Five takeaways from NCAA’s move toward allowing college athletes to be paid for name, image and likeness
Revolution in the NCAA moves about as rapidly as a glacier, but Wednesday brought about one of those college sports moments that shall be remembered for decades.
The organization’s Board of Governors approved the recommendations of a working group, formed last May and co-chaired by Big East commissioner Val Ackerman and Ohio State athletic director Gene Smith, assigned to consider whether and how to allow college athletes to earn money from their name, image and likeness.
That group proposed a broad set of guidelines to permit athletes to use their NIL rights for such activities as personal appearances, autograph signings, commercial endorsements and social media influencing. Their work will be considered by the membership of NCAA Divisions I, II and III and likely voted upon at the January 2021 convention for adoption by the 2021-22 academic year.
The NCAA made it clear, though, that it wants to maintain a separation between college and professional athletics and that student-athletes will not be considered employees.
“It’s really important that all of us recognize that what the Board of Governors approved and what the working group put forth is the clear framework within which a lot of detail is still to be developed, NCAA president Mark Emmert said. “That’s what the three divisions are working on now. Some of the answers will be ambiguous until all of the details are fleshed out in the coming nine months.”
There will be lots of issues considered by the membership, but the working group endeavored to address the biggest ones in its proposal:
1. Boosters can’t use the new NCAA rules to help programs ‘buy’ players.
The documents presented by the NCAA specifically cite that there will be “no use of name, image and likeness for recruiting by schools or boosters.” This means Coach Jones at State U still can bring along to a home visit the assistant coach who’s been the primary recruiting contact for the star high school quarterback, but he can’t include the local car dealer.
This does not necessarily mean identified athletic program boosters will not be able to contract with their favorite team’s athletes for endorsements or personal appearances. That’s among the sticky issues still to be fully ascertained.
“That is one of the big issues, of course, that the membership needs to develop guardrails around and determine if they’re engaged, and how, and make sure we have a process to monitor and enforce,” Smith told Sporting News. “That has to go to the membership, and ultimately legislation will be developed around that. Their involvement will be defined.”
It is common for professional athletes to do personal appearances or endorsements for various businesses in their communities. In those cases where such events have occurred, a market has been established. Such arrangements with college athletes will have to coincide with “fair market value.” In other words, if an NFL player did a personal appearance at a car dealership for $5,000, that same car dealer probably would not be able to pay an NCAA athlete $25,000 for the same three hours. That would suggest it’s not being done to benefit the car dealer’s business but rather to boost his favorite college team.
It is expected that university compliance officers will be tasked with monitoring these arrangements and the NCAA may hire additional staff to help in this area.
“This is probably one of the most important points we still have to iron out. This has come up over and over again by our schools and is probably the source of the most concern about how to make this workable in our system,” Ackerman told SN. “It doesn’t mean we can’t try, and so the work ahead will be to figure out how to regulate booster involvement, particularly in pre-enrollment.
“There may be levels of boosters. There may be some who have more incidental contact or relationships with our schools who, after a student/athlete enrolls, may be in a position to present a legitimate and worthwhile activity.”
2. This does not signal the return of college football and basketball video games.
EA Sports released a series of NCAA football video games between 1993 and 2013, but the title became untenable after multiple conferences denied trademark use at a time when college athletics were facing court action in the case known as O’Bannon v. NCAA.
The working group determined that the sort of group licensing necessary for college athletics to get back in the video game business is problematic.
“It was the group’s conclusion that group licenses, which would combine school trademarks with student/athlete NIL in products like video games, replica jerseys and trading cards are unworkable in college sports,” Ackerman said, “largely because of the absence of a recognized bargaining agent to manage the terms of group NIL use on behalf of the student athletes.
“The creation of a legal group-license structure is a topic that also may be suitable for congressional intervention.”
3. Athletes can work with marketing representatives. Probably.
It seems a lot to ask of college athletes for them to develop and manage all endorsement and personal opportunities that might become available. There will be tax considerations, and there is also the question of whether accepting an endorsement for some athletes will be worthwhile given that it might push them over income limits relative to federal Pell grants. But the NCAA never has permitted athletes to have what might be termed “sports agents” while participating in college sports.
This will be a tricky space to navigate, but, if it comes to fruition, this may alleviate some of the issues that have developed over the past two decades with agents establishing relationships with high school and college athletes even though representation agreements have not been permissible under NCAA rules.
College basketball players now can be represented by player agents while formally exploring draft options, but those agreements must be voided if the athlete returns to an NCAA program.
“That is still up for grabs with the additional work that has to be done,” Smith said. “The membership has to really figure that out and ultimately develop legislation, and that monitoring activities around that will occur. Their level of engagement will be defined.”
4. ‘There is no cap’ on the amount of money college athletes can earn.
Those were Smith’s words. And it’s logical given the number and nature of activities covered by new NIL freedoms when they arrive. For instance, if an athlete who happens to be a talented musician records an album and it becomes a Taylor Swift-level smash, or if another is able to become a social-media influencer with the reach of a Kylie Jenner, or if someone launches a business that trends toward becoming the next Google, the NCAA is expecting no longer to prevent this.
“It’s just a matter of monitoring the right way, making sure there is not a recruiting issue in that space,” Smith said.
Fair market value will be an important component, though. As Smith mentioned, if one were to be paid tens of thousands of dollars for just a couple of likes on a social media post, it would be obvious that it would not meet the standard.
“There’ll be some subjectivity there, because that’s the market,” Smith said, “but the reality is the reasonable and rational and prudent review of that activity will hopefully allow us to determine that it’s appropriate.”
5. The NCAA really wants Congress to act on this.
Led by California, which passed the Fair Pay to Play Act last October, a number of states have either established or have considered bills to allow college athletes in their jurisdictions to be paid for name, image and likeness.
That amalgamation of state laws is complicated for the NCAA, which conducts national athletic competitions its members prefer to be contested under the same set of rules. Congressional action on NIL would have the potential to supersede all of that.
Perhaps even more importantly, the NCAA could be shielded from legal action if a move to allow NIL rights to college athletes were federally ordained. When the membership decided in 2015 to allow universities to offer cost-of-attendance payments to athletes, the NCAA had to pay more than $200 million to settle litigation from athletes who hadn’t gotten access to those funds.
“As the legal and legislative landscape around college sports continues to evolve, we also see the challenges that are in front of us to positively effect change,” Emmert said. “Indeed, our efforts to improve college athletes’ experiences have often been met with increased litigation and challenges that significantly limit the NCAA’s ability to address those needs and opportunities.
“It’s clear we need Congress’ help in all of this.”
This will not be an easy time to get a bill through Congress. The COVID-19 epidemic has the government considering more pressing issues, and it is an election year. There has been bipartisan support in many states, though, for action in this direction.
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