*The views expressed in this article do not represent the views of Santa Clara University.
Credit: Kyle Calzia | Santa Clara Athletics
This past July marks the one-year anniversary of the unanimous Supreme Court decision, ruling NCAA amateurism a relegated ideology of the past. The Supreme Court affirmed this ruling 9-0 claiming the NCAA had violated antitrust laws. Justice Kavanaugh wrote:
The NCAA is not above the law. The NCAA couches its arguments for not paying student athletes in innocuous labels. But the labels cannot disguise the reality: The NCAA's business model would be flatly illegal in almost any other industry in America.
With this historic decision, college athletes are now being financially rewarded for their name, image, and likeness (NIL) as it relates to their sport. Despite the decades of pushback and extensive legal fees from the NCAA, it has honored the ruling despite concerns of a potential “Pay for Play” culture. As the first year of NIL deals comes to an end, sports analytics, agents, brands, professionals, parents, and athletes relish in the future of college sports.
Judicial History
The NCAA, for much of its existence, has promoted the purity of amateurism and prohibited student athletes from getting paid for their talents on the field. This firm prohibition not only limited student athletes from career success, but also brought forth a flurry of lawsuits towards the NCAA to overturn its long standing ideology. On June 15, 2020, current Oregon women's basketball player, Sedona Prince, and Arizona State men’s swimmer, Grant House, filed a class action lawsuit in the Northern District of California on behalf of “all current and former student-athletes who compete on, or competed on, an NCAA Division I athletic team at any time four years prior to the filing [6/15/20] to final judgment in 2022.” The class action against the NCAA “challenged [the] name, image, and likeness restrictions” placed on student athletes in the Power Five conferences. In the actual suit, Prince, House and the class members, sought an injunction claiming that the NCAA and its co-conspirators participated in:
(a) unreasonable restraint of trade as a result of restraining trade in the marketplace by artificially depressing, fixing, maintaining, and/or stabilizing prices paid to the members of the class; and (b) unreasonable restraint of trade by effectuating a horizontal group boycott of and refusing to deal with the members of the class by preventing members of the class from using their NIL for compensation under § 1 of the Sherman Act.
The Sherman Act, an antitrust law, essentially prohibits “every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize.” In the dispute between Prince, House and the NCAA, the NCAA restricted the athletes from profiting from use of their name, image, and likeness, which therefore, violated the Sherman Act by restricting trade. If the athletes were allowed to license and sell their NIL, they could have demanded more compensation for the use of their name, image, and likeness. Rather, due to the NCAA’s actions in this case, the market has since been depressed and the demand for athlete compensation has been in decline. Although there is no official holding, “in April [2020], the NCAA announced that it would move to ‘modernize’ name, image, and likeness rules for student-athletes by 2020-21,” so they can receive compensation. Prince and House have since been trailblazers and will continue to serve as an example of how NCAA amateurism affected student-athletes prior to the NCAA v. Alston holding.
College football generates over $4 billion in revenue each year. In 2021, the University of Alabama quarterback, Mac Jones, won the National Championship. He received room, board, and tuition, amounting to around $30,000 in return for on field performance. That same year, Nick Saban, the head coach of the University of Alabama, took home a salary of $10 million. Two months later, on March 31, 2021, NCAA v. Alston was argued before the Supreme Court of the United States. The plaintiffs, referred to as Alston in this case, challenged the NCAA compensation rules. This unanimous 9-0 Supreme Court decision allowed Mac Jones's successor, Bryce Young, to earn millions before taking his first snap in Tuscaloosa, reaping the benefits of the Alston holding. The Court held that student athletes, under §1 of the Sherman Act, should be allowed to profit from endorsement as college athletes. The NCAA defended its actions for years prior to the Supreme Court decision, stating that college athletes receiving compensation from third-party deals negates the pure amateurism of sports. However, Justice Gorsuch has a drastically different take on the NCAA’s “safeguarding” of amateur sports. He wrote, “Price-fixing labor is price-fixing labor. And price-fixing labor is ordinarily a textbook antitrust problem because it extinguishes the free market in which individuals can otherwise obtain fair compensation for their work.” And as the clock turns to almost two years after the Alston decision, NIL policy has taken the college sports world by storm.
