Student athlete compensation

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In college athletics in the United States, a student-athlete who participates in a varsity sport on any and all levels is eligible to profit from their name, image, and likeness (NIL). Historically, the National Association of Intercollegiate Athletics (NAIA) was the first association to permit pro-am, as the National Collegiate Athletic Association (NCAA) resisted efforts to compensate college athletes beyond the scholarship and stipend.[1] However, the Supreme Court's decision in NCAA v. Alston (2021) allows for non-scholarship earned income across every division.[2]

History[edit]

The NCAA has long maintained that student-athletes cannot be compensated in the name of "amateurism."[3] In 1953, the NCAA created the term "student-athlete" in response to the Colorado Supreme Court's ruling in University of Denver v. Nemeth that an injured football player was an "employee" of the University of Denver and therefore entitled to workers' compensation.[1] Despite further attempts by the NCAA to classify student-athlete compensation as a violation of the Commerce and Contracts Clauses of the U.S. Constitution, "amateurism" in college sports has begun to fade as the push for student-athlete compensation grows stronger.[1]

The latest movement in the college athlete compensation space focuses on payment for name, image, and likeness, a practice first adopted by the State of California in 2019.[1] Namely, in September, Governor Gavin Newsom signed Senate Bill 206, which generally allowed student-athletes in California to accept compensation for the use of their name, image, and likeness.[4] The "Fair Pay to Play Act" bill was authored by California state senators Nancy Skinner and Steven Bradford and advanced with testimony from former Stanford volleyball star and 2015 national freshman of the year Hayley Hodson and Oklahoma State University football star Russell Okung.[5][6][7][8] No federal statutes currently touch on this topic, and the only federal regulation permitting college students to accept compensation is 34 CFR § 675.16, which only relates to work-study programs.[9]

However, the Supreme Court's 2021 decision in NCAA v. Alston shed light on modern federal attitudes towards student-athlete compensation.[2] In this case, the Court struck down any potential limitations on education-related benefits that student-athletes may receive.[2] Most notably, the Court – and especially Justice Brett Kavanaugh – rejected the NCAA's "amateurism" argument as an overly broad and outdated defense for failing to allow its revenue-drivers (i.e., student-athletes) to receive compensation.[2] The NCAA contended that the Court should defer to its amateurism model because it is a joint venture along with its member schools, but the Court instead reasoned that deference was inappropriate since the NCAA has a monopoly in the relevant market.[2] The Court further rejected the NCAA's appeal that it was not a "commercial enterprise," noting the "highly profitable" and "professional" nature of certain college sports.[2]

Shortly after the Court's decision in Alston, the NCAA issued an interim name, image, and likeness policy which permits student-athletes to earn this compensation.[10] States have also followed suit by enacting similar laws.[1] For example, Illinois Public Law 102-0042 permits athletes to receive market-value compensation for the use of their name, image, and likeness.[11] Some scholars have noted the tax consequences that may arise from student-athlete compensation.[12]

Several startups like ATHLYT have begun to connect advertisers with their student-athlete members shortly after the NCAA enacted their interim NIL policies. Grambling University signed what is believed to be one of the first NIL deals in 2022.[13]

In July 2023, multiple bills were introduced by members of Congress to regulate NIL.[14][15][16]

High school athletes[edit]

Athletes still in high school began signing NIL deals in May 2022, beginning with Nike signing Harvard-Westlake School soccer players Alyssa Thompson and Gisele Thompson,[17] followed by NIL deals signed by basketball prospects Bronny James, Dajuan Wagner Jr., and JuJu Watkins in October 2022.[18] Some high-school athletics associations subsequently adjusted their rules to allow high-school athletes to sign NIL deals while retaining their athletic eligibility. For example, the Oregon School Activities Association approved student NIL deals on October 10, 2022,[19] leading to a local apparel company signing two Oregon Ducks basketball commits on October 21 in the state's first high-school NIL deals.[20] Other states allowed high-school NIL deals with restrictions, such as Missouri, which enacted a state law in July 2023 allowing high-school NIL deals only if athletes commit to a Missouri-based college.[21]

Life Center Academy basketball prospect Kiyomi McMiller signed Nike label Jordan Brand's first high-school NIL deal in February 2023,[22] and in July 2023 Lake Oswego High School senior Mia Brahe-Pedersen signed Nike's first high-school track-and-field NIL deal.[23]

Media involvement[edit]

Due to the increasing popularity of college sports because of television and media coverage, some players on college sports teams are receiving compensation from sources other than the NCAA.[24] For instance, CBS paid around $800 million for broadcasting rights to a three-week 2014 men's basketball tournament.[24] Because of the revenue and positive attention players bring to their colleges, there is a high demand to be fairly compensated.[24] However, the NCAA forbids players from accepting external forms of compensation, such as payment or improved grades.[24] Instead, the NCAA traditionally compensates players through athletic scholarships that cover the cost of tuition and other academic expenses.[24]

Collectives[edit]

The Internal Revenue Service defines collectives as organizations which are "structurally independent of a school, yet fund NIL opportunities for the school’s student-athletes." They can be tax-exempt or for profit entities which can either package business opportunities in a marketplace, or pool booster and supporter funds and deliver them to athletes.[25] Most Division I universities now have collectives which can provide funds for selected athletes or a full team.[26][27] However, there has been criticism that the use of collectives may circumvent Title IX which require equal opportunities between men and women in college sports.[28]

References[edit]

