A University of Texas running back is driving around Austin in a Lamborghini. A Kansas State hoops star transferred to the University of Miami for $800,000—and a car. And the current recipient of the Biletnikoff Award—the top college wide receiver in the nation—left the University of Pittsburgh and is shopping around for the best deal, with offers being dangled by UT, the University of Southern California and Alabama.
No one is arguing that student athletes, who bring incredible value to their universities, shouldn’t be compensated for the use of their name, image and likeness (NIL). But what we’re seeing now, with college athletes receiving millions of dollars from wealthy boosters, is the Wild West, and it’s time to tame it.
The NCAA long profited off its polite fiction of “student athlete.” Its initial bylaws drafted when it formed in 1906 (after President Teddy Roosevelt’s son was injured in a football game), stipulated that “[n]o student shall represent a College or University in any intercollegiate game or contest who is paid or receives, directly or indirectly, any money, or financial concession.” Similar rules are still on the books.
If such a consortium were formed today with an agreement to ban student compensation, surely it would run afoul of antitrust laws. Indeed, a number of the lawsuits that landed before the U.S. Supreme Court as NCAA v. Alston last year based their claims on antitrust law, and SCOTUS agreed—unanimously.
As Justice Brett Kavanaugh wrote, “Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate … And under ordinary principles of antitrust law, it is not evident why college sports should be any different.”
Accordingly, the NCAA has now issued guidelines that allow players to cash in on NIL deals. And boy, are they cashing in. University of Kentucky basketball star Oscar Tshiebwe could earn $2 million—before he ever goes pro. That’s just one example.
“I’m all for players making money off their name, image and likeness,” Ohio State football coach Ryan Day told CBS News. “But right now, it’s created a lot of unrest because we all feel like there’s no rules—or the rules that are there are not being enforced. It creates a lot of jealousy. If you do nothing, you’re going to fall behind. If you go extreme, you may put yourself out there to be vulnerable to sanctions down the road.”
Even before the NCAA could formulate its guidelines for NIL agreements, California enacted its Fair Pay to Play Act, which forbade colleges to punish student athletes who enter into NIL contracts. The California bill proved to be a catalyst; as of the beginning of March 2022, 28 states had enacted NIL-related measures (including legislation and regulatory solutions), and measures are proposed or pending in 11 more states.
The divergent state-law approaches give advantages to some universities over others, and there are already signs of a race among states to create favorable environments for their in-state schools to compete with out-of-state institutions. That’s why uniform state action—while preferable to what we’re seeing now—is unlikely.
The NCAA has asked Congress to step in with uniform regulations at the national level, but so far, none of the dozen or so bills introduced has gained any traction.
The NCAA’s own interim policy, which went into effect on July 1, 2021, did not permit universities to use NIL opportunities as a recruiting tool, but it does allow them to arrange NIL opportunities for their student-athletes if permitted by other applicable law.
Now the NCAA has released its formal guideline. As ESPN reports, “NCAA rules prohibit athletes from taking money as a recruiting inducement or as a reward for their athletic performance. However, the broadly written rules have made it difficult for the NCAA to separate deals made by private businesses for an athlete’s services off the field from deals made with the intent of securing an athlete’s services on the field.”
There’s one more consideration: Title IX, federal legislation designed to provide college women athletes with equal opportunity. Recent NIL developments raise Title IX questions because the lion’s share of NIL funds are expected to flow to men.
However the guiderails are crafted, they must not violate antitrust laws, and they must consider and be guided by the spirit of Title IX.