. Man, that's that's the big meal for us. Uh, 762 00:38:41,440 --> 00:38:49,840 Speaker 1: speaking of financial aptitude. Oh no, but it's time for picks. 763 00:38:49,880 --> 00:38:53,000 Speaker 1: I'm kids feels better to be number one than number five. 764 00:38:53,040 --> 00:38:54,640 Speaker 1: I'll wear a number because of mine. We have a 765 00:38:54,719 --> 00:38:56,520 Speaker 1: chance to go for three and a row. Good numbers 766 00:38:56,520 --> 00:38:58,640 Speaker 1: and a good time. When I first started wearing that number, 767 00:38:58,719 --> 00:39:01,680 Speaker 1: how would just have been proud Bloomberg Business of Sports, 768 00:39:01,960 --> 00:39:06,560 Speaker 1: the number of the week. Yes, it's time for the 769 00:39:06,680 --> 00:39:08,879 Speaker 1: number of the week. He's been looking for a number 770 00:39:08,880 --> 00:39:12,000 Speaker 1: all week long. Now, this this is an interesting one. Um, 771 00:39:12,480 --> 00:39:18,799 Speaker 1: and of course this is uh NFL Draft weekend. UH Cleveland. 772 00:39:20,440 --> 00:39:27,640 Speaker 1: They held the draft and last year and it generated 773 00:39:27,880 --> 00:39:31,399 Speaker 1: for the economic impact for the region roughly forty two 774 00:39:31,480 --> 00:39:35,920 Speaker 1: million dollars according to the Cleveland Sports Commission. What I 775 00:39:36,000 --> 00:39:40,280 Speaker 1: want to know is in twenty nineteen when the NFL 776 00:39:40,400 --> 00:39:44,480 Speaker 1: Draft was held in Nashville, how much did that generate? 777 00:39:47,400 --> 00:39:51,799 Speaker 1: Forty million in Cleveland was when that was last year 778 00:39:54,840 --> 00:39:57,880 Speaker 1: during pandemic time. What I want to know is in 779 00:39:58,000 --> 00:40:01,759 Speaker 1: twenty nineteen when it was in Nashville, how much did 780 00:40:01,840 --> 00:40:10,960 Speaker 1: it generate. I'm gonna say fifty million. That'll be on 781 00:40:11,040 --> 00:40:15,840 Speaker 1: the nose. It's a big attraction. Um, A lot of 782 00:40:15,920 --> 00:40:18,200 Speaker 1: people like to go there. I'm gonna go really north 783 00:40:18,280 --> 00:40:25,600 Speaker 1: of that. I'm gonna go like uh oh, hundred eighty millions. Wow, Lynch, 784 00:40:26,160 --> 00:40:29,880 Speaker 1: you're under They generated two hundred more than two hundred 785 00:40:30,000 --> 00:40:34,919 Speaker 1: million dollars in nineteen just for the economy there because 786 00:40:35,320 --> 00:40:37,840 Speaker 1: and and because you got all the stuff, you got 787 00:40:37,960 --> 00:40:41,840 Speaker 1: all you know, music City, music City and all the 788 00:40:41,880 --> 00:40:46,399 Speaker 1: other stuff, two hundred million dollars. That's why I can't 789 00:40:46,480 --> 00:40:53,239 Speaker 1: wait when Detroit gets it in. I'm already checked it out. Man. 790 00:40:53,360 --> 00:40:55,760 Speaker 1: It's like, and I want to go as a vacation. 791 00:40:56,040 --> 00:40:57,960 Speaker 1: But see, here's the problem. If I say I'm going 792 00:40:58,040 --> 00:41:00,880 Speaker 1: to go see the draft, I'm gonna say, could you 793 00:41:00,960 --> 00:41:03,960 Speaker 1: please grab an interviewer? Why don't you report from there? 794 00:41:04,080 --> 00:41:07,120 Speaker 1: And like, let's set you up and I'll see. But 795 00:41:07,320 --> 00:41:09,880 Speaker 1: I know me I would be in there, and it's like, 796 00:41:10,160 --> 00:41:13,960 Speaker 1: and first for the lions, Oh no, what are you doing? 