NIL and “Other” Forms of Athlete Compensation: SCOTUS Enters the Fray
The United States Supreme Court has added another element to the evolution of college athletics from a primarily amateur endeavor to a mainly professional model. The problem with the college sports model is that it doesn’t make any sense. Some parts of the systems operate in the free market (coaches), some operate as partnerships (conferences), and others operate under severe constraints (players). It was an illogical and unstable system. The basics of the decision: The Supreme Court on Monday unanimously sided with a group of former college athletes, ruling that the National Collegiate Athletic Association’s tight limits on education-related compensation — things like computers and graduate scholarships — violates antitrust law. The nation’s high court, in an opinion by Justice Neil Gorsuch, upheld lower court rulings that said the NCAA illegally limited schools on competing for talent by offering better education-related benefits, such as pay for tutoring and science equipment. The court rejected the NCAA’s argument that offering compensation through education-related benefits would alienate fans who appreciate players’ amateur status. The ruling means that the NCAA cannot prevent schools from offering compensation beyond tuition costs, such as scholarships for graduate school or study-abroad programs, for student athletes. The “problem” with the NCAAs approach is that as soon as constraints are relaxed, there is no logic to keeping any of the rules. The “unintended” consequences of NIL opportunities and schools compensating athletes may be dramatic. 1. Will the rich get richer (across schools)? What prevents the more powerful (highest revenue) college brands from cornering the market on talent through better direct compensation and NIL opportunities? 2. Will the rich get richer (within schools)? Will the football players receive more lucrative housing and other compensation? The football program generates the revenue so they have a claim on higher compensation. 3. What about Title 9? But what about Title 9’s promise of equal opportunities? Does this mean that schools will need to shrink men’s programs to maintain some “fairness” across the men’s and women’s athletic programs? 4. How about a negotiated solution? The pros have salary caps and other methods for balancing fairness and competitive balance. Can the colleges negotiate something that works for athletes and schools? With whom would they negotiate? A college athlete’s union? A college football player’s union? And in the background of all of this are NIL rights and relaxed transfer rules. College sports are going to change. Dramatically. We continue this conversation in the most recent edition of our podcast. Stream it on your platform of choice here.