Exploring the Costs and Benefits of the New NCAA Rules

I have previously blogged about whether college athletes should be paid for their services. They shed blood, sweat, and tears in their sports competition. Universities make millions from admissions fees to sporting events, sponsorships, deals with athletic companies like Nike, and television deals. Is it time to recognize the work of college athletes by giving them monetary compensation?

Of all the reasons to pay college athletes for their services, the one that stands out most is the colleges’ ability to trade on the use of athletes’ names, images, and likenesses (NIL) via commercial opportunities and social media. It seems unjust to make so much money that way and not compensate the athletes. How would you like it if your company used your name, image, and likeness, and made deals with other companies to trade on your talents and you were not compensated for it at all?

Well, that blog was written on April 8, 2019. A lot has changed since then. Until recently, the question of should college athletes be paid was answered by the fact that across all sports and universities, student athletes were considered amateurs and therefore prohibited from receiving monetary compensation for their athletic accomplishments. The concept of paying college athletes, however, has been anything but a clear-cut issue.

NCAA Position

The National Collegiate Athletic Association (NCAA) has developed rules about how and when college athletes can be compensated when others use their NIL for commercial purposes. As pointed out in a piece posted on iconsource.com, while universities have profited from the NIL of their student athletes for decades, it isn’t until recently that the athletes could enrich themselves.

Basically, the NIL is a term that describes the means through which college athletes are allowed to receive financial compensation. This can include autograph signings, product endorsements, social media posts, and more.

It is just as important to understand what NIL does not mean. As iconsource.com points out, “NCAA rules still prevent schools from paying players directly. This means that college coaches cannot offer money as an incentive for high school athletes to come play at their school, nor can athletes receive compensation directly from their university based upon their athletic achievements. Because the NCAA still intends to maintain its amateur sports status, paying athletes for their play on the field isn’t possible. However, NIL is the workaround for athletes to get paid without technically being considered professional athletes who make a living playing their sport.”

The Commercial Angle

No doubt you know the saying the devil is in the details. This applies to NIL payments. What we do know is that payments for athletic-related performance cannot come from the universities themselves but must come from commercial endeavors. Also, some (but not all) state laws prohibit athletes from endorsing alcohol, tobacco, or gambling products, and some (but not all) states also prohibit athletes from using their school’s logos or other copyright material in endorsements.

It is important to understand that performance on the field has a relatively small impact on NIL potential. Of course, athletes who play a more publicized sport and who perform in a way that brings them increased attention have the ability to raise their NIL ceiling and increase their market potential. Yet, at the same time, athletes who can carve out a niche—be that through social media or a dedicated local following that regards them as a hometown hero—have a sizable advantage and a large NIL potential.

Nick Saban versus Jimbo Fisher

The issue of NIL payments became national news last week when legendary Alabama football coach Nick Saban ripped a major opponent for how they are dealing with NIL. Saban claims that Texas A&M coach Jimbo Fisher has been exploiting NCAA rules and allegedly “buying” their players.

According to Saban, “[Texas] A&M bought every player on their team. Made a deal for name, image and likeness…. We didn’t buy one player. All right? But I don’t know if we’re going to be able to sustain that in the future, because more and more people are doing it.” 

Saban also said, “I told our players when this whole thing started to get agents, get representation, so you create opportunities for yourself. Our players last year created $3 million worth of opportunities for themselves in doing it the right way. I have no problem with that, and nobody had a problem on our team with that because the guys that got the money earned it.”

Saban’s body slam spurred Jimbo Fisher to call a news conference last Thursday in which he denied Saban’s charges, called him a “narcissist” and implied Saban had committed violations in the past. I won’t go over these, but you can read all about in a Wall Street Journal article.

It wasn't just Texas A&M that Saban criticized. He also claims that legendary NFL player Deion Sanders, who coaches at Jackson State University, managed to land the No. 1 overall recruit in the country, in part by virtue of the NIL opportunities. Saban said, “We have a rule right now that said you cannot use name, image and likeness to entice a player to come to your school. Hell, read about it in the paper!” I mean, Jackson State paid a guy a million dollars last year, that was a really good Division I player, to come to school. It was in the paper and they bragged about it. Nobody did anything about it.”

It sounds to me like Saban is resentful of what Sanders was able to do. In fact, payments for NIL might level the playing field between the big guys and the smaller schools.

In should be noted that Alabama is one of the most successful programs in the country in terms of getting its players paid through NIL opportunities.

The Ethics Angle

I don’t agree with Saban’s point of view. For me it is a matter of whether college athletes who risk injury to life and limb should be able to gain monetary compensation when their NIL is used by businesses for profit-making endeavors. I believe that the athletes have an ethical right to such payments.

It is a fact that once the NCAA backed off from its long-standing rules against paying college athletes, it was just a matter of time before questionable payments would be made. The new rule opens pandora’s box to increasingly more complicated arrangements within which college athletes can monetize their NIL. I am concerned that it brings into play the proverbial “ethical slippery slope.” It’s just a matter of time before businesses find a workaround and pay high school athletes for their NIL, especially the uber-stars in their respective sports.

Is it ethical for these student-athletes to cash in on their NIL, even before they throw one pass, catch one football, run down the field, or play defense? Generally, ‘yes,’ but I do have some reservations.

To be sure, there are a lot of unanswered questions about paying college athletes. There’s no question there would be a disparity between what student-athletes could earn at the big sports schools versus smaller ones. Does that mean top athletes would be less likely to go to the smaller schools? If so, how might that affect their competitiveness?

Doubters say collegiate sports are corrupted by paying student athletes and such a practice turns amateurs into professionals while attending college. That may be true but collegiate athletics in sports like football and basketball is big business today with many colleges getting wealthy off endorsement and television deals. They “earn” that money because of the NIL of top athletes. It only seems fair the athletes share in the largesse.

Finally, these athletes might suffer injuries that put their potential careers with professional teams at risk, and harm their ability to have a successful career. Moreover, not paying them smacks of slave labor, especially because the NCAA generated record revenues of US$1.16 billion for the 2021 fiscal year ending 31st August, marking an increase from US$519 million in 2020. 

Blog posted by Dr. Steven Mintz, The Ethics Sage, on May 23, 2022. You can sign up for Steve’s newsletter and learn more about his activities on his website  (https://www.stevenmintzethics.com/) and by following him on Facebook at: https://www.facebook.com/StevenMintzEthics and on Twitter at: https://twitter.com/ethicssage.

Steve has written a book on being a more ethical person, Beyond Happiness and Meaning: Transforming Your Life Through Ethical Behavior. It is available at Amazon or on his website.