The first year of the athlete pay era in college sports has evolved into almost everything the NCAA didn’t want when it gave the go-ahead last summer.
What was envisioned as a way for college athletes to earn pocket money based on their stardom has turned into bidding wars for top recruits and transfers who can command millions for their services. State laws have been passed or overturned, and in some cases, funding has come from deep-pocketed donors and alumni who have engaged in recruiting wars.
The current frenzy has raised serious concerns about recruitment practices and the competitive balance and, in turn, questions about where NIL compensation – short for name, image and likeness – goes from here. Will Congress get involved? Will schools play a key role?
“The way this financial situation blows up in schools, they’re going to compete with each other,” said Michael LeRoy, a professor of labor law at the University of Illinois. “They can’t all win by these rules.”
Some would argue that there are no rules, or that the rules set by the NCAA and in state laws have no teeth and are treated more as suggestions.
“When you see Nick Saban losing his temper over recruiting, it’s a sure sign that damage is being done to the highest levels of NCAA athletic competition,” LeRoy said, referring to comments from the Alabama football coach in May alleging that Texas A&M “bought every player on their team.
The NCAA’s draft NIL policy states that there should be no payment for play, no recruiting inducements, and that athletes should provide service in exchange for salary. With schools themselves left out of the loop in turnover and bargaining, so-called recall collectives have sprung up to provide income opportunities – and, critics say, recruitment incentives.
Basketball player Nijel Pack made one of the first big hits in April. When his transfer from Kansas State to Miami was announced, it was made public that he would get a two-year, $800,000 contract with a medical technology company that came with a car. Pack is already featured in an advertisement.
There have been media reports of football and basketball rookies and transfers being promised millions of dollars in NULL deals – all against the rules because they didn’t sign up.
The NCAA Division I Board of Governors warned in May that law enforcement personnel would investigate and take action against the “most outrageous violations” as schools are penalized for improper conduct by boosters.
Dionne Koller, a professor and director of the Center for Sport and the Law at the University of Baltimore Law School, said she wasn’t surprised with how NIL turned out. The market, she said, was at a boiling point.
“Because we’ve now let the genie out of the bottle,” she said, “that’s what happens.”
Barring congressional action to address NIL issues, some wonder whether athletes will be declared employees of their schools and have NIL issues dealt with through collective bargaining.
Supporters say their position is bolstered by last fall’s memorandum from National Labor Relations Board General Counsel Jennifer Abruzzo, who wrote that varsity athletes fit the definition of “employees” under federal labor law: someone who provides services to an institution and is subject to its control.
Koller said she agrees there is a strong legal basis for calling out athletes’ employees.
“Whether we actually get to the stage of collective bargaining, I’m still in wait-and-see mode because it’s something that can be changed by law,” she said. “NLR law can be changed to say college athletes cannot be considered employees. Whether Congress does that is a political issue and something we need to keep in mind.
LeRoy said there was nothing stopping public schools from adopting collective bargaining or Congress from passing industry-specific collective bargaining legislation, just as it did in 1926 with the railroads and in 1936 with the airlines.
Marc Edelman, a law professor at Baruch College in New York, said Abruzzo’s memo paved the way for unionization. The NCAA, on the losing side of the court cases in the antitrust lawsuits, has long opposed unionization and its newly redrawn constitution makes it clear that athletes cannot be paid by their schools to play sports.
It would need to be determined whether only athletes from revenue-generating sports would be included. There would also be Title IX implications for how the interests of men and women are addressed.
LeRoy, who wrote the 2014 book “Collective Bargaining in Sports and Entertainment: Professional Skills and Business Strategies,” now says athletes can earn NIL money by maintaining some semblance of competitive balance should be the impetus for unionization.
Without it, LeRoy said, the top five to 10 programs will recruit elite, money-driven recruits and further separate themselves from other programs.
“No league can win if you don’t have some sort of competitive balance in your rules system,” he said. “Rule #1 for a league is to have anti-competitive rules in order to be competitive. That is, they have to put constraints on a labor market in order to distribute talent and make the league interesting from the point of view of the fans.
“The way this is changing rapidly, it’s going to accentuate the difference between the haves and the have-nots. Personally, I don’t see 65 Power Five teams coming together in the same group under this current system.
This topic is among the many topics of discussion as the NCAA’s three divisions restructure, a process that gained momentum last year.
LeRoy sees conferences as the “employers” or “management” in collective bargaining and the main areas of bargaining are revenue sharing, a salary cap and creative ways to deal with NIL. He offered a few possibilities: pending NIL agreements requiring athletes to stay in a school for three or four years before collecting their money, or setting an annual limit per team on NIL earnings.
Tom McMillen, president and CEO of the LEAD1 association, which represents high-level athletic directors, suggests a less drastic approach. He said athletic departments should oversee NIL activities to ensure compliance.
McMillen said expanded group licensing involving schools and all athletes would distribute NIL money more evenly. Since schools that receive federal aid must comply with Title IX, both male and female athletes would have an equal chance of cashing in.
“The athletic department already arranges internships, jobs, academic tutors — they play a super role in the lives of these kids,” McMillen said. “You could have a kid-focused licensing division run by the athletic department. It’s going to be compliant and they’re going to do it the right way.
Another option, McMillen said, would be a compromise with unionization where Congress would put in place a new social contract for basketball and soccer players that might involve some form of bargaining, but not collective bargaining like the provided by federal law.
“Our DAs are very concerned, 97%, about going full throttle to the professional model,” he said. “They would like to see college sports preserved and it needs to be preserved, obviously, so that if coaches are making millions of dollars, student-athletes have to have a chance to make more.”
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