A New Era Dawns In College Sports, As The NCAA Scrambles To Keep Up
Laws take effect this week in seven states that allow college athletes to be compensated for their name, image and likeness. It opens the door for collegians to make money off endorsement deals.
A new era in college sports begins this week.
Following Kentucky Gov. Andy Beshear's executive order allowing college athletes to be compensated for the use of their name, image and likeness — known by its abbreviation "NIL" — at least seven states will put into effect NIL laws, on Thursday. The laws allow athletes to make money for things like endorsement deals, signing autographs and social media content.
That's been prohibited under NCAA rules, but now, the organization is in the process of reforming those rules. Especially after the recent Supreme Court decision weakened the NCAA's long held, but increasingly outdated, notion of amateurism in college sports.
States take the lead
In 2019, California struck the first blow against the NCAA, in a very California way — a bill signing by Gov. Gavin Newsom on the set of Lebron James' HBO show, The Shop.
The state's Fair Pay to Play Act, the first NIL bill, reflected the growing discontent about the NCAA's shaky ideal of amateurism, with so-called amateur athletes in the major sports generating vast revenues and not sharing in them.
For the NCAA, California signaled the start of a problem. A state-by-state patchwork of NIL laws would create recruiting advantages — athletes choosing schools in states allowing NIL payments — and thus create competitive imbalance.
Although critics say that imbalance has long existed in big time college sports.
But the NCAA failed to come up with a one-size-fits all plan. A vote set for January of this year was indefinitely delayed.
Now, the NCAA finally appears ready to act, but only after the states did.
"It's the NCAA's fault for not taking action," said New Mexico State Sen. Mark Moores. The former college football player was the primary sponsor of his state's NIL law, one of those going into effect Thursday, July 1.
"States are sovereign powers," Moores said, "and when we see a situation that's unfair and needs to be addressed, we're going to use our ability to pass laws to address those issues."
A payoff for hard work
With NIL, schools don't pay athletes, third parties do. And New Mexico's law is one of the least restrictive when it comes to compensation.
"The gold standard," said longtime college athlete advocate Ramogi Huma.
Among other provisions, the statute lets athletes have their own shoe deals and allows third parties to pay for an athlete's food, shelter and medical expenses.
New Mexico State sophomore basketball player Molly Kaiser says it's amazing athletes will finally benefit from their name, and appropriate, she says, since they work hard to get their name out there.
"I'm honored to be a part of the start of that," Kaiser said. "I think it's going to be pretty cool, and now I can continue to make YouTube videos and actually profit off of it."
18-year-old Kaiser says she was raised by a single mom and can envision sending NIL money back home.
"I think it's all about trying to feed your family and making a way for them," she said, "and not necessarily about us. At least for me."
If University of Michigan basketball player Naz Hillmon decides to use the extra year of eligibility offered by the NCAA because of the pandemic, she'll be able to take advantage of Michigan's NIL law — it's slated to go into effect in December of next year.
If she does, Hillmon has ideas.
"I would love to do some [basketball] camps," she said, "whether they be in Ann Arbor or [her hometown] Cleveland. Just to be around in some way, give back to the community and kind of show my face and be appreciative of those who have helped me along the way."
Hillmon also would like the chance to openly promote friends and family members.
"Some of them have businesses," she said, "and [under current NCAA rules] I'm technically not allowed to promote them and say 'go visit them.' I have to word it in a certain way on my social media."
In Los Angeles, USC quarterback Mo Hasan is hopeful. The lawmakers behind California's Fair Pay to Play Act want to move up the law's start date from 2023 to this September. Hasan, a podcast host, would still be in school and already he's thinking in terms of NIL.
"I just got off the phone with a podcast network," Hasan said last week. "They presented the opportunity to sign with them and partner with them in order to continue growing the podcast, and, generating revenue through advertisements."
The money would "go to me," he said, adding, "it would be historic because it's never been done before on a student athlete level. So it's really exciting to be on the frontier of this."
Hasan confirms the NCAA's fear that a patchwork of state NIL laws would affect recruiting.
"I think it's a competitive advantage for sure," he said. "If, you know, the state of Florida or the state of Texas (both have laws going into effect July 1) can offer these resources that the state of California can't, that's really hard to recruit against. You know, if I'm a top quarterback and I can make over one hundred thousand dollars at the University of Florida and I can't make that at the University of Arizona, then that's an easy decision in a lot of cases."