797 00:41:14,200 --> 00:41:17,600 Speaker 1: I'm sorry, we I mean the bias all over the place. Oh, 798 00:41:17,719 --> 00:41:20,080 Speaker 1: they'll be a lot of rooting in the in the 799 00:41:20,200 --> 00:41:23,359 Speaker 1: movie from me. But but that is amazing. I mean, 800 00:41:23,360 --> 00:41:25,759 Speaker 1: it's two hundred million dollars and that generates a lot. 801 00:41:25,880 --> 00:41:29,880 Speaker 1: So and folks, um, that's why they're rotating these things around, 802 00:41:30,040 --> 00:41:32,000 Speaker 1: you know, and which I think is a good idea. 803 00:41:32,239 --> 00:41:35,440 Speaker 1: So why is Cleveland so low that well, I think 804 00:41:35,520 --> 00:41:37,480 Speaker 1: you hit you said it before because it wasn't during 805 00:41:37,520 --> 00:41:41,680 Speaker 1: the pandemic and they're just coming off the heels of that, 806 00:41:41,800 --> 00:41:43,480 Speaker 1: and people were like, do I want to go out 807 00:41:43,520 --> 00:41:45,919 Speaker 1: in this thing? It's like when you know what's happening here. 808 00:41:46,080 --> 00:41:48,120 Speaker 1: So and I think that's part of it, which I 809 00:41:48,160 --> 00:41:50,400 Speaker 1: always felt bad for Cleveland, but yeah, and they had 810 00:41:50,520 --> 00:41:53,320 Speaker 1: they had a lot of social distancing rules there and 811 00:41:54,520 --> 00:41:57,160 Speaker 1: this ususally is like Times Square in New Year's Eve 812 00:41:57,600 --> 00:41:59,719 Speaker 1: of the NFL draft. People just want to get in there. 813 00:41:59,760 --> 00:42:01,480 Speaker 1: There's should at a shoulder, and last year there were 814 00:42:01,480 --> 00:42:04,799 Speaker 1: a lot of spatial restrictions. So I think that's why 815 00:42:05,160 --> 00:42:06,880 Speaker 1: that number was so low, because I think some of 816 00:42:06,960 --> 00:42:09,360 Speaker 1: the other ones, Michael Barr, I'm sure your research they 817 00:42:09,400 --> 00:42:12,200 Speaker 1: were all well above that. Oh yeah, oh yeah, that's 818 00:42:12,200 --> 00:42:14,719 Speaker 1: why I didn't want to save it was higher or lower. Yeah, 819 00:42:15,040 --> 00:42:18,920 Speaker 1: he kept a very good poker face. I remember when 820 00:42:19,280 --> 00:42:22,160 Speaker 1: my husband's friends came to town for the NFL draft 821 00:42:23,000 --> 00:42:24,800 Speaker 1: many many many moons ago. I didn't even know that 822 00:42:24,880 --> 00:42:27,560 Speaker 1: that was a big deal that people come to town. Yeah, 823 00:42:27,800 --> 00:42:29,640 Speaker 1: Radio City was there all the time. It's a whole 824 00:42:29,680 --> 00:42:33,680 Speaker 1: weekend extravaganza, a week long extravaganza. Right, good weekend for 825 00:42:33,719 --> 00:42:37,160 Speaker 1: you to leave the house, Scarlett. Not a crowd. You 826 00:42:37,200 --> 00:42:41,680 Speaker 1: want to be hanging by the way before Lynch says 827 00:42:41,800 --> 00:42:45,279 Speaker 1: something is like, yes you want again, Lynchy, and you 828 00:42:45,560 --> 00:42:48,040 Speaker 1: you were under so you actually do come on stage 829 00:42:48,160 --> 00:42:50,440 Speaker 1: man for the show. This is a legitimate win. This 830 00:42:50,600 --> 00:42:52,800 Speaker 1: is a legitimate win. So you know it was a 831 00:42:52,840 --> 00:42:55,560 Speaker 1: good job, Lynch. Take the fridge, the range, and listen 832 00:42:55,680 --> 00:42:59,400 Speaker 1: the oven. This has been the Bloomberg Business of Sports show. 833 00:43:00,000 --> 00:43:01,880 Speaker 1: I'm Michael Barr. You can follow me on Twitter at 834 00:43:01,920 --> 00:43:04,399 Speaker 1: Big Bar Sports. I'm Scarlett Food at Scarlet Food on Twitter. 835 00:43:04,560 --> 00:43:07,600 Speaker 1: We could have talked to the professor forever. I'm Mike Lynch. 836 00:43:07,680 --> 00:43:10,080 Speaker 1: Follow me at Lynch e w CDV. This has been 837 00:43:10,120 --> 00:43:13,080 Speaker 1: the Bloomberg Business of Sports. By the way, you can 838 00:43:13,200 --> 00:43:16,319 Speaker 1: hear us right here on Bloomberg Radio or download show 839 00:43:16,320 --> 00:43:17,440 Speaker 1: wherever you get in the podcast