The core of the NIL problem is often referred to as fairness. The argument for student athletes receiving Name, Image and Likeness (NIL) compensation is that it is only fair that the athletes get paid, considering how much revenue they bring to the institution. But as simple as the idea of paying student athletes to use their name, picture, and likeness, the subject is more complex than it first appears.
The transitional arrangement, which went into effect July 1, allowing student athletes from all three divisions to monetize their NIL, is the catalyst for rules and decisions that will irrevocably change the landscape of college athletics for the next decade. The question is whether this change will work for the better and whether the potential benefits are fair.
What is NIL?
One of the biggest differences between college and professional sports is the issue of compensation. While NIL does not allow student athletes to receive pay-for-play, there have been significant changes in the past few months in the type of compensation that college-level athletes can receive.
The National Collegiate Athletic Association (NCAA) is the leading governing body for college athletics in the United States, and its top priority – at least in terms of athlete compensation – is to maintain a clear product differentiation between college and professional sports. In fact, the NCAA has used product differentiation as a justification to ban certain types of compensation for undergraduate athletes – including a subset of educational benefits such as tutors, postgraduate scholarships, and instruments. The argument is that if players were to receive compensation, it would be too difficult to distinguish between college and professional sports and it would hurt viewers.
The question of product differentiation was at the heart of the problem in the NCAA vs. Alton case. The June 30 ruling of the Supreme Court found that the prohibition of compensation – particularly the denial of certain education-related services – violated antitrust law, although the justification of product differentiation for other forms of compensation is still sufficient.
Amid this paradigm shift in terms of compensation for college athletes, one would expect the NCAA to put very strict rules in place on NIL to maintain product differentiation, but they didn’t. Instead, the NCAA announced a transition policy that went into effect July 1 and allows student athletes from all three divisions to monetize their NIL.
The preliminary guideline was in response to new NIL laws that were passed individually at the state level and were due to come into effect on July 1 – such as California’s Fair Pay to Play Act. The NCAA directed schools and conferences to obey their state laws regarding NIL or to make their own rules.
This hands-off approach by the NCAA means that there is no single rule and therefore no enforcement or consequences in the event of rule violations. For example, NIL shouldn’t be used as a recruiting tool or pay-for-play, but Brigham Young University (BYU) is using a NIL deal with Built Brands to use their football team’s “scholarship equivalents” as a way to raise their 85-man Bypassing the grant limit.
The snowball effect
NIL is the new wild west and the snowball effects from the NIL ruling and the NCAA vs. Alston ruling will forever change the landscape of college sport.
Sports students are already applying for employment rights. This is of course nothing new –
the NCAA even coined the term “student-athlete” in the 1950s to argue that injured football players could not receive workers’ compensation – but in light of the NIL and the Alston ruling, it seems more plausible that college athletes should be given labor rights.
If states with the right to work choose to give college athletes employment rights, this would give schools in certain states an advantage in recruiting. Not to mention, the sports departments could not survive as giving athletes employment rights would mean a loss of 35% of their revenue.
It’s just Darwinism. Unlike professional leagues like the NFL, which operate on the principle of only being as strong as their weakest team, college sport is everyone on their own. Universities may have to make tough decisions and cutbacks at some point in order to maintain their sports departments.
When it comes down to it, it will be women’s sports and “unsexy” sports – like golf or cross country – that bring in less revenue, while the big money-makers like soccer and men’s basketball take precedence.
It may seem that this prediction is too apocalyptic, but NIL doesn’t exist in a vacuum. Legislation on compensation for student athletes over the next few years will affect college sports departments that have never paid compensation before; and NIL could potentially be the first step in the transition of college sports to a semi-professional model.
I want to make it clear, I am not trying to argue whether or not student athletes should receive compensation, or whether or not these changes would be good or bad. In all honesty, I think athletes who can monetize their NIL at the college level are a wonderful opportunity for them to make money and even pay for their college education. However, there is concern that if college athletics shifts to a semi-professional model, the priorities of the sports departments will change and potentially harm athletes.
