At the end of April, the NCAA Board of Governors “met” to discuss a number of topics affecting college athletes. The most highly anticipated subject was the ruling on name, image and likeness (NIL). After reversing course earlier in 2020, the Board of Governors ruled in favor of letting college athletes profit from their NIL, with conditions.
While exact rules have yet to be made, most see this as a positive development for the NCAA and college athletes. Ellen Staurowsky, EdD, a professor in the Sport Management program in the LeBow College of Business, explains the NCAA Board of Governors’ decision and what it means for college athletes.
Why did the NCAA Board of Governors release a report at the end of April about principles they will consider in developing rules to allow college athletes to reap financial benefits from a limited number of business opportunities?
The recent announcement from the NCAA Board of Governors signaling that the Association is moving in a direction to relax rules that prohibit athletes to earn compensation from the use of their names, images and likenesses (NILs) is a reaction to numerous lawsuits (Bloom v. NCAA, 2004; White v. NCAA, 2008; O’Bannon v. NCAA, 2014; Jenkins v. NCAA, 2019). Because the NCAA has failed to act in altering their rules structure, three states – California, Colorado, and Florida – adopted legislation to restore economic rights that NCAA “amateurism” rules strip away from athletes.
An additional 31 state legislatures are contemplating similar laws and a bi-partisan U.S. Senate Working Group, led by Senators Chris Murphy (D-CT) and Mitt Romney (R-UT) are scrutinizing the business practices of the college sport industry. Describing the impetus for the Working Group, Senator Murphy stated in December 2019, “College athletes are being used as commodities to make money for the NCAA, colleges and corporations, while not being compensated for the work they do, nor given the appropriate health care and academic opportunities they deserve.”
What does the NCAA Board of Governor’s report on NIL mean for college athletes going forward?
In theory, a change in NCAA rules will allow college athletes, for example, to work as social media influencers, appear in commercials for certain products and services, enter into endorsement deals with companies and engage in entrepreneurial ventures. Because the NCAA’s announcement last week was long on public relations but short on details, it is difficult to know exactly what this means for college athletes.
Either through changes in NCAA rules or through laws being passed at the state level, college athletes will be able to earn money through ventures outside of the athletic departments and institutions. College athletes will also have access to agents and representatives to cultivate, vet and manage opportunities.
In your opinion, is this good or bad for athletes?
Rule changes, legal decisions or laws that address the economic rights of college athletes and create avenues for them to have agents and representation to help expand their personal brands is a good development. Whether college athletes are U.S. citizens or are participating on college teams in the U.S. from other countries, they are deserving of the opportunities afforded under U.S. law to engage in the commercial marketplace in a way that benefits them economically. College athletes have significant value that can be capitalized on and is suppressed by existing rules that threaten their athletic eligibility if they enter into deals that allow them to profit from the use of their names, images and likenesses.
Few understand that for many college athletes, even those who are on athletic scholarships, their financial situations are often precarious. According to a survey conducted by the Hope Center for College, Community and Justice of NCAA Division I athletes, 14 percent reported experiencing homelessness during some period of time in the previous 12 months before completing the survey and 24 percent of those responding indicated that they had food insecurity in the previous 30 days before completing the survey.
Who will it affect the most (for example: male athletes, female athletes, athletes in revenue sports)?
The college sport landscape is diverse. Sports such as football and men’s and women’s basketball typically have a larger media presence, audiences and corporate interests. That said this shift is happening at a time when the influence individuals create on social media hinges on originality, creativity and market awareness. Thus, while it is anticipated that college athletes in the Power Five conferences and in revenue-producing sports are more likely to have more lucrative opportunities, enterprising college athletes across all three NCAA divisions will have the opportunity to open up the market and test their value.
The fact that only small percentages of college athletes move on to the pros is the very reason why this opening up of business opportunities for athletes while they are playing in college is so important. For the majority of college athletes, their prime earning years are in college. Because of the way the rules have been structured, their value has been significantly suppressed over time. This shift lifts that cap and it will be interesting to see who is deemed by the market to have value.
What might these deals mean in terms of revenue for college athletes?
In 2014, Electronic Arts agreed to compensate 29,000 current and former athletes for the use of their NILs in games distributed by the company, resulting in payments to athletes ranging from $1,200 to $7,200.
In a study done by AJ Maestas and Jason Belzer (2019) exploring NIL worth for college athletes, they estimated that high profile college football players like Louisiana State University’s Joe Burrow, the University of Alabama’s Tua Tagovailoa and the University of Oklahoma’s Jalen Hurts had the potential to garner $700,000, $440,000, and $390,000 respectively in annual endorsement revenue from their social media presence on Instagram. Less popular athletes were found to have the potential to earn between $5,000 to $30,000 per year.
There are conflicting arguments about how this will affect female athletes – both positively and negatively. How do you think this will affect female athletes?
There should be no question that the relaxing of rules inhibiting the ability of college athletes to seek out endorsement deals and to engage in entrepreneurial business ventures will benefit female athletes. They could potentially benefit the most as a group. While the official machinery of the college sport industry has been calibrated to promote men’s sports, it has at the same time suppressed opportunities for women’s sports.
Famed Olympic swimmer, Katie Ledecky, still had two more years of college eligibility left at Stanford when she decided to go professional, opening up endorsement opportunities foreclosed to her by NCAA rules. Female college athletes with significant social media followings have already lost out of market opportunities. For example, UCLA gymnast Katelyn Ohashi, whose performances took the Internet by storm in the spring of 2019, earning her recognition with two ESPY awards, was denied the opportunity to take advantage of commercial offers that came her way due to NCAA eligibility rules.
Media interested in an interview with Dr. Staurowsky should contact Annie Korp at 215-571-4244 or amk522@drexel.edu.