On Wednesday, the sports world awoke to breathless reports that the NCAA Board of Governors had finally opened the floodgates and would allow college athletes to monetize their name, image, and likeness rights. Instead, Wednesday’s announcement from the NCAA was ultimately all smoke and no fire. The hype was fueled by an NCAA PR call for the media, in which they talked a good game but then left all the less-than-rosy details for a thirty-one-page document that few seem to have read in detail.
At the PCL, we have enough institutional experience to know that nothing the NCAA claims can be taken at face value. The place to look for the devilish details is in the actual report released, which outlined the following:
The Model Won’t Change: “No desire for changes to NIL rules that would undermine the Association’s model of amateur intercollegiate athletics.” The bold is not added for emphasis, that’s how it appears on Page 6 of the report. In plain language, the NCAA made it clear that no rules would be recommended that “would undermine, or fundamentally change, the NCAA’s overall model of amateur intercollegiate athletics.” Allowing athletes “uncapped” third-party payments cannot be squared with maintaining that model, and so the only logical conclusion is those uncapped payments won’t actually come to pass.
Congressional Protection Needed: “The Presidential Subcommittee on Congressional Action has identified distinct legal impediments to the Association’s ability to modernize its rules related to NIL and to maintain the model of intercollegiate athletics generally. Therefore, the subcommittee has put forward a number of recommendations for Board consideration in engaging with Congress, including to seek preemption of state NIL laws.” In other words, some of the recommendations are likely illegal and will therefore require protection from Congress in the form of an antitrust exemption. And by “some” they mean all of the recommendations related to payment to athletes for their athletic NIL value. That is, all of the good stuff.
Congressional Intervention Also Needed: The recommendations do not go as far as the state NIL laws that have been proposed and/or passed, so Congress is needed to strike those down while also granting an antitrust exemption.
Tethered to Educational Expenses or Incidental to Participation: These legal terms of art were created in O’Bannon v. NCAA, and have a great deal of legal significance in ensuring the continuation of an amateurism model. Aware of this, one of the “guardrails” emphasized in the report was, “To assure that any proposed legislative solutions kept in mind that student-athlete benefits must be tethered to educational expenses or incidental to participation.” Tying endorsements to education with an exception for activities incidental to athletic participation is incredibly limiting on the value of any such agreement for an athlete. For example, what is the educational tether for appearing in a Coca-Cola or Pepsi commercial?
Potential Areas of Conflict: “In addition, an institution would have discretion to prohibit a student-athlete’s involvement in particular name, image, and likeness activities, as defined by the institution (e.g., areas that conflict with institutional values, conflicts with institutional arrangements).”
No Inducements and Limiting Value: “Protecting the recruiting environment and prohibiting inducements to select, remain at or transfer to a specific institution.” For those that don’t know, prior to making a recruiting decision is often when an athlete has the most value and leverage. Taking away that window of opportunity severely limits their earning potential.
No Group Licensing: Don’t expect a college football or basketball video game any time soon. In discussing the player’s associations that represent the athlete bargaining units in professional leagues and the Olympics, the report noted that “the absence of similar legal structures in intercollegiate athletics greatly complicates the NCAA’s ability to pursue a group licensing approach similar to the modules used in the professional context.” For the vast majority of college athletes, group licensing would be the primary source of any revenues related to name, image, and likeness.
Potentially No Shoe or Apparel Deals: Tucked away on Page 31, the report asks the NCAA to consider “[w]hether certain categories of third-party businesses (e.g., athletics shoe and apparel companies) should be precluded from, or have limited participation in, the newly permitted activities, due to their history of encouraging or facilitating recruiting and other rules infractions.” For elite basketball athletes, this would be cutting off access to six-figure endorsement deals, even seven-figures in certain cases. This is also the single most valuable category for athlete endorsement agreements.
Ultimately, nothing changed Wednesday, regardless of what the headlines say. And the chance of things changing when the next NCAA dog and pony shows comes to town is slim as well, given they’ve told the world they need Congress to grant them antitrust immunity or else no athletic NIL rights. Like all of amateurism, this proposal is a con. Don’t fall for it.