Student athlete compensation

Last updated

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] The Supreme Court's decision in NCAA v. Alston (2021) allows for non-scholarship earned income across every division. [2]

Contents

History

The NCAA had 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 had begun to fade as the push for student-athlete compensation grew 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] In September 2019, 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 used to touch on this topic, and the only federal regulation permitting college students to accept compensation was 34 CFR § 675.16, which related to work-study programs. [9]

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]

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. [10] In July 2023, multiple bills were introduced by members of Congress to regulate NIL. [11] [12] [13]

In May 2024, NCAA settled the House v. NCAA class action lawsuit for $2.8 billion. The main plaintiffs, Grant House and Sedona Prince, sought an injunction to force the NCAA and affiliated athletic conferences to lift restrictions on revenue sharing from broadcast rights. The plaintiffs also sought damages related to their inability to use their name, image, and likeness. This lawsuit highlights changes in the legal approach to the NCAA's amateurism defense, which had been central to its stance on student-athlete compensation but was nearly eliminated by the NCAA v. Alston decision. [14]

Criticism

One area of concern from recent NIL bills are the tax implications for student athletes. The NCAA maintains tax-exempt status by claiming its purpose in "fostering amateur athletics." [15] NCAA universities are typically exempt from federal income tax because they are classified as charitable organizations. [16] If the NCAA were to frequently enter contracts with student athletes and compensate them it could be at risk to losing this status. One impact on student athletes would be that their athletic scholarships would be subject to income tax. Additionally, student athletes would have to navigate varying state taxes. Some critics argue that because of these complications, student athlete compensation wouldn't be beneficial overall. [16]

Another protest about student athlete compensation is that the NIL landscape will take away from the amateurism in the NCAA and commercialize college sports. Top NIL earners such as Livvy Dunne, an LSU gymnast with over one million followers on Instagram and TikTok, are making several million dollars a year. [17] There are worries that this type of income will blur the line between college and professional sports and remove the unique appeal and camaraderie of college sports. [18] This has caused concerns about the implications on college recruiting due to the lack of national standardization for NIL legislation. [17] 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. [19] States have also followed suit by enacting similar laws. [20] To date, 29 states have some sort of NIL legislation in place since the Alston interim policy was put into place. [21] For example, Illinois Public Law 102-0042 permits athletes to receive market-value compensation for the use of their name, image, and likeness. [22] An example of the differing state policies might be: if a recruit is comparing two schools with similar athletic and education opportunities but one school is in state that has a Fair Pay to Play Act and the other is not, the school in the state that allows student athlete compensation receives a significant recruiting advantage.

High school athletes

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, [23] followed by NIL deals signed by basketball prospects Bronny James, Dajuan Wagner Jr., and JuJu Watkins in October 2022. [24] 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, [25] leading to a local apparel company signing two Oregon Ducks basketball commits on October 21 in the state's first high-school NIL deals. [26] 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. [27]

Life Center Academy basketball prospect Kiyomi McMiller signed Nike label Jordan Brand's first high-school NIL deal in February 2023, [28] and in July 2023 Lake Oswego High School senior Mia Brahe-Pedersen signed Nike's first high-school track-and-field NIL deal. [29]

Media involvement

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. [30] For instance, CBS paid around $800 million for broadcasting rights to a three-week 2014 men's basketball tournament. [30] Because of the revenue and positive attention players bring to their colleges, there is a high demand to be fairly compensated. [30] However, the NCAA forbids players from accepting external forms of compensation, such as payment or improved grades. [30] Instead, the NCAA traditionally compensates players through athletic scholarships that cover the cost of tuition and other academic expenses. [30]

Collectives

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. [31] Most Division I universities now have collectives which can provide funds for selected athletes or a full team; [32] [33] 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. [34] [35]

See also

Related Research Articles

<span class="mw-page-title-main">National Collegiate Athletic Association</span> North American athletic organization

The National Collegiate Athletic Association (NCAA) is a nonprofit organization that regulates student athletics among about 1,100 schools in the United States, and one in Canada. It also organizes the athletic programs of colleges and helps over 500,000 college student athletes who compete annually in college sports. The headquarters is located in Indianapolis, Indiana.

<span class="mw-page-title-main">National Association of Intercollegiate Athletics</span> North American college athletics association

The National Association of Intercollegiate Athletics (NAIA) established in 1940, is a college athletics association for colleges and universities in North America. Most colleges and universities in the NAIA offer athletic scholarships to their student athletes. Around $1.3 billion in athletic scholarship financial aid is awarded to student athletes annually.

<span class="mw-page-title-main">College athletics in the United States</span> Component of American higher education

College athletics in the United States or college sports in the United States refers primarily to sports and athletic training and competition organized and funded by institutions of tertiary education in a two-tiered system.

