SHOW ME THE MONEY: Policy Options for Compensating NCAA Student-Athletes for Their NIL Rights

Abstract

Since its inception 115 years ago, the National Collegiate Athletic Association (NCAA) has faced challenges regarding its requirement that all student-athletes maintain their amateur status. Currently, the NCAA Bylaws state that if a student-athlete is paid or receives a salary, directly or indirectly, for their athletic skill, they will lose their amateur status and be ruled ineligible to compete at the collegiate level. In the past ten years, this standard has been at the root of an ongoing onslaught of negative press that overwhelms the NCAA. The American public is generally appalled by the NCAA’s amateur ruling because it lies at the bedrock of an inherently unfair system. College sports are a $14 billion a year industry in the U.S., but the student-athletes, without whom this industry would not exist, have never seen a penny of the massive revenues they produce. The NCAA held firm in its belief that student-athletes should not be paid until October 2019. Just a month earlier, California passed the Fair Pay to Play Act into law. It declares that all postsecondary educational institutions must allow student-athletes to be compensated for the use of their name, image, and likenesses (NILs) beginning on January 1, 2023. Since then, 33 other states have introduced legislation that is designed to permit student-athletes to profit from their NILs. In March 2020, Colorado became the second state to see its bill become a law, and Florida is expected to do the same before the end of the year. In its quest to end the modern amateurism debate, this thesis examines over 20 different policy proposals for the payment of NCAA student-athletes. These models come from legislators, lawyers, economists, non-profit groups, sports journalists, and former university administrators. The NCAA favors a national solution to the problem of compensating student-athletes, not a patchwork of laws that govern the matter variably from state to state. However, due to election year politics and the COVID-19 pandemic, it is unlikely that Congress will recommend a policy before the NCAA votes on how it will govern student-athletes’ NIL rights at its convention in January 2021. Following a thorough analysis of those plans already proposed, this thesis recommends a unique policy for the compensation of NCAA student-athletes. First, it bars colleges and universities from upholding any rule that prevents student participating in intercollegiate athletics from earning compensation resulting from the use of their NIL. Second, it allows student-athletes to hire agents to help negotiate NIL agreements, or contracts between a student-athlete and a third-party who wishes to use their NIL for commercial purposes. It is important to note that under this policy, student-athletes may only be paid for commercial, non-game related purposes like endorsements, product licensing, personal appearances, and providing autographs. Third, this policy recommends the creation of an independent NIL Commission that will operate apart from the NCAA and set and implement national standards for NIL agreements. Among other things, the NIL Commission shall mandate that 75% of all profits earned by student-athletes be placed into a trust fund accessible to them only upon graduation or the termination of their collegiate eligibility. The policy recommended here addresses only student-athlete compensation and is designed to meet the goal of being approved by Congress. This thesis also presents the results of an original survey of student-athletes at Princeton University, which found they would most prefer a simple plan, like the Olympic model or California’s Fair Pay to Play Act, to govern their NIL rights.