Pay-for-Play in college sports is now on the table
What was unthinkable just a few years ago is now a possible and reasonable outcome in collegiate sport. However, Olympic sports are on shakier ground than ever before.
This is not a fun time to be a college sport administrator. In fact, it's probably a little bit scary. On the outside, college sport looks the same as it always has, but on the inside, changes over the last two years have exposed the NCAA's crumbling amateurism framework and shaken its administrative underpinnings.
In 2021 several states unilaterally legislated an end to the NCAA's restrictions on athletes being able to use their personal brand to make money. Up until then athletes were prevented from profiting from their athletic ability by the NCAA's anachronistic notion of amateurism. Previously, only the NCAA and its member schools were allowed to sign licensing deals using their athlete's names, images, and likenesses (NIL); the athletes themselves saw none of the money from such deals.
The state legislation was a direct challenge to amateurism, a tool the NCAA claims it needs to maintain parity among its member schools. Suspension of schools that violated the amateurism rules was not really a practical solution — schools across entire states would have been affected — so the NCAA dropped the restrictions on all member schools nationwide and allowed athletes to cash in, if possible, on their name, image, and likeness. I wrote at the time:
On 30 June, the day before the first batch of these laws was to take effect, the NCAA Board of Directors temporarily suspended its NIL restrictions for all athletes, not just those in states with imminent or pending laws. This will maintain a pro-competitive environment between states with and without such laws while giving the U.S. Congress time to craft universal legislation that could replace the current patchwork of state regulations. The temporary suspension may also suppress a perceived need to do so in states that haven't already written their own NIL legislation, thus avoiding even more headaches for the NCAA board if these later-acting states were to introduce other pro-athlete provisions outside of NIL.
Lifting the restrictions was supposed to be temporary in anticipation of congressional action that might reinvigorate the antitrust leniency the NCAA enjoys. But in September 2021 the general counsel of the National Labor Relations Board (NLRB) signaled that pay-for-play is not as far fetched as some may think:
Players at Academic Institutions perform services for institutions in return for compensation and subject to their control. Thus, the broad language of Section 2(3) of the Act, the policies underlying the NLRA, Board law, and the common law fully support the conclusion that certain Players at Academic Institutions are statutory employees, who have the right to act collectively to improve their terms and conditions of employment,” said General Counsel Abruzzo. “My intent in issuing this memo is to help educate the public, especially Players at Academic Institutions, colleges and universities, athletic conferences, and the NCAA, about the legal position that I will be taking regarding employee status and misclassification in appropriate cases.
Her position, "that certain players at academic Institutions (sometimes referred to as student athletes), are employees under the National Labor Relations Act, and, as such, are afforded all statutory protections," would not stand in the way of collegiate athletes attempting to form unions. As difficult and unlikely as that is — it's hard to form a union — it's clear that the NCAA can no longer depend on it being out of the question like it was just a few years ago.
In a separate case dealing with non-cash benefits to athletes, Justice Brett Kavanaugh left no doubt that the NCAA's antitrust status was on shaky ground due to its labor-unfriendly amateurism rules. In his concurrence in National Collegiate Athletics Association vs. Alston he writes that the NCAA business model, relying as it does on non-paid labor, would "...be flatly illegal in almost any other industry in America."
There is no going back on payments to athletes. Regardless of how the NCAA frames it, or how temporary they hope these changes will be, amateurism in collegiate sports is finally finished.
Who is making NIL money and how are they doing it?
Some athletes are doing surprisingly well with NIL. According to Rookieroad.com, of the top 10 earners seven are football players, two are gymnasts, and one is a basketballer.
Bryce Young ($3.4 million annually) -- junior quarterback at the University of Alabama.
C.J. Stroud (2.7 million) -- sophomore quarterback at Ohio State University.
Olivia Dunne (2.5 million) -- junior gymnast at Louisiana State University.
Caleb Williams (2.4 million) -- sophomore quarterback at the University of Southern California.
Bijan Robinson (1.7 million) -- junior running back at The University of Texas.
Hansel Emmanuel (1.5 million) -- freshman basketball player at Northwestern State University.
Sunisa Lee (1.5 million) -- sophomore gymnast at Auburn University.
Marvin Harrison Jr. (1.4 million) -- sophomore wide receiver at Ohio State University.
