The financial realities for college athletes will dramatically change this summer. State governments, the N.C.A.A. and Congress all have a hand in shaping what that might look like.
College athletes are on the verge of being able to make money off their fame as the rules that have governed college sports for more than a century are upended.
In at least five states, student-athletes are expected to be allowed to cut endorsement deals, monetize their social media profiles and hire agents beginning on July 1. If a powerful N.C.A.A. committee acts as planned during a meeting this month, similar rights could be in place for college athletes nationwide this summer. Congress has also been paying attention — a Senate committee held a hearing on Wednesday — and could ultimately push ahead with federal legislation.
But the debate over student-athlete compensation has lasted for years, and there is good reason to think that the weeks and months ahead will be tumultuous, even if the N.C.A.A. sets some kind of coast-to-coast policy.
What have the rules been?
If instructions for tax forms bring a glaze to your eyes, it is best to avoid the N.C.A.A.’s Division I manual, a 464-page onslaught of rules, revisions and charts. (Universities employ entire teams of compliance experts to decipher the rules.)
One of the manual’s many provisions bars players from being paid “to advertise, recommend or promote directly the sale or use of a commercial product or service of any kind.” The restrictions also have the effect of keeping students from selling their autographs and limiting how they may promote camps where they teach their craft. There is also an N.C.A.A. rule that players, with some exceptions, cannot participate in a sport if they have agreed to be represented by an agent.
Are the rules changing?
Almost certainly. The N.C.A.A. says that one of its most influential panels is “expected to act” to change them during a meeting that begins on June 22, “provided it is feasible to do so.”
The lawyerly caveats are typical of the N.C.A.A., which happens to be awaiting a Supreme Court decision in an antitrust case, and the association’s plans could change dramatically for a host of reasons. But the college sports industry is running out of time to rewrite its rules. Some states, including Alabama, Florida and Georgia, have laws poised to take effect on July 1 that are designed to guarantee student-athletes the opportunity to profit off their names, images and likenesses, regardless of what the N.C.A.A. says.
Those laws — and there are more like them in the pipeline across the country, including some that have already been signed into law but will go into effect later — have athletics officials anxious about a competitive imbalance. Unless the N.C.A.A. acts, many universities worry that schools in states with the new laws will gain an enormous advantage in recruiting: the ability to dangle the legally protected possibility to make money as a college athlete.
“It’s going to be very important to recruits what the deal is,” Mark Richt, who led the football programs at Georgia and Miami, said in May. “There may be a certain school that maybe hasn’t had the history of being able to land big recruits. If they’re in the heart of where there’s major business opportunities, all of a sudden this team might rise out of nowhere.”
Athletes will still not be paid directly by universities beyond the cost of attendance, and the N.C.A.A. has been keen to ensure that athletes not be considered employees of their colleges.
What does the N.C.A.A. want to do?
Under proposals that have been circulating among college sports leaders for months, many private companies could pay student-athletes to use their names, images and likenesses. Players could earn money through advertisements on their social media accounts, film videos for fans through services like Cameo and strike their own endorsement deals.
The proposals, though, created with the N.C.A.A. under immense pressure from state laws, would still give colleges and universities some control. Schools, for example, would have the power to block some agreements if they conflicted with “existing institutional sponsorship arrangements,” meaning that an athlete might not be able to strike an endorsement deal with Adidas if his or her college already has one with Nike.
What do the states plan to do?
Roughly speaking, they want at least everything the N.C.A.A. has outlined — and sometimes more in the years ahead. That dynamic is also a source of worry inside college sports: Executives fear the financial repercussions of more expansive state laws, but they are again nervous about the prospect of a school in one state being able to offer recruits more possibilities than one someplace else.
“It’s not healthy for college athletics to have state legislatures becoming competitive in drafting laws,” said Greg Sankey, the commissioner of the Southeastern Conference, the premier college football league. “To the extent our states are able to normalize their approach, that can facilitate healthy competition. But what becomes unhealthy is if the approach is one of, ‘Hey, we’re going to one-up each other.’”
Will Congress do something?
A federal standard is among the fondest wishes of college sports administrators like Sankey, in part because it would presumably resolve the competitive issues surrounding the disparate state rules. They also hope a federal law would offer them a greater shield from litigation.
Whether Congress will do anything, or when, is a different matter entirely. Legislators, particularly in the Senate, have long been engaged in negotiations about what a federal law might look like, but they have not yet struck a deal destined to make it through both chambers of Congress. Changing college sports may be centrally important for universities and the N.C.A.A., but it is a lower priority among federal lawmakers.
Although many college sports executives have pressed for action by July 1, it appears increasingly unlikely that officials in Washington will reach an agreement in the next few weeks.
Could the N.C.A.A. sue to stop the state laws?
Yes, and the association and its president, Mark Emmert, have refused to rule out that possibility.
The N.C.A.A. successfully batted down a state challenge to its authority in the early 1990s. That case, though, involved a single state law, and experts have cautioned that fighting the assorted statutes now would mean a multifront battle with potentially uneven results.
How much are players probably going to be making?
Some stars, particularly in football and basketball, could make millions. But many more college athletes, including plenty in those same sports, could likely generate thousands or tens of thousands of dollars in earnings. Some won’t make any money. The laws do not guarantee any deals; they just make them possible.
Jim Cavale, the chief executive of INFLCR, an Alabama firm that many schools have hired to help students understand the rules and opportunities, said he generally thinks of players in three categories. One bucket includes the mega stars of college sports who will strike the biggest deals with the biggest companies. The largest group includes talented athletes who are particularly savvy with technology and are positioned to capitalize, mainly through their online presences. The third segment includes players who will be more likely to cut a gift card deal, with, say, a local pizzeria.
How much all of them will make, though, could shift over time.
“This whole thing is going to be evolved through the data of what happens,” Cavale said.
It’s 2021. Why has this taken so long?
Take your pick of explanations. A crucial one is that, for reasons as much financial and legal as philosophical, it took a lot of college sports leaders a long time to warm up to the idea that students should be allowed to earn more than what it costs to attend school.
And although California passed a law in 2019 to allow players to profit off their fame (it has not yet taken effect) and pushed the N.C.A.A. toward changes, the N.C.A.A. is hardly designed for speedy action. The coronavirus pandemic, which sent the finances of the N.C.A.A. and college athletic departments nationwide into crisis, did not help the timetable.
The N.C.A.A. was prepared in January to vote on new rules, but the Justice Department, in the waning days of the Trump administration, raised antitrust concerns, prompting the association, at Emmert’s urging, to postpone action.
It was not until an interview with The New York Times on May 7 that Emmert publicly said the N.C.A.A. should again move ahead on approving new rules.
“We need to get a vote on these rules that are in front of the members now,” Emmert said as he urged a vote “before, or as close to, July 1.”
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Will College Athletes Make Money? Here’s Where the Debate Stands. - The New York Times
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