Amateur Sports on the Brink

It looks like the long-held dream of college athletes and the sports punditry business at large may finally become reality: college jocks may soon be paid for playing their sports.

You’ve heard the questions for years now, even decades. Is it fair for universities to rake in hundreds of millions in media rights and ticket prices and game-day concessions while the athletes who make the games happen get nothing but a scholarship? Is it possible to justify head coaches in football and men’s basketball reaping salaries upwards of $8 or $9 million a year while the players on whose efforts their success depends get squat?

Anyone with an ear to the ground of popular opinion or to the noise booming from sports talk radio already knows the answers to those questions. They are, respectively, no, and hell no.

The answer to the question of what play-for-pay will do to the edifice that is college amateurism is equally definitive. Expect the pillars in that temple to start crumbling already this summer.

Name, Image, and Likeness Legislation

Beginning next month, big-college sports stars in selected states will be able to monetize their names, images, and likenesses (NIL). Six states already have NIL laws on the books set to take effect July 1, 2021. What this means is that, starting the first day of next month, college athletes in Alabama, Florida, Georgia, Mississippi, New Mexico, and Texas will be able to monetize their names through a variety of financial avenues.

The first salvos in the NIL battles were fired about 12 years ago when two college athletes, football player Sam Keller and basketball star Ed O’Bannon, formerly of Arizona State and Nebraska, and UCLA, respectively, took issue with a game manufacturer, EA Sports, that employed their images in its college football video games. Their successful suits, regarded as pioneer efforts in the NIL rights debate, have eventuated, over a decade later, in the current environment where college athletes will be permitted to earn money from making public appearances, charging for autographs, conducting private training sessions and camps, endorsing products, and posting on social media.

One of the most lucrative areas might be social media. Analyzing the income of the top 100 pro athletes generated from endorsements, one research group found a value of about 80 cents per Instagram follower. Extrapolating that figure out for big-time college football players from the 2019–20 school year, AthleticDirectorU/Navigate estimated LSU’s Joe Burrow would bring in annual endorsement revenues of about $700,000; Tua Tagovailoa, of Alabama, would garner $440,000; and less popular jocks from $5,000 to $30,000 per annum.

Logic would suggest that the big stars, the football and basketball players, would hoover up most of the green on the basis of name recognition and the far greater popularity of the major sports. But one must also consider an equalizer: number of social media followers. Nearly half of the AthleticDirectorU/Navigate projected top 25 college social media earners are women competing in non-income-generating sports: gymnastics, volleyball, softball, women’s basketball, tennis, and track and field. A gymnast from UCLA at the time, Madison Kocian, had the endorsement potential of $466,000 per year, according to the prognostication.

And, with the next generation of athletes coming out of high school more accomplished in the techniques of influencing and more adept at self-publicity (if that is possible) that honey pot is only going to get sweeter. Indeed, two athletes, Jalen Green and Josh Christopher, boasted as high school basketball players in 2019–20 more Instagram followers than any college athlete the research group studied.

With states independently establishing their own NIL laws, the national scene could become messy, however. Schools in states with permissive NIL laws may enjoy a competitive advantage in recruiting over states with less permissive laws or states that have passed no legislation and in effect deny NIL activity.

Because Congress is unlikely to pass overarching NIL legislation prior to the July 1 start-up date, the NCAA has been forced to scramble to come up with rules that reduce the chaos, guide schools in the 44 states not activating NIL legislation on July 1, and diminish the governing body’s exposure to antitrust lawsuits. Official action from the NCAA, which had until about two years ago been adamant in opposition to athlete compensation for NIL, is likely to occur next week.

NCAA v. Alston

The play-for-pay ball was advanced Monday by the Supreme Court. In NCAA v. Alston, the Court upheld the ruling of a district court and the Ninth Circuit Court of Appeals that the NCAA, the umbrella organization that governs college sports, could not restrict educational benefits to athletes.

The unanimous ruling stipulated that the NCAA could continue to restrict benefits not concerning education, like paying athletes to play, but it could not restrain schools from offering educational perks, like laptops or graduate school internships. Doing that would violate federal antitrust laws.

Currently, the college organization enjoys exemption from antitrust laws, which, it claims, and the Supreme Court has agreed in the past, is necessary for it to function. No one disputes that the NCAA enjoys such benefits. It is clearly a monopoly — there are no competing “NCAAs” threatening to filch its players — and thus its players receive compensation seriously below market value.

The NCAA argues that without this break from the law, amateur sports would lose their distinctiveness. Justice Neil Gorsuch wrote in the majority opinion, “The NCAA’s only remaining defense was that its rules preserve amateurism, which in turn widens consumer choice by providing a unique product — amateur college sports as distinct from professional sports.”

The Court ruled that educational benefits didn’t threaten the distinction between amateur and professional sports, so they could not be restricted by the governing organization. The other piece of this, whether or not denying non-education-related benefits violated antitrust laws — that is, prohibiting college athletes from seeking market value for their services — was not up for review and was let be by the Court.

Not surprisingly, that narrow decision has not stopped Court watchers and pundits from taking this debate to its logical end point — whether or not college athletes should be paid for services. Justice Brett Kavanaugh, in a separate concurrence to the majority decision, gave pundits plenty of fodder for their speculations.

He called the Court’s decision that the NCAA violated antitrust laws “an important and overdue course correction” and opined that the NCAA’s remaining laws, which generally bar student athletes from benefiting financially from their sports, “also raise serious questions under the antitrust laws.”

