Skeptics loom as NCAA builds guardrails around compensation
For more than 60 years, NCAA leaders have insisted college athletes had to be amateurs and to be amateurs they could not be paid for being athletes — by anybody.
That will no longer be the case. The NCAA announced Wednesday it is moving forward with a plan to allow college athletes to earn money for endorsements and a host of other activities involving personal appearances and social media content.
It’s a big deal — “unprecedented,” Ohio State President and NCAA Board of Governors chairman Michael Drake called it. But there are important details to be sorted out before NCAA membership votes on legislation in January and there are plenty skeptical lawmakers and lawyers watching.
“The challenge of evaluating this is we don’t know where they have landed yet,” said Gabe Feldman, director of the Tulane University sports law program.
While athletes will be able to cash in on their names, images and likenesses as never before, the money won’t come from the NCAA, schools or conferences.
The broad plan is to allow athletes to strike deals with third parties, but require them to disclose those agreements with their schools. The NCAA and schools want to regulate for improprieties so payments aren’t actually recruiting inducements or pay-for-play schemes.
Guardrails is the word college sports leaders are using to describe those regulations. The next phase is building those guardrails.
There will be no cap on what the athletes can earn, said Ohio State athletic director Gene Smith, who led the group that produced the recommendations approved by the Board of Governors.
That’s important because the NCAA is still fighting the appeal of an antitrust case in which the plaintiffs claimed the association and its member schools and conferences have been illegally capping compensation to athletes at the value of a scholarship.
What the NCAA will attempt to do is monitor deals athletes make and require them to disclose details.
Boosters, those who support schools with donations, likely won’t be immediately disqualified from working with athletes. But the NCAA fears individuals and companies using business relationships with athletes as cover for paying prospects to attend a particular school.
How to draw that line has yet to be resolved. The NCAA also has to figure out how to assess the fair-market value for an athlete appearing in a television commercial for a local business, signing autographs at a memorabilia shop or promoting a product or event on social media.
“It is still a moving target,” Smith said. “But again, we just have to be reasonable. If I do a deal with Panera Bread and I do two likes and they pay me $50,000 for that, I’m not so sure that is in the realm of what we’re talking about.”
Big East Commissioner Val Ackerman, co-chair of the working group with Smith, said there has been discussion about creating a third party to make those assessments and manage disclosure.
“This has been referred to alternatively to as a clearinghouse or a registry or an NIL center,” Ackerman said. “And I don’t know that there would be an approval mechanism, but the notion would be to create the sunshine and the transparency that would allow us to monitor valuations and booster involvement. And if there are some concerning patterns, we would be able to help screen those out or figure out how to address those.”
Athletes will not be allowed to use their schools’ logos or brands in their personal deals. So if Clemson quarterback Trevor Lawrence appears in a TV ad, he won’t be allowed to wear the school’s familiar orange Tiger Paw.
While NCAA leaders celebrated the move as another example of evolving to better serve college athletes, there are plenty of skeptics. The NCAA has been talking with members of Congress about federal legislation that would render moot various state laws and perhaps stave off future legal challenges.
“This proposal is one step forward, one step back,” tweeted Sen. Chris Murphy, a Connecticut Democrat who has been pushing for more economic rights for college athletes. “The NCAA wants to limit athlete endorsement deals in a way that could make them totally impractical. And the NCAA wants Congress to give it total power of athletes’ compensation. That should be a non-starter.”
California lawmakers have already passed a bill that would make it illegal for NCAA schools to prohibit college athletes from making money on endorsements, social media advertising and other activities. The law goes into effect in 2023. Dozens of states have followed California’s lead; a Florida bill awaiting the governor’s signature would go into effect July 2021.
“Recommendations today by the ??NCAA? are about protecting their pockets, not student athletes,” tweeted Republican Chip LaMarca, a Florida state lawmaker. “Now they are shifting blame for their deliberate inaction to states that have passed meaningful legislation to protect students’ right to earn a living.”
Jeffrey Kessler, the lead attorney in an antitrust cases against the NCAA that is still in appeals, said the NCAA’s move toward NIL compensation for athletes “completely destroys every argument they’ve made in the past.”
“Because their defense has been if you allow to permit any type of compensation to the athletes beyond what they call cost of attendance, this will destroy the whole concept of amateurism and destroy fan interest in college sports,“ he said.
Kessler said now there is no justification left for any of the NCAA’s restrictions.
NCAA President Mark Emmert had a different take.
“It’s a natural extension,” he said, “of the steps that the NCAA member schools have taken over the past years to constantly improve the college athlete experience as an integral part of higher education.”