EA Sports College Football is an American football video game series developed by EA Sports in which players control and compete against current Division I FBS college teams. It served as a college football counterpart to the Madden NFL series. The series began in 1993 with the release of Bill Walsh College Football. EA eventually acquired the licensing rights to the NCAA name and officially rechristened the series with the release of NCAA Football 98.

<span class="mw-page-title-main">Ed O'Bannon</span> American basketball player (born 1972)

Edward Charles O'Bannon Jr. is an American former professional basketball player in the National Basketball Association (NBA). He was a power forward for the UCLA Bruins on their 1995 NCAA championship team. He was selected by the New Jersey Nets with the ninth overall pick of the 1995 NBA draft. After two seasons in the NBA, he continued his professional career for another eight years, mainly playing in Europe.

Jeffrey L. Kessler is an American attorney who is a partner and co-executive chairman of Winston & Strawn. He is also co-chair of the firm's antitrust/competition practice and is a member of the executive committee. He is one of the country's leading sports lawyers.

<i>OBannon v. NCAA</i> 2015 US federal appeals court case

O'Bannon v. NCAA, 802 F.3d 1049, was an antitrust class action lawsuit filed against the National Collegiate Athletic Association (NCAA). The lawsuit, which former UCLA basketball player Ed O'Bannon filed on behalf of the NCAA's Division I football and men's basketball players, challenged the organization's use of the images and the likenesses of its former student athletes for commercial purposes. The suit argued that upon graduation, a former student athlete should become entitled to financial compensation for NCAA's commercial uses of their image. The NCAA maintained that paying its athletes would be a violation of its concept of amateurism in sports. At stake are "billions of dollars in television revenues and licensing fees."

The definition of amateurism within the context of collegiate sports has evolved since it was first pronounced by the NCAA upon its inception in 1906. In its early stages, changes in the NCAA's core beliefs in what a student-athlete should be rewarded and allowed to accept financially for their athletic talents had its effects on the definition of amateurism. Over the course of the 20th and early 21st century, regulatory changes, court claims, and the beliefs of NCAA authority about student-athlete compensation further developed what an amateur collegiate athlete is entitled to receive. This evolution is what impacted the evolving logistics of the NCAA Bylaw 12, which explains the current definition of amateurism and what it grants or restricts a collegiate athlete to be able to receive as compensation for their participation. These guidelines have been described to both benefit and unjustifiably limit the student-athlete and the success of institutions’ athletic performance. This debate has been a strong driver in court claims against the NCAA and the mainstream controversy about what student-athletes should have the right to receive financially.

D'Eriq King is an American football coach and former quarterback who is the quarterbacks coach at Southern Methodist University. He played college football at the University of Houston before transferring to the University of Miami where he played quarterback.

<span class="mw-page-title-main">Jon Echols</span> American politician

Jon Echols is an American politician who served in the Oklahoma House of Representatives representing the 90th district from 2012 to 2024. He is the Majority Floor Leader.

<span class="mw-page-title-main">Paige Bueckers</span> American basketball player (born 2001)

Paige Madison Bueckers is an American college basketball player for the UConn Huskies of the Big East Conference.

The Fair Pay to Play Act, originally known as California Senate Bill 206, is a California statute that will allow collegiate athletes to acquire endorsements and sponsorships while still maintaining athletic eligibility. The bill would affect college athletes in California's public universities and colleges.

<span class="mw-page-title-main">Rose Zhang</span> American professional golfer

Rose Zhang is an American professional golfer. She won the 2020 U.S. Women's Amateur, and both the 2022 and 2023 NCAA Division I Championships, becoming the first woman to win the individual title twice. She competed in the 2019 U.S. Women's Open and was on the gold medal team at the 2019 Pan American Games. Less than two weeks after turning pro, she became the first player to win in her professional debut on the LPGA Tour since 1951.

National Collegiate Athletic Association v. Alston, 594 U.S. ___ (2021), was a landmark United States Supreme Court case concerning the compensation of collegiate athletes within the National Collegiate Athletic Association (NCAA). It followed from a previous case, O'Bannon v. NCAA, in which it was found that the NCAA was profiting from the namesake and likenesses of college athletes. The case dealt with the NCAA's restrictions on providing college athletes with non-cash compensation for academic-related purposes, such as computers and internships, which the NCAA maintained was to prevent the appearance that the student athletes were being paid to play or treated as professional athletes. Lower courts had ruled that these restrictions were in violation of antitrust law, which the Supreme Court affirmed in a unanimous ruling in June 2021.

<span class="mw-page-title-main">Haley Cavinder</span> American social media personality (born 2001)

Haley Cavinder is an American social media personality and college basketball player for the Miami Hurricanes of the Atlantic Coast Conference. Prior to Miami, she played for the Fresno State Bulldogs. Cavinder was an All-Mountain West Conference (MW) selection in each of her three seasons at Fresno State, and was named MW Player of the Year in her sophomore season. As a junior, she set the NCAA Division I single-season free throw percentage record before transferring to Miami.