He may have read the tea leaves a little too plainly for the NCAA’s liking, however, offering what is tantamount to a game plan for future litigants. “There are serious questions whether the NCAA’s remaining compensation rules can pass muster under ordinary rule of reason scrutiny,” he wrote. “Under the rule of reason, the NCAA must supply a legally valid procompetitive justification for its remaining compensation rules. As I see it, however, the NCAA may lack such a justification.”

Kavanaugh continued,

The bottom line is that the NCAA and its member colleges are suppressing the pay of student athletes who collectively generate billions of dollars in revenues for colleges every year. Those enormous sums of money flow to seemingly everyone except the student athletes. College presidents, athletic directors, coaches, conference commissioners, and NCAA executives take in six- and seven-figure salaries. Colleges build lavish new facilities. But the student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds, end up with little or nothing….

Everyone agrees that the NCAA can require student athletes to be enrolled students in good standing. But the NCAA’s business model of using unpaid student athletes to generate billions of dollars in revenue for the colleges raises serious questions under the antitrust laws. In particular, it is highly questionable whether the NCAA and its member colleges can justify not paying student athletes a fair share of the revenues on the circular theory that the defining characteristic of college sports is that the colleges do not pay student athletes. And if that asserted justification is unavailing, it is not clear how the NCAA can legally defend its remaining compensation rules.

In concluding his concurrence, the justice paid homage to the riches of college sports — to the traditional football venues in Tuscaloosa and South Bend, the basketball environment at Connecticut and Duke, the softball world series in Oklahoma City, and the baseball championship in Omaha — but then put the NCAA’s antitrust provision on notice:

Those traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated. 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. The NCAA is not above the law.

A 12-Team Playoff?

One event, still on the drawing board, that might push the play-for-pay ball into the red zone is a proposed expansion of the college football playoff.

The College Football Playoff working committee recommended earlier in June that the big-college football tournament that determines a national champion, currently limited to four teams, be expanded threefold to 12.

What’s not to like about that? More college football, indeed, meaningful college football, with good teams squaring off against good teams, to replace a December wasteland currently filled with schools with 6–6 records playing each other in the Famous Idaho Potato Bowl and the Cheez-It Bowl.

Expanded playoffs also will generate lots and lots more money for the powers that be. As it is now, big-college football brings in $4 billion a year for the 65 Power Five conference schools, with prominent programs like Texas and Tennessee, for example, generating $92 million and $70 million after expenses, respectively, from their football programs. An expanded playoff would bring in hundreds of millions more, both for the schools and the governing body.

But none of it will go to the football players, without whom, well, there’s no playoff, and no extra money. They will be asked to play 16 or 17 games, tantamount to a full NFL regular season, will get basically no time away from the game from August to now the beginning of January, and will put their health and, for some, their professional playing futures on the line for good old State U.

The earliest this expansion could happen is 2023, but more likely, because of existing TV agreements, it will occur in 2026. From now until then, expect the “unfairness” of this incongruity to be one more arrow in the quiver of the play-for-pay lobby.

Whither Amateur College Sports?

Not everyone is on board the play-for-pay train. Obviously the NCAA will push back hard — its very existence is likely on the line, after all — and, in fact, already has, against Kavanaugh’s outburst. But some sports pundits and legal insiders also see potential problems on the horizon.

The customary rebuttals to play-for-pay still resonate with many. A four-year college scholarship, according to one study, is worth about $17,800 a year at a public college. (Incredibly, it’s worth three times that at certain elite institutions.) There are 180,000 student athletes who receive scholarships, a tiny fraction of whom play football or basketball.

These scholarships are of substantial value. All expenses paid for four years of school — a free college degree! This in a time when many college graduates walk across the platform to receive their diplomas carrying about $30,000 in student loan debt. There’s no debating how valuable a full ride is to a middle-class American family.

Does a play-for-pay scenario jeopardize the scholarships of these hundreds of thousands of athletes in non-revenue-generating sports? Will fewer scholarships be offered, and will more of those that are distributed go to the revenue-generating sports, football and men’s basketball?

A more salient question: Does play-for-pay jeopardize the existence of non-revenue-generating sports themselves? Some say unprofitable sports like gymnastics, wrestling, swimming, diving, and others would not survive.

Other questions take on a more practical hue. Sure, everybody figures the football and basketball players will get paid, but what about the 95 percent of athletes in any athletic department participating in non-revenue-generating sports? What about all those softball players and shot-putters and lacrosse players? Pay them too? And out of the big pot? Do all athletes across the board get the same salary, or are salaries adjusted per revenue-generating ability of the sport? Or by some other metric? How will Title IX play into any of this?

Will the rich schools able to easily pay out salaries receive an immediate and unfair advantage over schools that struggle financially? Will the poorer schools have to cut sports to remain competitive in football and basketball?

And if athletes will be paid, does that mean athletes will unionize? Ask yourself this: Are you ready to see college jocks go “on strike”?

There are lots of questions and very few answers. John Hinderaker at Power Line blog speculates about how he thinks things will turn out:

I think that Congress ultimately will resolve these issues in favor of permitting athletes in the revenue-generating sports to be paid. This is largely because athletes in the revenue-generating sports are mostly black. As Justice Kavanaugh wrote, “[T]he student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds, end up with little or nothing.” In today’s climate, I think there is little chance that Congress will be deaf to that appeal.

What is not clear is whether, once schools are free not just to recruit athletes but to pay them, college sports as we know them will survive.

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Author: Tom Raabe

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