Exploitation on college campuses is back in session. Unfortunately, some college workers are underpaid. These workers are the football and basketball players at Power Five Schools. These players generate millions of dollars for their universities and the NCAA.
Everyone associated with these sports is paid, with the head coaches making several million dollars a year. But all the players have gotten in the past is the cost of tuition, room, and board. Considering the time these players put into the sport each week, these funds amount to no more than minimum wages.
Last fall, college sports were forced to permit players to benefit from the use of their names and likenesses (pictures) by making financial deals directly with corporate sponsors. There was a long haul to get that benefit. It started with the former UCLA basketball player, Ed O’Bannon, seeing his likeness from the 1995 championship team used in the EA Sports video game NCAA Basketball 09 without his permission (or pay).
In July 2009, O’Bannon, the MVP of the 1995 NCAA championship, filed a lawsuit against the NCAA and the Collegiate Licensing Company on behalf of the NCAA’s Division I football and men’s basketball players. He challenged the organization’s use of images and the likeness of former student-athletes for commercial purposes. Joining O’Bannon in this class action lawsuit were two former all-time basketball greats, Oscar Robertson and Bill Russell.
In 2014 the federal court ruled in O’Bannon’s favor, holding that the NCAA’s rules and bylaws operate as an unreasonable restraint of trade, violating antitrust law. In effect, the court ruled that the NCAA’s long-held practice of barring payments to athletes violated antitrust laws.
The NCAA kept appealing cases, maintaining that paying its athletes would violate its concept of amateurism in sports. At stake are billions of dollars in television revenues and licensing fees.
However, another strike against the NCAA occurred in June of 2021 when the U.S. Supreme Court ruled 9-0 that the NCAA could not limit education-related benefits schools may offer student-athletes even if these benefits exceed the regular scholarship funding.
In that case, Justice Kavanaugh’s concurring opinion suggests these athletes may gain further ground in the future. In a blistering opinion, Justice Kavanaugh raised questions about the other compensation rules of the NCAA, saying they raise serious questions under antitrust laws. He asserted that the NCAA’s business model would be flatly illegal in almost any other industry in America.
Following that Supreme Court decision, the NCAA relented somewhat and announced new rules that removed restrictions on college athletes entering paid endorsements and other sponsorship deals and using agents to manage their publicity. This is the name, image, and likeness (NIL) arrangement.
This new policy allows all NCAA Division I, Division II, and Division III athletes to be compensated for their NIL as of July 1, 2021, regardless of whether their state has a NIL law in place or not.
And last fall, another hammer fell. The National Labor Relations Board (NLRB) declared that athletes who earn millions for their schools are employees. Therefore, they should be allowed to unionize and negotiate over their working conditions.
The NLRB General Counsel threatened action against schools, conferences, and the NCAA if they continue to use the term “student-athlete,” saying the NCAA created the term to disguise the employment relationship with college athletes and discourage them from pursuing their rights.
The NIL provision has been very popular, with many collegiate sports stars beyond basketball land football receiving endorsement contracts, with a few getting up to seven-figure endorsements. But considering the revenue generated by basketball and football players, they are still underpaid.
From a licensing standpoint, the annual NIL value per student-athlete ranges from $1,000 – $10,000, whereas professional athletes get between $50,000 – $400,000 for the same group usage licenses.
Over the past year, an average football deal was an estimated $3,400. This year $607.4 million could go to Power Five schools, with an average annual compensation of $16,074 per athlete–woefully less than their value as generators of dollars for colleges and the NCAA.
The NCAA is holding on to its policy to not compensate players for playing as in regular professional sports. But considering Justice Kavanaugh’s opinion and the NLRB position, this restriction may be on its way out.
