Article Summary: Money Really Talks in the NCAA by Brian Boyle

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Can American college athletes still be classified as amateurs in a new era that allows them to profit from their “Name, Image and Likeness” (NIL)? And what about the money pouring in from “collectives?” These university booster clubs lure athletes with promises of cash and merchandise – often so much money that it shapes their choice of a college.

Writing in The Daily Upside, Brian Boyle explains that while the landmark 2021 NIL legislation gave student-athletes a nice slice of the financial pie, it also opened a can of lucrative worms. Whoever scores highest in the end, college football and basketball are being irrevocably changed.

Take-Aways

• Since the “Name, Image and Likeness” (NIL) ruling, money has been rushing to student-athletes.
• Team booster groups raise big dollars for financial incentives to entice athletes to come to their schools.
• Compensation guidelines may help clarify the NIL confusion; some propose treating athletes as university employees.

Summary

Since the “Name, Image and Likeness” (NIL) ruling, money has been rushing to student-athletes.

For decades, rules set by the National Collegiate Athletic Association (NCAA) prohibited college athletes from sharing in the billions of dollars generated by their teams’ lucrative TV contracts and other money-making ventures. That changed in 2021 when the NCAA adopted the NIL policy, enabling athletes to profit financially from their “Name, Image and Likeness.” In 2022, athletes raked in roughly $1.2 billion in NIL deals, an 11% increase from 2021. Before NIL, they earned nothing. However, NIL has also spawned a complex and shady “ecosystem” in which wealthy fans – particularly alumni – create and heavily fund not-for-profit booster clubs or collectives that underwrite incentives to lure the best players to their schools.

“The average starter at a major football program now makes about $103,000 a year, according to Opendorse, while the average men’s basketball player with a collective deal earns $37,000. Opendorse estimates that 80% of NIL money stems from collective deals.”

College recruiting has started to resemble pro sports’ free agency, where money typically determines which teams land the best players. This is blurring the line between college athletes and professionals. As this controversy continues, a jittery NCAA is trying to figure out how to maintain its athletes’ amateur status. It wants tighter regulation of NIL programs and booster collectives, but until that comes about, if it does, the competition for college players has assumed a Wild West edge. The IRS is scrutinizing booster clubs, while NIL backers want a larger percentage of teams’ earnings to go to student-athletes. Colleges say this would endanger funding for sports that don’t earn much money, such as tennis and swimming, which they typically finance from football and basketball profits.

Team booster groups raise big dollars for financial incentives to entice athletes to attend their schools.

NIL became a reality in 2021 following a ringing endorsement from all nine US Supreme Court justices. They felt that schools were exploiting student-athletes as “amateurs” – preserving their non-professional status while profiting from their activities.

“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.” (US Supreme Court Justice Brett Kavanaugh)

The NIL mechanism was initially intended to compensate athletes when they endorsed brands or the like. However, donor organizations with more extensive plans formed right after the ruling. The New York Times recently reported that at least 120 such groups are active, including one or more for every college in the Power Five conferences (Atlantic Coast Conference, the Big Ten, The Big 12, the Pac-12 and the Southeastern Conference).

The way booster groups use NIL makes it simple for good players to earn easy money. Iowa quarterback Cade McNamara earns $600 an hour for service projects, like taking meals to the elderly and visiting pediatric hospitals. Some players, notably at Michigan State, can earn up to $25,000 for social media posts that promote their booster group’s charitable efforts. And the University of Utah’s collective leases a $60,000 Dodge truck for every footballer on scholarship to use until he leaves the team.

Compensation guidelines may help clarify the NIL confusion; some propose treating athletes as university employees.

Though the NCAA has official rules determining who can recruit players for their schools, booster groups play an influential role.

“We are concerned that management of college athletics is shifting away from the universities to collectives.” (Big Ten commissioner Tony Petitti)

Penn State coach James Franklin told supporters who paid $2,000 per ticket to attend a fundraiser, “We’ve got to be able to offer a package similar to those other places so that money does not become a factor” in recruiting – which, of course, is already an active concern. Alabama coach Nick Saban, who has five players among the top 100 earners, believes young players now select their school based on where they can maximize their income, even if that college choice may not be in a player’s best interests.

“The whole concept of collectives…created this environment… I’m not sure that anybody really had the insight or the vision to see that was going to happen.” (Nick Saban)

Some student-athlete advocates suggest that schools should treat players as employees and pay them directly. For instance, three former Division I players have filed an antitrust action against the NCAA seeking NIL direct payments to athletes. They contend that “games themselves are the most essential uses of players’ name, image and likeness — opening the door to a more direct revenue-sharing model.” The US National Labor Relations Board has filed a complaint against the University of South California, the Pac-12 Conference and the NCAA, asserting that players in money-making sports are “fundamentally misclassified as non-university employees.” Big Ten Commissioner Tony Petitti shared his forthright conclusion when he told US senators at a 2023 hearing that collectives are “pay-for-play” mechanisms masquerading as NIL.

About the Author

The Daily Upside writer Brian Boyle is also a Los Angeles Times contributing opinion writer whose work has been syndicated in major newspapers. He is a digital homepage editor and reporter at SFGate, and his writing has appeared in Slate, Vice, Milwaukee Magazine, and elsewhere