In recent months, Congress has sought to propose a bill that will set a national standard around NIL policy. Senator Roger Wicker (R., Miss.) is proposing a bill that would legalize third-party endorsements, but prohibit universities and boosters from using NIL for recruiting purposes. The NIL policy has become a partisan issue with Republicans wanting strict focus on antitrust protection and athlete restriction in the NCAA, whereas Democrats are gearing towards bills that bind healthcare and lifetime scholarships, providing for revenue sharing, collective bargaining, and more overall freedoms in NIL ventures. Wicker’s announcement is not the first, as Senator Tommy Tuberville (R., Ala.) shared with Sports Illustrated that he is working with Senator Joe Manchin (D., W.Va.)and commissioners of the Power Five conferences to draft a bill of their own. One thing is for sure, there is no separation of college sports and state.
NIL and Female Athletes
As cynics and puritans flocked to various platforms to share their distaste for the new and supposedly tarnished world of college sports, the underdogs received their first taste of victory. Despite cries of only the top 1% of college athletics (football, men’s baseball and basketball) thought to be profiting from this ruling, five stars to walk-ons take their checks. Additionally, the NIL policy is not only benefitting male athletes, but there are notable and significant returns for female athletics. The NIL policy has established not only million dollar contracts for female athletes, but also platforms to discuss the growing desire for equity in female arenas, courts, tracks, pools, and fields. The professional sphere for women’s sports does not historically bring about lucrative futures. However, the NIL policy is allowing women in sports who choose to “hang up their cleats” after college to start businesses, invest their money, and create a foundation for their post graduate careers.
Due to the unregulated nature of the early stages of the NIL policy, it is unclear how successful the first year of its reign has been. However, reports are showing that women are championing this new era of college sports. Without factoring in football, female athletes make up over 53% of all NIL deals. These statistics prove what many have already known; women in college sports have had to become familiar with marketing themselves to niche demographics. It is an unspoken part of their job to bring more attention to their presence on campus, as mainstream media rarely does. However, deals with major brands brings about name recognition and respect from fans, professional athletes, and their male counterparts. Women in sports are being monetarily rewarded for their athletic efforts, granting them credibility, leverage, and allotting them a seat at the table to further the conversation. While the journey for women’s equality in sports has barely crossed the starting line, female athletes are making their presence known, with more and more endorsements, contracts, and platforms coming their way.
The entire Santa Clara University Women’s Soccer team took advantage of the attention surrounding their 2020 NCAA Division 1 Championship and signed NIL deals with ChiliSleep in October of 2021. Since ChiliSleep’s previous deals have been with professional teams like the Cincinnati Reds and Seattle Mariners, it is clear that this deal with SCU is significant. Similarly, Stanford Women’s Basketball guard, Haley Jones, signed a deal with Nike valued at $74,000, making it the eleventh most valuable NIL deal. Jones’s Nike deal joins notable deals with Caitlin Clark, Bronny James, DJ Wagner, and Juju Watkins. In order to build on deals like these and connect more brands and athletes for endorsements and sponsorships, local colleges have even formed their own “marketplaces.” Local Silicon Valley colleges, like Santa Clara University and San Jose State, have launched these platforms to “maximize NIL support” for the student-athletes at their institutions. While college athletes and their respective schools have gained more opportunities from the new NIL policy, the new rules add an extra layer that the parties must work through.
Impact on Recruiting
With the ability to earn money on one’s name, image, and likeness also comes a new playing field of competition to see who can get the biggest deal. NIL deals for college athletes come from two primary sources: major corporations and local businesses. While schools themselves are still unable to contribute money to the pockets of their athletes, their wealthy and powerful alumni and boosters now are able to do so on their behalf. Wealthy boosters are able to entice college athletes by forming business ventures that pay athletes for appearances, endorsements, and other NIL type activities. This resurfaces an issue the NCAA so desperately sought to crack down on years ago. Although, at that time, the payments involved under the table cash exchanges or capital expenditures for the benefit of athletes and their families. Today, this means that schools with alumni and booster networks with more corporate wealth are more desirable landing spots for highly-recruited collegiate athletes. It also means that powerful boosters who are able to avoid NCAA regulations are often “seen by many as saviors of their programs” because of their ability to bring new life to athletic programs by attracting the best talent. As of May 2022, the NCAA has implemented new regulations to limit the power of boosters and regulate NIL deals, but just as was the case before Alston, boosters will likely continue to find new ways to get around the rules and ensure their influence over these programs remains intact. Despite the uncertainty behind the NIL policy, its presence can continue to act as an equalizer in college sports, especially women’s sports, seeking to grant financial, social, and cultural opportunities to enhance the female stars of our future.
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