Paying Collegiate Athletes
The debate over paying collegiate athletes in the United States has gained significant traction, particularly regarding the financial disparities between the revenue generated by college sports and the compensation received by the athletes. Major sports like NCAA football and basketball attract substantial viewership and revenue, yet historically, athletes have not shared in these profits. In 2021, the NCAA changed its rules to allow athletes to earn money through endorsements and name, image, and likeness (NIL) deals, marking a significant shift in policy. Ongoing discussions also revolve around the fairness of compensating athletes, especially since many face restrictions on part-time employment that could aid their financial situations. While scholarship programs cover some expenses, they often leave gaps, particularly regarding cost-of-living needs and injury-related medical costs. Recent legal actions, including court rulings and state legislation, have further influenced the landscape, leading to increased opportunities for athletes to receive compensation. The settlement of several antitrust lawsuits in 2024 proposed a revenue-sharing model and direct payments to athletes, highlighting the evolving nature of this contentious issue. As this dialogue continues, perspectives vary widely, reflecting the complexities of amateurism, education, and financial equity in college athletics.
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Paying Collegiate Athletes
Whether collegiate athletes should be paid for playing sports for their respective institutions has emerged as one of the most hotly debated topics in both higher education and sports in the United States. National Collegiate Athletic Association (NCAA) football and basketball contests are some of the most widely viewed, highly rated, heavily bet on, and highly profitable sporting events in the country. Numerous colleges and universities are renowned for their football (such as the Alabama Crimson Tide and the Notre Dame Fighting Irish) or basketball (Duke Blue Devils and the UCLA Bruins) programs. The NCAA and individual colleges and universities profit significantly from television revenue and ticket and merchandise sales stemming from their athletic teams, yet these financial gains historically have not been shared with the athletes themselves. The NCAA changed its rules in 2021 to allow collegiate athletes to earn money from endorsements and name, image, and likeness (NIL) deals. In 2024, the organization was working with collegiate athletic conferences on an antitrust settlement that sought to allow colleges and universities to pay their student athletes directly and remove limits on athletic scholarships, while also restricting third-party NIL payments and eliminating pay-for-play offers by recruiters.
Background
Sports generate tremendous profits in the United States, and college athletics are no exception. In fiscal year 2012–23, the NCAA generated almost $1.3 billion in total revenue, mostly from media rights and marketing deals. However, none of this money found its way to the student-athletes whose talents and efforts produced the revenue, even though colleges, universities, and the NCAA market college athletics with the intent of generating revenue.
Most arguments for monetary compensation center on fairness and improving student-athletes' daily lives. Colleges and universities have often had strict policies prohibiting student-athletes from holding part-time jobs out of concern that working would detract from student-athletes' athletic and academic responsibilities and possibly lead to injuries that could disrupt their participation in sports. Furthermore, neither colleges and universities nor the NCAA corporate office are required to provide accident insurance for student-athletes for injuries that total less than $90,000 in medical fees. However, the NCAA requires athletes to have accident insurance before they can participate in school athletic programs.
Student-athletes are amateurs by definition, and sign letters of intent acknowledging that they will not be paid when they commit to a college program. Further, many do receive compensation in the form of scholarships. Full athletic scholarships cover tuition, room, board, textbooks, and various other university-related fees, though most athletic scholarships cover only portions, and not all, of these costs. Opponents of paying student-athletes argue that the opportunity to obtain a free education is itself a valuable commodity that should not be overlooked.
Impact
In August 2014, Judge Claudia Wilken determined in the federal case O’Bannon v. NCAA that the NCAA could not prohibit colleges and universities from providing cost-of-living stipends to student-athletes; the ruling also enjoined the NCAA’s ban on compensating college players for the commercial use of their names and images on merchandise, such as posters, DVDs, and video games. Wilken also recommended that the NCAA pay student-athletes five thousand dollars per year, which they would receive upon either graduation or leaving their respective institution, to cover cost-of-living expenses. However, the NCAA appealed this decision, and a subsequent ruling in 2015 struck down Wilken’s deferred-compensation recommendation.
In January 2014, members of the Northwestern University football team attempted to form a labor union to challenge what they perceived as the authoritarian rules and regulations of the NCAA. After a regional director of the National Labor Relations Board (NLRB) in Chicago, Illinois, decided that college football players on athletic scholarships should be considered “employees,” Northwestern’s football players cast secret ballots to vote on whether to unionize. However, university officials, who appealed the decision, confiscated these ballots. In August 2015, the five-member panel of the national office of the NLRB unanimously rejected the Northwestern football team’s efforts to unionize; they claimed that allowing this would upset the balance of college sports between unionized and nonunionized teams, as each team at each institution constitutes its own separate entity.
In September 2019, California passed the Fair Pay to Play Act, which allowed college athletes to hire agents and be paid for endorsement deals. Several other states soon followed. In response, the NCAA announced that it would begin making changes to allow student-athletes to receive compensation for the use of their name, image, and likeness (NIL).
Then, in June 2021, the Supreme Court decided unanimously in National Collegiate Athletic Association v. Alston to uphold a lower court ruling that determined the NCAA had violated antitrust laws by preventing college athletes from receiving benefits and compensation related to academic causes. Following the ruling, the NCAA announced a change of policy in July of that year that allowed college athletes to receive compensation from endorsements and NIL deals. Many college athletes soon took advantage of NIL deals, and by December 2022 Business Insider reported that a wide range of student athletes had signed deals ranging from those worth several hundred dollars to those worth six figures. Following the decision, college sports fans, or boosters, began setting up collectives to benefit student athletes in exchange for benefits like online get-togethers or private events; however, the NCAA almost immediately enacted rules to curb the collectives' influence in recruiting new athletes.
In May 2024, the NCAA reached a historic settlement of three antitrust cases that athletes had filed against the organization in what became known as House v. NCAA. According to the settlement, the NCAA and the five college athletic conferences known as the Power 5 would pay more than $2.7 billion in back damages to former and current college athletes, allow colleges to pay student athletes directly according to a revenue sharing scheme with an annual per-school pool of more than $20 million for distribution to athletes, and remove caps on athletic scholarships. While the NCAA board of directors had approved the settlement that month, Judge Claudia Wilken, who had previously heard O’Bannon v. NCAA (2014), withheld her approval of the settlement, pending clarification of certain terms and restrictions related to third-party NIL deals, pay-for-play inducements, and boosters. Later that year, the parties involved submitted revisions for Wilken to review.
Bibliography
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