Part 1 by Rob Warren
The NCAA is a billion dollar entity. The Final Four, the College Football playoff and large contracts with networks to carry college football make lots of folks rich, mostly University Presidents, and College Coaches that tend to be the highest paid state employees in most states.
Many young people have been able to benefit from a free education due to their athletic prowess, and that’s taken a large financial burden off of their parents and loved ones, and provided opportunities for many who may not have been able to attend college otherwise.
For many years this seemed like a fair trade. A free education in exchange for playing sports at your college or university.
This was a fair exchange before CBS, Disney/ABC/ESPN, and FOX started paying huge rights fees to show college basketball. This was pretty even steven before the Fab Five, a group of five basketball sensations that captured the imagination of many during their reign as college basketball gods in the early 90’s saw their jerseys being sold and they weren’t seeing a dime of the profit.
A free education was enough before the NCAA started using players likenesses in sports video games and making millions of dollars from appearing in bowl games and tournaments and getting massive tv exposure.
There have been arguments about how to fairly compensate players for many years. This isn’t a new topic of conversation.
Many players would receive $500 handshakes from boosters. Some would go to a university and get things in exchange like jobs for their parents or cars or cash.
Those were obvious NCAA violations, but there were times when players would get punished for receiving groceries or small amounts of money to get by while in college. There have been tales of athletes starving on campus even while their school that they were playing for was reaping big benefits and their coaches were clocking millions of dollars and living in big lavish homes.
The question has been how do we fairly compensate these players and give them a piece of the pie without ruining the competitive balance of college sports. Where things get complicated is that 2 or 3 major events and 2 sports basically fund the entire college sports universe.
Football and Basketball, including the conference champion games, and tournaments, and the NCAA tournament, and College Football Playoff are a big piece of the money puzzle. That pays for not just football and basketball but for a lot of baseball, and softball, and swimming and track programs as well.
If you took your football money and paid your players, you wouldn’t have enough money to field non revenue generating sports that give opportunities for a lot of athletes to attend school. The other question would be how much would you pay players and exactly who would get paid.
Would you only pay star players? Would you pay only starters? Would there be a salary cap? If Alabama, Clemson and Ohio State have endless funds to pay their players is that fair to other schools who can’t offer big salaries to their stars?
The remedy to this was to let players use their own names and images to create financial opportunities for themselves. Several states have now passed laws with California being one of the first, that will allow players to sign autographs, get endorsement deals, and leverage their social media for money.
Where things get murky is how will schools not in states with the new law passed enforce these new rules. Will players only flood schools with the NIL laws in place or is there a way to even the playing field.
For every Peyton Manning and Calvin Jones who were great college players, that go on to make millions of dollars and become great long time wealthy pros, there are players like Tim Tebow, Eric Crouch, and Gino Toretta, that are great in college and don’t make it in the pros.
This rule might benefit guys like that the most. Being a two time National Champion at the college level like Tebow should pay some dividends even if he doesn’t become a great pro, which he never really did.
This will be the first of many stories we will be doing, chronicling how athletes will leverage their names and likenesses as these rules are just starting to become effective. There will be questions about how things will work?
Will these rules disrupt the competitive balance and certain schools will attract bigger endorsements cash outs due a school’s location or popularity or because of the visibility due to their conference’s tv deal?
Will this keep normally one and done college basketball players in school?
The possibilities are exciting, the rules are a little muddled until a Federal law is put in place to govern all American schools in the NCAA. But this I believe will be a great thing for the athlete.
Stay tuned to this space for part 2 of this story. As we watch the first year of this new world of college sports economics unfold.