Will Anderson (1.4 million) -- junior linebacker at the University of Alabama.
Shedeur Sanders (1.4 million) -- sophomore quarterback at Jackson State University.
Not all athletes are pulling in this kind of money though. Most NIL deals are much tamer with sponsored athletes receiving comped clothing, miscellaneous sports equipment, or meals at local restaurants in return for their endorsements, social media postings, or personal appearances. According to Swimswam.com, across all sports, the average Division I athlete makes less than $600 annually, DII athletes pull in $57 average, and DIII is just $35 annually.
But the industry is new and with the establishment of NIL 'collectives' at many schools, boosters and community members are able to pool their incentives to make it easier to pay athletes and to pay them more. In fact this has led to one of the thorniest problems with NIL so far, offering NIL deals as recruiting incentives.
The NCAA has established NIL guidelines acknowledging that athletes have to engage in NIL activities consistent with state laws, that sport agents and other professional service providers can be used, and that athletes should report their NIL activities to their school and state authorities as required. But the big one, and the one that is causing the most trouble is using NIL deals as recruiting incentives.
According to The Athletic:
An overwhelming majority of athletic directors surveyed by a trade group expressed concern that college sports collectives are using name, image and likeness (NIL) payments as improper recruiting inducements, both for high school prospects and transferring players. (emphasis added)
Offering recruits or transfer athletes NIL incentives to attend a school is against NCAA regulations, just as offering non-NIL incentives always has been. But the problem now is that the NCAA is reluctant to enforce this particular rule because the ground under NIL and athlete payments is shifting so much that any enforcement action or creating new rules to fill holes in regulatory policy may crumble with the next legal decision.
Can Congress help?
The NCAA is hoping that the U.S. Congress will step in with legislation to regulate these issues for them. It knows that any unilateral attempt to replace the current NIL free-for-all with new regulations or even to enforce their own current guidelines would border on madness. Justice Kavanaugh made it clear that the NCAA is living in an antitrust fantasy land, so they have wisely chosen not to poke the bear.
Congress may be the only body that could make a difference at this point. Unfortunately it does not seem interested in the NCAA's troubles or college sport, for that matter. Additionally, any action by Congress would take time.
But if Congress did jump into the fray, what are its real options? Previously, the NCAA enjoyed a lenient antitrust interpretation regarding its amateurism rules. However, the Kavanaugh concurrence made it clear that this is not likely to continue should new cases come before the Court (in other words, the NCAA has been given time to fix it). Would Congress extend or strengthen an antitrust exemption for collegiate athletics? Recall that the end result of amateurism allows schools and the NCAA to reap the financial benefits from an unpaid labor force. This is unlikely.
At the other end of the spectrum, Congress could do what the courts and the NLRB are already rumbling about: Open the system, declare that the players are employees, and let the colleges sort it out. This pay-for-play scenario is much more doable than a lot of people think, and while it would change the landscape of college sports considerably, there is lots of money in some college sports and money can pave the way to unusual outcomes.
What does the future hold?
Attempts to refine the NIL system will trigger reforms leading to some kind of pay-for-play scheme. This will have detrimental effects on Olympic sports, the ones most vulnerable to calamity within the NCAA. While football and basketball programs at some schools make more money than it costs the school to operate them, most collegiate sport programs are money losers. This includes almost all Olympic sports. Many schools have mission statements for their athletic programs stressing the importance of all athletes and all sports but some of those sports are there simply to qualify the school for their NCAA divisional membership. If this changes, and let's face it, anything could be on the table, then some of those sports would simply disappear.
Collegiate sport is an important piece of the United States sport development system. Some sports, like swimming and athletics, depend on this context to develop national level athletes. Changes such as fewer college programs, or maybe no programs at all, would have negative effects both up and downstream in the development scheme.
The changes brewing within collegiate sport are mostly administrative and may not be obvious to the casual observer. You may not even know, for example, that Bryce Young is the highest paid college athlete unless the announcers of the game tell you. It doesn't change what we see on the field, so for now it's an invisible part of the college game.
NIL is good for the athletes: Why shouldn't athletes be able to profit from their abilities or persona? But the NCAA has to figure out how to make the system fair to member schools, operate a multi-million dollar business, and, most importantly, make that business within academic institutions make sense to the public. We will witness this high wire act in the years to come.