NCAA student-athlete pay review a ‘small first step,’ and a pre-emptive move

by Michael Tilley (mtilley@talkbusiness.net) 342 views 

The about-face made by the National Collegiate Athletic Association (NCAA) on Tuesday (Oct. 29) on the subject of paying athletes was not a surprise to those monitoring the long-brewing, controversial issue. One writer called it a “small first step,” and Fayetteville attorney J.R. Carroll said it is an attempt by the NCAA to “get ahead of a situation they just can’t control.”

Indianapolis-based NCAA issued a statement Tuesday that reversed course on the organization’s historic stance against any form of direct, non-scholarship pay to student-athletes.

“In the Association’s continuing efforts to support college athletes, the NCAA’s top governing board voted unanimously to permit students participating in athletics the opportunity to benefit from the use of their name, image and likeness in a manner consistent with the collegiate model,” the NCAA noted in its statement.

The NCAA Board of Governors directed each of the NCAA’s three divisions to begin reviewing policies in an effort “to provide the best possible experience for college athletes,” said Michael Drake, chair of the NCAA board and president of The Ohio State University. The NCAA board issued the following guidelines that new policies – to be drafted no later than January 2021 – should include.
• Assure student-athletes are treated similarly to non-athlete students unless a compelling reason exists to differentiate.
• Maintain the priorities of education and the collegiate experience to provide opportunities for student-athlete success.
• Ensure rules are transparent, focused and enforceable and facilitate fair and balanced competition.
• Make clear the distinction between collegiate and professional opportunities.
• Make clear that compensation for athletics performance or participation is impermissible.
• Reaffirm that student-athletes are students first and not employees of the university.
• Enhance principles of diversity, inclusion and gender equity.
• Protect the recruiting environment and prohibit inducements to select, remain at, or transfer to a specific institution.

Hunter Yurachek, athletic director at the University of Arkansas, seemed to support the NCAA move.

“Proud that we are able to provide a high level of support for our @ArkRazorbacks student-athletes as part of their collegiate experience. I look forward to working with my colleagues within the NCAA to further enhance support for the benefit of all student-athletes,” Yurachek noted in a Twitter statement.

Southeastern Conference Commissioner (SEC) Greg Sankey said the move is a step toward the “modernization of rules.” The University of Arkansas is an SEC member.

“We look forward to participating in a process that will produce an outcome that is thoroughly considered, fair and beneficial to student-athletes and consistent with the principles and guidelines outlined today by the NCAA Board of Governors,” Sankey said in a statement.

John Feinstein, author of 25 books about sports and the sports industry, and a columnist for The Washington Post, told the PBS Newshour the NCAA move is a “small first step.” He said the NCAA was pressured to change course following passage of a California law that would by 2023 allow student-athletes to earn money from businesses, organizations and other entities who seek to market the players’ name and likeness.

“(T)hey’re trying to hold off the avalanche that’s coming in their direction of people saying, we’re not buying this bit anymore that the sky will fall if college athletes get paid by outside agencies,” Feinstein said during the interview.

Continuing, he noted: “But what it really is, it’s an opening bargaining ploy, because they are going to say, OK, we will do this, and the lawmakers are going to say, no, we want that. And then the NCAA, they will say — will say, what about this? And they’re going to try to give away as little of the store as they can, so that the schools and the NCAA itself continue to — can continue to rake in the billions of dollars they make off of these kids.”

And the NCAA does make billions.

According to Zack’s Research, the NCAA represents 1,117 colleges and universities, 100 athletic conferences and 40 affiliated sports organizations. The majority of the NCAA’s revenue comes from two primary sources: the Division I men’s basketball tournament marketing and television rights ($821.4 million) and championship ticket sales ($129.4 million).

“In 2016, 27 schools received at least $100 million in revenue from their sports programs. This represents a substantial increase in revenue over a two-year period, with only 13 schools’ sports programs reaching $100 million in revenue in 2014,” Zack’s noted in its report.

Football garners more revenue for colleges than the next 35 other sports combined at Division I schools, Zack’s reported. On average, football brings in $31.9 million in revenue, while men’s basketball – the second-highest grossing sport – comes in a distant second at $8.1 million.

But the NCAA has argued it provides value for student-athletes. According to the NCAA, more than 150,000 student-athletes receive $2.7 billion in athletic scholarships each year. Non-financial services provided to student-athletes include medical care, academic support services, exposure through travel and “elite training opportunities,” notes the NCAA.

Carroll, a partner in the Fayetteville office of Kutak Rock and an adjunct professor of sports management at the University of Arkansas School of Law, is not sure the NCAA can develop rules that will be acceptable by all states and/or college divisions.

“The question is, ‘Will the states and the other parties be happy with what the NCAA proposes?’ Carroll told Talk Business & Politics. “Is California going to be willing to defer to the NCAA … if the NCAA has a different way to handle this issue?”

Carroll, who represents seven National Football League Players, believes a major sticking point will be the rules around “what is a legitimate business purpose” in paying a student-athlete for their name and likeness. For example, Carroll explained, if a booster wants to pay a player $500,000 for name and likeness rights, will that booster – as an individual and not a corporation or organization – be allowed to do so?

“It’s going to be very hard to separate out legitimate name and likeness claims and those that are not. … That’s the angle that I don’t think has really been discussed,” he said.

Carroll said “in a perfect world, there would be a uniform” national statute establishing a framework that allows each state to modify the rules as long as they stay within the scope of the law.

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