The day is moving closer when US student athletes could be earning millions of dollars for the first time.
Although US college sports generate vast sums for their institutions in sponsorships, media rights and ticket sales, athletes are not compensated beyond the cost of university attendance under strict rules enforced for decades.
But legal victories for star athletes and state laws coming into force next year have in effect brought down the existing system.
For a star player, the new landscape could mean earning “more than a million dollars per year”, said Sam Weber, senior director of corporate marketing at Opendorse, a social media analytics platform for athletes. According to another study, top basketball players could generate as much as $6.5m per year.
The question now — with the division of more than $8bn in annual revenue from college sport at stake — is not if players will earn money, but how.
Last week, Mark Emmert, president of the National Collegiate Athletic Association, stepped up his pleas for federal legislation to govern how athletes will capitalise on their name, image and likeness, known as NIL.
The governing body has already pledged to amend its rules on NIL by January 2021, but Mr Emmert told the Senate judiciary committee he feared “a patchwork” of differing state laws — the first due to take effect in Florida next year — would make it impossible to create a level playing field.
Colorado and California also have NIL laws coming into force, with other states likely to follow, setting out what marketing opportunities belong to the athletes versus the NCAA or the universities whose colours they wear. The NCAA, meanwhile, is keen to ensure students aren’t considered employees of their universities, and that new rules don’t undermine existing broadcasting and sponsorship agreements with institutions.
Without federal intervention, questions will remain about who will have authority to enforce rules, Mr Emmert said at the recent hearing. “I must stress we need Congress’s help,” he said.
He added that states are taking up NIL bills “not because they want to improve opportunities for students but to make sure they’re competitive in the bidding wars” for talented athletes.
Lindsey Graham, Republican senator of South Carolina, warned that allowing students to earn income from their affiliation with college sports would pave the way for deep-pocketed alumni to lure the most promising stars to their institutions.
“You’re going to unleash holy hell if you don’t control people willing to buy a player to come to a school. How do we deal with that?” he said.
Shadow bidding wars have long existed, but they have largely been limited to paying to entertain potential students and their families, tightly controlled by NCAA rules. In 2018, a former Adidas executive and two associates were found guilty of conspiring with college coaches to pay bribes to students and their families in exchange for those students’ commitments to play for Adidas-sponsored universities.
The real pay-off is supposed to come after student athletes graduate from the NCAA level, which serves as a de facto development league for some professional sports.
Donald Dell, a prominent sports attorney and agent who has managed shoe contracts for former basketball star Michael Jordan and ex-tennis player Stan Smith, said he had had to counsel young clients against accepting any favour or perk.
“If someone offers you the use of a car for three months, turn it down, because some other college coach is going to spy on you and rat you out,” he advised one client. He cited the inequity of university coaches earning millions of dollars while “I’m worried about [an athlete] taking a $200 suit”.
An important issue in the debate is whether the NCAA will be granted immunity from competition laws so it can regulate the NIL business.
The governing body has faced a number of legal challenges on this front, most notably a 2014 judgment that it violated antitrust laws in restricting compensation for former University of California, Los Angeles basketball player Ed O’Bannon and other players.
Another antitrust case, filed last month by Arizona State swimmer Greg House and University of Oregon basketball player Sedona Prince, seeks similar relief from the NCAA’s limitations on NIL compensation.
In Senate testimony, Mr Emmert said such cases “interfere with the association’s ability” to carry out its existing duties. He told the committee that “we are not seeking broad-based antitrust exemptions to do anything but solve this issue” of defining NIL statutes.
Matt Mitten, executive director of the National Sports Law Institute at Marquette University Law School, recommended to the Senate judiciary committee that a third party other than the NCAA be asked to establish a free market for NIL revenues.
“Student athletes need someone they can go to, to help them figure out what their fair market value is,” said Mr Mitten.
American football players — whose college games can attract TV viewerships of up to 26m — and the stars of the March Madness college basketball tournament would most probably be the biggest beneficiaries, even if estimates are hard to come by.
A 2013 study by the National Collegiate Players Association estimated that American football players at top university programmes could earn an average of $715,000 per year above the value of any scholarships they received to attend school.
Similarly, men’s basketball players at top schools could earn between $1.5m to $6.5m apiece in endorsements, it said.
The advent of social media had given individuals broad ability to build and grow their own audiences, Opendorse’s Mr Weber said.
“Estimated annual earnings could range anywhere from a couple of a hundred dollars to, if you’re talking about a Heisman Trophy-contender [American] football player, to a Zion Williamson-level basketball player, a projected more than a million dollars per year.”
In some cases, athletes outside the most televised sports could gain similar earnings potential if they become an overnight sensation, such as UCLA gymnast Katelyn Ohashi.
After a video of her floor exercise routine went viral in early 2019, she quickly amassed 1m followers on Instagram, though she wasn’t able to capitalise on her fame under NCAA rules.
Athletes who might achieve similar instances of viral fame “stand to be just as, if not more valuable, than 90-95 per cent of football players”, Mr Weber said.
Donald Dell, the sports attorney, said he firmly supported NIL reform “but the danger — and there is a serious danger — is how do you police it in a fair way?”