Plenty of value in athletes
So what can athletes make in the NIL era?
A study in SSRN, the Social Science Research Network, on college athlete's NIL value, found "the NCAA'S claimed position that student-athletes lack meaningful NIL value is false."
Studying the potential for monetizing social media accounts, the easiest way to turn NIL rights into dollars, researchers estimated Trevor Lawrence's Instagram account had a value of more than $330,000. Lawrence was the star quarterback at Clemson and top pick in this year's NFL draft.
While football and men's basketball players get much of the publicity in those two major revenue-generating sports, women are not left out of the equation. And in fact, potentially they could eclipse their male counterparts in NIL earnings.
Basing, again, on social media popularity, Axios noted that 8 of the top 10 most followed athletes in the Elite 8 rounds of this year's men's and women's NCAA Division 1 basketball tournaments....were female players.
According to The Washington Post, other research found star athletes in women's sports and Olympians now competing in college, could make up to half a million dollars a year in endorsements.
That's big money of course. The majority of athletes, many in so-called non-revenue sports, doing camps and lessons, making occasional personal appearances, or working their social media, there'll be more modest sums for sure.
You get what you put in
"The reality is, [making money off NIL opportunities] is just like anything else," said Jim Cavale, CEO of the content-providing software platform INFLCR (pronounced "influencer"). "What you put in is what you get out. Any student-athlete who thinks this is just going be an automatic windfall of revenue, is insane."
"You're going to have to work at it. Some athletes will have to do less work than others, just like playing time. Some athletes are so gifted they can get on the field very easily and play and score and do well. Other athletes have to work a little harder. But everyone is going to have to put in some work."
Cavale started his company in 2017, and is now using the last four years of connections and business to give INFLCR a leg up on the dozens of companies that've sprung up to take advantage of the NIL wave. Cavale says more than 100,000 athletes nationwide have the INFLCR app, which helps them manage their name, image and likeness opportunities.
Managing that business, doing the work to create their own brands, that's a valuable lesson for any athlete, he says. From the star quarterback to the softball shortstop to the setter on the volleyball team.
"Even though they [may not make] a ton of money off NIL," Cavale said, "it's going to help them make the most of the network and surroundings they have while they're playing. So they can start to make those connections and build the foundation for the rest of their lives. A lot of athletes, unfortunately, experience the side of the ball being deflated. The game's over and nobody cares anymore. They don't care they used to play. They don't care you were this position on this team. You're now an adult trying to make it in a very tough world. [So], get a head start."
The NCAA plays catch up
The question remains, who will have the opportunities?
College athletes in at least seven states will as of July 1st. And it now appears all athletes will be included.
The NCAA's quick game of catch up has the organization finally positioned to offer NIL rights nationwide.
Meetings last week led to the draft of an interim plan that, if approved, would take effect July 1.
Under the plan, athletes in the states with laws going into effect will follow those laws; in states without laws, schools can create their own NIL policies.
There still are prohibitions included in the NCAA's plan, including NIL compensation can't be tied to an athlete's performance — not allowing, for instance, more NIL money for more points scored. The organization is trying to hold the line against pay for play, a bedrock of the amateurism model the NCAA has preached throughout its history.
But the model has been harder to defend as the money has boomed in big time college sports.
Indeed, last week the U.S. Supreme Court issued a stinging and unanimous ruling that the NCAA can't limit athletes benefits that are linked to education. It was a narrow ruling but one that eviscerated the NCAA's claim that it should be exempt from the nation's antitrust laws because the athletes are amateurs.
The decision is expected to lead to future challenges to NCAA rules. Patrick Bradford, a veteran anti-trust lawyer based in New York City, was part of a group that filed an amicus brief supporting the athletes in the Supreme Court case. Particularly the African American athletes who comprise the majority of athletes in revenue-generating football and men's basketball.
Bradford predicts the Supreme Court ruling has a lasting impact.
"I think it's just a matter of time," he said, "before the NCAA will have to divorce itself from regulating the economics of student athletes."
For now, with its temporary NIL plan, the NCAA, which did not respond to a request for comment, is stepping back by allowing schools to create their own policies. But the association also says schools and athletes should adhere to the plan's guidance "until such time that either federal legislation or NCAA rules are adopted."
The NCAA Division 1 Board of Directors reportedly will meet Wednesday to make a final decision on the interim plan. If, as expected, the board approves it, the NIL policy would go into effect the next day.
Making the NCAA a partner, albeit belated, in a new era.
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