Photo by Cathal Malin
For decades, athletes bringing their talents to Division 1 collegiate sports could expect roughly the same thing: putting in long hours for the reward of free schooling and maybe some extra privileges on campus, but dealing with strict rules regarding their eligibility and ability to profit off their labor. The premier governing body of collegiate sports, the National Collegiate Athletic Association (NCAA), has long taken regulating collegiate sports incredibly seriously, laying out strict rules for who can and can’t play, how colleges can compensate their athletes, and how different sports are structured in general. However, nowadays some of the long tenured core pillars of NCAA athletics are seeing a massive upheaval.
Amateurism
The NCAA has long embraced the idea of the STUDENT athlete. A collegiate athlete is a professional student first and amateur athlete second. Accordingly, their compensation is geared towards their status as students. Athletes would receive scholarships, free housing, meals, etc. What they would NOT receive is monetary compensation for their work as athletes, because of that “amateur” status. An amateur is someone who participates in a sport for fun, as opposed to a professional, who does it for pay. Under this philosophy, denoted as “Amateurism,” the NCAA and its member schools have long gotten away with denying student athletes the ability to make money off their labors, despite schools making hundreds of millions from TV deals, ticket sales, and other revenue streams related to the sports these athletes played. And though for a long time student athletes have seen little success in the courtroom, recently this all changed. Over the last five years however, this has changed, as athletes have begun seeing a lot more success in getting compensation for their labor. The recent House v NCAA settlement specifically opens the floodgates for student athletes to shift from being unpaid amateurs to paid professionals.
NIL and House v NCAA
As long as college athletes have been amateurs, they have been prohibited from profiting off of their labor in any way, which includes through endorsement deals. However, beginning in 2021, the NCAA started to allow athletes to benefit from the usage of their name, image, and likeness (NIL). For the first time, athletes could receive cold, hard cash, for the usage of their personal brand in endorsement deals. Though at the time this was said to be still avoiding a pay-for-play system and preventing “improper recruiting inducements”(meaning paying athletes for their college choice), this policy has continued to evolve and move college athletics towards a more professional system, especially with the House v NCAA settlement.
A landmark decision, the recent House v NCAA settlement completely rewires the business aspect of collegiate athletics. Essentially, beginning this year, Division 1 programs that opt in can share 22% of athletics revenue (capped at around $20.5 million) with athletes, with the cap being recalculated each year. This pool is in addition to existing scholarships and benefits. Though it is being framed as NIL compensation instead of as salary, this money does essentially amount to a budget that teams now have to pay for better players with. The settlement also commits the NCAA for a multi-billion dollar back payment scheme for the 2016-present timeframe, adding long term liabilities to athletic budgets. Though this system does not explicitly make student athletes salaried employees, this new landscape looks far closer to a pro-sports revenue sharing model than the old amateurism model that was a mainstay of NCAA athletics for generations.
Braham v NCAA
Not only was the process of athletes profiting off their play essentially prohibited by the NCAA for years, but as was their ability to even be eligible to play their sports and receive scholarship dollars for their activities on the field. However, another recent decision, Braham v NCAA, further challenges the NCAA’s dominance over regulating the college athletics landscape. Though the NCAA long used defenses citing concerns about competitive balance or amateurism to maintain its strict regulations over who could play in collegiate sports, Braham v NCAA found that in today’s evolving collegiate sports landscape reasoning like those are no longer acceptable justification for the NCAA’s long standing statutes. Though the details of the case are rather mundane, the result was extraordinary. The courts found that multiple types of eligibility restrictions by the NCAA were illegal under the Sherman Antitrust act, and that the NCAA had for years been denying people the opportunity to profit off of their labors in an anticompetitive way. The ruling has significant implications as it frames eligibility restrictions as restraints on economic opportunity, essentially making the focus of being a student athlete shift legally towards the athlete part of the term, and makes this student athlete status much closer to that of a job than of being a student with extra benefits.
Pushback and future directions
Though NCAA athletics has moved towards a more professional system in recent years, there certainly has been pushback, even from the current presidential administration. The “Saving College Sports” executive order tries to answer worries regarding a potential shift of money and influence further towards the more profitable sports and away from other programs by banning pay-for-play deals and attempting to prop up existing NCAA prohibitions. However, critics of this order note that it may not meaningfully change the incentives that sparked the NIL arms race in the first place, and could cause legal resistance from athletic programs. Looking forward, it appears that more federal involvement in collegiate sports is possible, as the industry continues to plow ahead towards looking like a lower level of professional sports. The order directs federal bodies to clarify that athletes as of now are not employees and takes steps to temporarily stabilize rules. However, the true effects of these recent changes and this order are likely to take effect unevenly, with larger, richer programs (such as Vanderbilt’s) likely to adapt faster whereas smaller schools may struggle to compete and deal with new regulations.