  1. ^ a b c d e Tepen, Luke (January 1, 2021). "Pay to Play: Looking Beyond Direct Compensation and Towards Paying College Athletes for Themselves". Washington University Journal of Law & Policy. 65 (1): 213–246. ISSN 1533-4686. Archived from the original on October 8, 2021. Retrieved October 8, 2021.
  2. ^ a b c d e f "NCAA v. Alston" (PDF). U.S. Supreme Court. Archived (PDF) from the original on October 1, 2021. Retrieved October 8, 2021.
  3. ^ Holden, John T.; Edelman, Marc; McCann, Michael (March 11, 2022). "A Short Treatise on College-Athlete Name, Image, and Likeness Rights: How America Regulates College Sports's New Economic Frontier". Georgia Law Review. Rochester, NY. SSRN 4055530. Archived from the original on July 6, 2023. Retrieved August 1, 2022.
  4. ^ "Bill Text - SB-206 Collegiate athletics: student athlete compensation and representation". leginfo.legislature.ca.gov. Archived from the original on October 8, 2021. Retrieved October 8, 2021.
  5. ^ Chuck Culpepper (June 30, 2021). "This state senator once caused McDonald's to change. No wonder she took on the NCAA". The Washington Post. Washington, D.C. ISSN 0190-8286. OCLC 1330888409. Archived from the original on August 4, 2022. Retrieved February 28, 2022.
  6. ^ "Senators Bradford and Skinner Respond to NCAA's Announcement on Name, Image, and Likeness". April 30, 2020. Archived from the original on February 28, 2022. Retrieved February 28, 2022.
  7. ^ Mello, Felicia (July 3, 2019). "Should college athletes profit from their prowess? NCAA says no, but California may say yes". Calmatters. Archived from the original on February 28, 2022. Retrieved February 28, 2022.
  8. ^ "If college athletes could profit off their marketability, how much would they be worth? In some cases, millions". USA Today. Archived from the original on February 28, 2022. Retrieved February 28, 2022.
  9. ^ "34 CFR § 675.16 - Payments to students". LII / Legal Information Institute. Archived from the original on October 8, 2021. Retrieved October 8, 2021.
  10. ^ "Interim NIL Policy" (PDF). Archived (PDF) from the original on September 26, 2021. Retrieved October 8, 2021.
  11. ^ "Illinois General Assembly - Full Text of Public Act 102-0042". www.ilga.gov. Archived from the original on September 30, 2021. Retrieved October 8, 2021.
  12. ^ Kisska-Schulze, Kathryn; Epstein, Adam (September 1, 2020). "Changing The Face of College Sports One Tax Return At a Time". Oklahoma Law Review. 73 (3). Rochester, NY: 457–503. SSRN 3684573. Archived from the original on July 6, 2023. Retrieved August 1, 2022.
  13. ^ Bailey, Analis (January 31, 2022). "Grambling State name, image and likeness deal would provide student-athletes with annual income". USA Today. Archived from the original on November 5, 2022. Retrieved November 5, 2022.
  14. ^ "Senators offer latest bill aimed at college sports, NIL reform" ESPN. Retrieved 2023-07-26.
  15. ^ "Joe Manchin and Tommy Tuberville introduce bill on name, image and likeness rules for college sports" NBC News. Retrieved 2023-07-26.
  16. ^ "New NIL bill pushes Athlete's Rights, including group licensing" Sportico. Retrieved 2023-07-26.
  17. ^ VanHaaren, Tom (May 17, 2022). "Nike signs sister soccer players to company's first high school name, image and likeness deal". ESPN. Retrieved August 9, 2023.
  18. ^ "Bronny James, four others sign NIL deals with Nike". Fox Sports. October 10, 2022. Retrieved August 9, 2023.
  19. ^ Dieckhoff, Andy (October 10, 2022). "OSAA approves changes to NIL rules for high school student-athletes". Portland Tribune. Retrieved August 9, 2023.
  20. ^ Streng, Nik (October 21, 2022). "West Linn's Jackson Shelstad, Jesuit's Sofia Bell sign first Oregon high school NIL deal". The Oregonian. Retrieved August 9, 2023.
  21. ^ Bayless, Kacen (July 17, 2023). "New MO law allows high school athletes to cash in on image if they sign to in-state college". The Kansas City Star. Retrieved August 9, 2023.
  22. ^ "Top hoops prospect Kiyomi McMiller signs NIL deal with Jordan Brand". ESPN. February 22, 2023. Retrieved August 9, 2023.
  23. ^ Streng, Nik (July 3, 2023). "Lake Oswego's Mia Brahe-Pedersen makes history as first high school track and field athlete to sign NIL deal with Nike". The Oregonian. Retrieved August 9, 2023.
  24. ^ a b c d e Sanderson, Allen R.; Siegfried, John J. (February 1, 2015). "The Case for Paying College Athletes". Journal of Economic Perspectives. 29 (1): 115–138. doi:10.1257/jep.29.1.115. ISSN 0895-3309.
  25. ^ "Name, Image, and Likeness (NIL) Collectives". Internal Revenue Service.
  26. ^ "Inside the world of 'collectives' using name, image and likeness to pay college athletes, influence programs". CBSSports.com. January 26, 2022. Retrieved January 1, 2024.
  27. ^ Furlong, Josh. "Utes NIL collective expands leased vehicles offer to basketball, gymnastics athletes". www.ksl.com. KSL. Retrieved January 1, 2024.
  28. ^ "Colleges getting cozy with NIL collectives worries Title IX activists". Dallas News. September 18, 2023. Retrieved January 1, 2024.

Further reading[edit]

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