<span class="mw-page-title-main">Hanna Cavinder</span> American social media personality and former basketball player (born 2001)

Hanna Cavinder is an American social media personality and college basketball player who plays for the Miami Hurricanes of the Atlantic Coast Conference (ACC). She began her college career at Fresno State, where she was a two-time All-Mountain West Conference (MWC) selection and a MWC All-Freshman Team selection. Prior to collegiate basketball she was the Arizona 5A Offensive Player of the Year as a senior for Gilbert High School where she played with her fraternal twin, Haley, and elder sister Brandi.

Jaden Rashada is an American football quarterback for the Georgia Bulldogs. He previously played for the Arizona State Sun Devils.

<span class="mw-page-title-main">Reilyn Turner</span> American soccer player (born 2002)

Reilyn Turner is an American professional soccer forward who plays for Portland Thorns FC of the National Women's Soccer League (NWSL). She played college soccer for UCLA Bruins before being picked sixth overall in the 2024 NWSL Draft.

<i>EA Sports College Football 25</i> 2024 video game

EA Sports College Football 25 is a video game based on college football, developed by EA Orlando and published by EA Sports. It is a part of the EA Sports College Football game series and the first such game in eleven years since NCAA Football 14 in 2013.

Mia Mastrov is an American former college basketball player for the California Golden Bears of the Pac-12 Conference. She was one of the NCAA's highest-paid athletes for her name, image, and likeness (NIL) during her college career.

References

  1. 1 2 3 4 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. 1 2 3 4 5 6 "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. ↑ 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.
  11. ↑ "Senators offer latest bill aimed at college sports, NIL reform" ESPN. Retrieved 2023-07-26.
  12. ↑ "Joe Manchin and Tommy Tuberville introduce bill on name, image and likeness rules for college sports" NBC News. Retrieved 2023-07-26.
  13. ↑ "New NIL bill pushes Athlete's Rights, including group licensing" Sportico. Retrieved 2023-07-26.
  14. ↑ "The NCAA has agreed to settle a major lawsuit. It still faces a number of challenges". AP News. July 26, 2024. Retrieved October 17, 2024.
  15. ↑ "Legislative Services Database - LSDBi". web3.ncaa.org. Retrieved July 27, 2024.
  16. 1 2 Bunner, Brian P. (June 16, 2021). "NIL Bills—An Examination of the Implications of Compensating College Athletes Under Name, Image, and Likeness Legislation". Pittsburgh Tax Review. 18 (2). doi: 10.5195/taxreview.2021.136 . ISSN   1932-1996.
  17. 1 2 Palmieri, Christopher (January 1, 2021). "The Billion Dollar Industry That Has Never Paid Its Money-Makers: The NCAA's Attempt at Compensation through Names, Images and Likeness". Touro Law Review. 37 (3). ISSN   8756-7326.
  18. ↑ Cole, Jens (2019). "A Critique of the NCAA – A Comparative Analysis of US Federal Law and California State Law in Criticism of NCAA Rules". SSRN Electronic Journal. doi:10.2139/ssrn.3463503. ISSN   1556-5068.
  19. ↑ "Interim NIL Policy" (PDF). Archived (PDF) from the original on September 26, 2021. Retrieved October 8, 2021.
  20. ↑ 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.
  21. ↑ Murray, Laura C. (March 18, 2023). "The New Frontier of NIL Legislation". Houston Law Review. 60 (3): 757.
  22. ↑ "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.
  23. ↑ 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.
  24. ↑ "Bronny James, four others sign NIL deals with Nike". Fox Sports . October 10, 2022. Retrieved August 9, 2023.
  25. ↑ Dieckhoff, Andy (October 10, 2022). "OSAA approves changes to NIL rules for high school student-athletes". Portland Tribune . Retrieved August 9, 2023.
  26. ↑ 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.
  27. ↑ 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.
  28. ↑ "Top hoops prospect Kiyomi McMiller signs NIL deal with Jordan Brand". ESPN . February 22, 2023. Retrieved August 9, 2023.
  29. ↑ 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.
  30. 1 2 3 4 5 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.
  31. ↑ "Name, Image, and Likeness (NIL) Collectives". Internal Revenue Service.
  32. ↑ "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.
  33. ↑ Furlong, Josh. "Utes NIL collective expands leased vehicles offer to basketball, gymnastics athletes". www.ksl.com. KSL. Retrieved January 1, 2024.
  34. ↑ "Colleges getting cozy with NIL collectives worries Title IX activists". Dallas News. September 18, 2023. Retrieved January 1, 2024.
  35. ↑ Samaha, Albert; Giambalvo, Emily; Dougherty, Jesse; Galocha, Artur (October 21, 2024). "The Hidden NIL Economy of College Sports". The Washington Post. Retrieved November 2, 2024.

Further reading

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.