After all, what is the purpose of college athletics? Is it a vehicle for athletes to get higher education? Is it a professional sport recruiting pool? Is It A Way For Universities To Make Money?
In a semi-professional model, athletes are employees, not students, and therefore the priority is on generating income, not on athletics. We are already seeing the shift towards changing priorities in the wake of the NIL ruling.
In order to even receive NIL offers, athletes have to spend time cultivating their image and their presence on social media. Being good at your sport is all well and good, but sponsors want more than just that you have notoriety and popularity. When you see a fast food commercial starring Chuck Foreman, instead of thinking about the product being advertised, you might think, “Who was that random guy?”
The need to maintain your image could hurt academic performance by forcing students to prioritize their social media awareness over their education.
This is especially a problem for black and disadvantaged athletes. While NIL deals could potentially be very lucrative for blacks and underprivileged student-athletes, there is a historical precedent where these athletes get less out of their education. There are racial inequalities in graduation rates at six years and the benefits and engagement outside of athletics, as well as an inequality in life outcomes after graduation for DI athletes who did not turn pro.
One of the reasons for this inequality is that coaches who set the standard of education for their athletes prioritize athletics over academics and discourage them from participating in non-sport activities. Appreciating athletic achievement through education can damage a student’s education and hinder their study path – especially if the student is already starting out at a disadvantage.
NIL adds a whole new dimension to pre-existing inequality by introducing something different that gives athletes priority over their education.
The issue of priority is not limited to affecting academic performance. There is a historical precedent for men’s sports being given priority over women’s sports in the NCAA, and as a result, it is possible that female student athletes may receive fewer NIL offers than their male counterparts.
Of course, it is expected that athletes from more popular sports will benefit more from NIL than athletes from sports with fewer spectators. After all, soccer and men’s basketball are the big money makers for the NCAA, so it’s only natural that they should be a priority. However, it is important to recognize that one of the reasons these sports are so strong is that the NCAA structure prioritizes men’s sports over women’s sports.
According to the NCAA 2021 Gender Equity Review conducted by external parties, the structure and culture of the NCAA prioritizes men’s sports over women’s sports. The place where we can see this most clearly is in basketball, especially in relation to the NCAA media agreements. CBS owns the broadcast rights to the NCAA Men’s Basketball as well as the NCAA’s Corporate Sponsorship Program for all 90 NCAA championships – which means potential sponsors or advertisers must go through CBS. Easy and uncomplicated.
However, CBS does not own the broadcast rights to the NCAA women’s basketball tournaments – ESPN does. And this is where it gets complicated. If a company wanted to air an ad for Division I Women’s Basketball during the March madness, it would have to buy into the NCAA’s corporate sponsorship program. That said, they’d have to pay CBS for the rights to all 90 championships and then buy airtime from ESPN. As a result, companies are less willing to partner and sponsor the women’s basketball tournament, which in turn means women’s basketball has fewer resources than its male counterparts, even though its popularity and audience numbers continue to grow.
The structure of the NCAA makes it more difficult for women’s sport to generate the same income as men’s sport. And as universities offering NIL offerings to their athletes will prioritize their most lucrative sports, female athletes will always lose out.
And while female athletes could get compensation for their NIL regardless of school if the NCAA doesn’t prioritize female athletes, why should potential sponsors? If university sport shifts to a semi-professional model, in which profit is paramount, will women’s sport be worthwhile?
It is still unclear what the future of college athletics will be in terms of player compensation. The NCAA’s current transition policy is by definition only a temporary measure and eventually rules and laws need to be put in place and enforced. The question now is what is the priority? Is the priority student-athlete or profit?
If we’re not careful, we can end up with a system that harms student-athletes and benefits only a few. It is therefore important that a diverse, intersectional group of people sit at the table where these decisions are made. The issue of compensation will dominate the college sports landscape for at least the next decade, and so I think the priority should be to ensure that it is a fair change for the better.