NCAA Finally Moves on Compensation—But Pitfalls for Student-Athletes Abound
Trevor Lawrence, the starting quarterback for Clemson University’s football team, has 493.2 thousand followers on Instagram. He could make tens of thousands of dollars to wear a brand’s product in one of his posts. But the NCAA prohibits student-athletes like Lawrence from getting paid for the use of their name, image, or likeness (“NIL”).
That is about to end. On April 29, the NCAA’s Board of Governors announced its support for landmark rule changes (to take effect at the beginning of the 2021-2022 school year) to allow student-athletes to get paid for endorsements.
While the Board of Governors left it to the NCAA’s three divisions to flesh out the rule, it did direct them to ensure, among other things, that there would be (1) “no use of name, image and likeness for recruiting by . . . boosters” and (2) “regulation of agents and advisors”—conditions that could create significant pitfalls for student-athletes and undermine any benefit they might gain from the rule changes.
The Board of Governors says it wants to make sure that boosters won’t be able to use an endorsement deal to entice a star athlete to come play for (or remain at) their favored team. Seems simple enough. But there are at least two reasons that any attempt by the NCAA to impose limitations on boosters has the potential to make its new rules unworkable and unfair.
First, not every “booster” is Phil Knight or Bobby Lowder. A “booster” is any “representative[ ] of the institution’s athletic interests,” according to the NCAA. A season-ticket holder is a “booster” under this definition. So is a person who has “promot[ed]” university athletics; “made financial contributions” to an athletics department; helped the university recruit student-athletes; or “participated in” the athletics department (whatever that means). Not only that, once a booster, always a booster—under NCAA rules, “[o]nce an individual is identified as a ‘representative of the institution’s athletics interests,’ the person retains that identity forever.”
The NCAA’s definition of “booster” covers so many people that it threatens student-athletes’ opportunities to benefit from the NCAA’s new rules. Consider a small college town, like Lawrence, Kansas. It would be hard to find a business owner in Lawrence who hasn’t purchased season tickets for a University of Kansas sports team at some point in their life (or participated in an athletics department event or promoted the Jayhawks in any other way)—which means that, for KU student-athletes, accepting money from a local business to endorse one of its products puts them at a heightened risk for violating the NCAA’s rules. This may not have a huge effect on nationally known student-athletes—they likely will still have endorsement opportunities outside their school’s geographic area—but for the great majority of student-athletes, restricting booster involvement in NIL compensation will mean far fewer opportunities to commercialize their name, image, and likeness, without the risk of an NCAA rules violation.
Second, how is the NCAA going to determine whether a booster is paying a student-athlete for their endorsement because it makes good business sense or because they’re trying recruit them? The NCAA’s Federal and State Legislation Working Group—which the Board of Governors created to explore rule changes regarding student-athlete NIL commercialization—has suggested that the NCAA could use a “fair market value standard” (i.e., limiting compensation to fair market value). But even it has acknowledged the “difficulty in creating and maintaining such a system.” So there doesn’t appear to be any clear standard the NCAA could use—and the absence of a clear standard invites arbitrary enforcement of the rules.
Agents and Advisors
The Board of Governors didn’t provide any additional information about the sort of “regulation of agents and advisors” that it wants to see. But this wouldn’t be the first time the NCAA has sought to regulate from whom student-athletes can get advice when it comes to professional opportunities. And if history is any guide, the NCAA is likely to severely limit who can represent the interests of student-athletes with respect to their right to sell their name, image, or likeness, for commercial use.
In 2019, the NCAA announced certification requirements for agents who want to represent college basketball players entering the NBA draft. Among other things, the NCAA announced that agents would be required to pass an in-person exam at its headquarters in Indianapolis, Indiana, have been certified as an agent by the NBA Players’ Association for at least three years, and have a bachelor’s degree (a requirement the NCAA eventually loosened after major backlash), in addition to paying the NCAA $1,500 in fees. Whether it was the NCAA’s intention or not, these certification requirements greatly limited the pool of options for college men’s basketball players—and have been criticized for “exclud[ing] those agents trying to break into an industry that’s predominately white and male.”
If the NCAA imposes similarly strict requirements on who can advise student-athletes regarding their NIL opportunities, it could make it hard for student-athletes to comply with the NCAA’s rules—because there would be less people to whom they could turn for advice. And if there are too few people that the NCAA is willing to allow to represent student-athletes, it might be too costly for a lot of student-athletes to seek advice. That’s not good for the student-athletes or the NCAA.
May 4, 2020