For decades, NCAA amateurism regulations limited student-athlete benefits to scholarships and related stipends, even as revenues soared into the billion dollar range. Currently, the Supreme Court and state name, image, likeness compensation laws are driving changes to these regulations and bringing greater equity to intercollegiate athletics in the process.
According to the NCAA, student-athletes “must not be paid.” Yet, a growing number of states are altering the NCAA’s hallowed amateurism principle through trailblazing legislation. Alabama, Florida, and Georgia, among other states, will allow student-athletes to receive compensation for the use of their names, images, and likenesses (NILs) starting as soon as July.
Amateurism Under Attack
On June 21, the Supreme Court ruled unanimously in NCAA v. Alston that restrictions on educational benefits for student-athletes violate federal antitrust law. Although NIL compensation involves an area of law distinct from that at issue in Alston, the ruling could have wide-ranging implications for the NCAA’s forthcoming overhaul of its NIL policies. Similar to state NIL laws, upcoming NCAA policy changes also will allow athletes to profit from their NILs. And while the legality of NCAA restrictions on educational benefits was the sole issue decided in Alston, Justice Brett Kavanaugh nevertheless hinted that “the NCAA’s remaining compensation rules also raise serious questions under the antitrust laws.” If the Court would have ruled more broadly, thereby invalidating all NCAA rules restricting student-athlete compensation, such a ruling would have allowed schools in every state to compete for student-athletes by offering not only educational benefits, but also NIL and countless other forms of compensation.
At present, the foundation of the NCAA’s business model rests on an amateurism principle, which limits compensation for nearly half a million student-athletes to education-related benefits. The NCAA would prefer that student-athlete participation is motivated primarily by education and other intangible, nonmonetary benefits. Yet ironically, these amateurs generate billions in revenues for the NCAA as an organization, and hundreds of millions for top Division I schools individually. The vast majority of revenues are generated by football and basketball players, who are prohibited by the NCAA from benefitting financially—even from their own NILs. In stark contrast, state NIL legislation will effectively override conflicting NCAA prohibitions by allowing student-athletes to be compensated for the use of their NILs in connection with product endorsements, sports camps, social media and marketing, and promotions in general.
The NCAA stands alone as the only billion dollar sports league whose revenue-generating players took the field without compensation during a deadly global pandemic. Some insiders believe that the cuts to non-revenue–generating teams that occurred during the pandemic will be revisited after NIL compensation is implemented. According to one athletic director, “any athletic director who says they’re not considering cutting sports is lying.”
Yet even if more teams are cut, as predicted, this would likely not be the result of student-athletes’ new NIL compensation opportunities. Rather, it would occur because the current business model of intercollegiate athletics is inequitable and financially unsustainable. The Covid-19 pandemic, in particular, has reintroduced concepts of social and economic justice and reminded us all of the exploitive nature of low and no-wage business models.
“NIL compensation is a historic achievement for intercollegiate athletics that can bring much-needed equity to men’s and women’s sports.”
NCAA coaches, administrators, and staff receive market-driven compensation for their knowledge, skills, and talents. Nick Saban, head football coach at the University of Alabama, earned $9.3 million last season, and the University of Kentucky’s head basketball coach, John Calipari, earned $8 million. Gene Smith, athletic director at Ohio State University, will earn $2 million under a recent contract extension, and outgoing PAC-12 Commissioner, Larry Scott, earns $5.4 million. The list of millionaire coaches and administrators within the NCAA is as expansive as the market will allow.
Meanwhile, the players themselves receive educational benefits with market values that vary by sport and by race. The graduation gap between black and white players can be as high as 30 percent in revenue-generating sports, where minority players are the majority. This startling statistic makes it even more difficult for unpaid student-athletes to live up to the NCAA ideal that their playing should be primarily motivated by the opportunity to receive a college education. Because less than two percent of student-athletes in revenue-generating sports will ever play at the professional level, it is critical that they receive either a meaningful degree or compensation that could facilitate a meaningful degree at a later date.
In a free market, the average football and basketball player at a Power 5 school would have had a fair market value of $208,208 and $370,085, respectively. Power 5 schools consist of those in the ACC, Big 10, Big 12, PAC-12, and SEC conferences and include schools such as Alabama, Arizona, Florida State, Penn State, and UCLA to name a few. Although median revenues at these schools can exceed $100 million annually, eighty-six percent of the student-athletes at Power 5 schools live below the poverty line. Thus, the nationwide push towards allowing student-athletes to receive NIL compensation in addition to their scholarships quite literally will lift some athletes and their families out of poverty.
The Fate of Women’s Sports
In my article “As California Goes, So Goes the Nation: A Title IX Analysis of the Fair Pay to Play Act,” I provide an in-depth explanation of how amateurism reform will impact women in intercollegiate athletics. Proponents of NIL compensation assert that it will expand economic opportunities for all student-athletes, but particularly for women. This view, however, is not universal. According to some, NIL compensation will lead to lost sponsorship revenues, as sponsors shift funding away from athletic departments to individual student-athletes. The logic continues that the loss of funding will result in athletic departments reducing the number of athletic opportunities for women to cover anticipated budget deficits. However, this scenario is unlikely to come to fruition for several reasons, with Title IX of the Education Amendments of 1972 being the most prominent.
Title IX requires equal opportunity for women in education generally and in intercollegiate athletics specifically. Further, schools must comply with Title IX even during financially challenging times. The following thirty-seven words state Title IX’s basic premise:
“No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.”
If any department of an educational institution receives federal funding, then every department of that institution must comply with Title IX. As a result, Title IX covers virtually every college and university in the United States, and by extension every athletics department.
To comply with Title IX, athletics departments must ensure that men and women receive both equal participation opportunities and equal treatment. Consequently, an overall reduction in an institution’s women’s sports due to NIL compensation (or otherwise) likely would require a corresponding reduction in men’s sports. Yet overall, NIL compensation seems more likely to result in an increase rather than a decrease athletics opportunities for women.
That is, not only might NIL compensation attract women who otherwise could not afford the opportunity cost of becoming unpaid student-athletes, but it also could attract new sponsors for both athletes and their schools. These new sponsors could come from modern sources, such as crowdfunding and social media, or from more traditional sources, such as small businesses or large corporations. For example, Fresno State twin basketball players Hanna and Haley Cavinder entertain millions of followers on TikTok and, as a result, have an estimated annual marketing value of half a million dollars. According to Blake Lawrence, CEO of sports marketing firm Opendorse, the twins’ marketing value rivals that of NFL football players.
Although some predict that NIL compensation will be directed primarily towards men’s teams, women’s teams stand to gain as well. As illustrated by the Cavinder twins, this is especially true within the realm of social media. One-third of the most-followed student-athletes on social media are women. Further, a recent study found that, on average, NIL revenue potential at the collegiate level is actually greater for women than for men.
Overall, NIL compensation is a historic achievement for intercollegiate athletics that can bring much-needed equity to men’s and women’s sports. Revenue-generating student-athletes on men’s teams soon will be able to share in some of the tremendous value that they create for their schools. Also, women are likely to find a more level playing field for NIL opportunities, thereby generating more exposure and interest in women’s sports. These are all welcome changes to a deeply entrenched system of intercollegiate athletics that blocks student-athletes from capitalizing on their athletic careers, while at the same time allowing literally everyone else to do just that.
