NIL and the Future of Collegiate Sports

NIL and the Future of Collegiate Sports The landscape of college athletics is undergoing a large shift. Once, once a haven for the values of amateurism, collegiate sports are now beginning to resemble the professional model of many sports leagues. This shift began with the development of NIL or name, image, and likeness. Previously, collegiate athletes were prohibited from receiving compensation due to their status. However, on July 21st, 2021, the Supreme Court found that the NCAA’s policies on athlete compensation violated anti-trust laws (Hart, 2024). As a result, the NCAA changed their policies allowing student-athletes to be compensated for endorsement deals, advertisements, and merchandise. There are two main ways a student-athlete can make money from NIL. The first is through branding and merchandising. Student-athletes typically have a fair market value attributed to them which brands will pay in exchange for endorsements for their products and services. These deals are beneficial for college athletics as they allow students to learn how to work in business and build a brand for themselves. Secondly, student-athletes make money from NIL collectives. These are deals in which a school or booster organization collects funds by facilitating brand deals with multiple businesses with the goal of incentivizing more players to commit to their programs. However, this year came with a new breakthrough in the ability of student-athletes to profit from their sport. In the anti-trust case of House v. NCAA, the U.S District Court for the Northern District of California granted a settlement that would allow colleges to share over 20% of total revenue with student-athletes (Sanders and Wohlwend, n.d). Unlike NIL, which facilitates money between brands and students, these payments would be made directly between the students and their schools. In this paper, I will argue that a direct revenue sharing system would be bad for college athletics. The Destruction of the Amateurism Ethos of College Sports College athletics were first popularized in the spirit of amateurism. This meant that players competed for their love of the sport and for personal growth rather than for financial gain. The spectacle of watching athletes compete purely for the passion of their sport is what has allowed college athletics to become an integral part of American culture. By receiving payment from the school and losing their amateur status, student-athletes less resemble students and more employees of the institution. Instead of using their brand image to learn how to get money from revenue, the students instead receive a guaranteed paycheck and learn nothing in the process. As amateurs, athletes are encouraged to continue their academic pursuits as well as their athletic ones. This allows for greater personal development and sets them up for success once they’re done playing. By paying athletes as professionals, they are disincentivized to focus on their education and instead are encouraged to be athletes exclusively. Furthermore, amateurism promotes a culture of equality among athletes. Without salaries, all athletes receive the same treatment from their institutions. If schools were to pay athletes, there would be an immediate preference for sports that generate higher revenue such as football and basketball which are typically male dominated. By promoting direct revenue sharing, schools lose sight of the goal of Title IX which is to provide equal treatment for all athletes regardless of gender. Objection 1: Student-athletes are a large source of revenue for these institutions and deserve to receive compensation from them. Reply: It is true that student-athletes are a large source of revenue for these institutions. However, these same institutions often provide these students with food, housing, and an education as compensation already. Recruiting will be Dominated by High Revenue Schools Allowing schools to give a percentage of revenue towards student athletes will immediately benefit large, successful schools who are able to generate much more revenue. Schools which have a greater annual revenue will be able to offer more money to highly talented athletes. As a result, these schools will be able to buy off the most talented players in any given recruiting class and leave the rest of the schools with less talen t. Since these teams have more talented players and resources, they will generally have more successful seasons and generate even more revenue. This will allow them then to recruit the most talented players in the next recruiting class and repeat the cycle. By allowing schools to directly pay players, the NCAA would create a system in which the largest programs are able to hold all of the talent, money, and success at the top and leave nothing for the teams at the bottom. The median generated revenue for a Division I FBS football team in 2022 was 71 million dollars (NCAA, 2023). However, some of the largest programs in the sport were able to generate hundreds of millions of dollars more. With spending power multiple times greater than most schools, these institutions would be able to pay for the most talented athletes year after year. This would destroy the ethos of college sports as we know it. The same couple of schools would dominate these sports every year while everyone else struggle to find talent. This predictability would eventually lead to declining interest and support for college athletics providing less opportunities for student-athletes in the future. Costs on Students and Faculty Paying players direct salaries would add greatly to the total cost of running a successful athletics program. As a result of these increased costs, schools will begin to look for new ways to cut expenses and generate more revenue. For example, to make up for the millions of dollars paid to players, they could raise tuition and decrease scholarships given to the student body. This could potentially put financial strain on millions of university students across the country. These students, who are the main source of support for these programs, would no longer be able to attend as many sporting events as they are struggling to support themselves in school. Schools may also look to cut certain athletic programs altogether. In a system that seeks to profit from collegiate athletics, programs that produce less annual revenue would potentially be cut to decrease expenses. This would take away the opportunity for thousands of athletes to practice their sport at the next level. Over time, we would see the scope of college athletics diminish until only those sports that are profitable will remain. Objection 2: Money used to pay players will not come directly from university funding, but instead as a portion of the revenue that the athletic programs raise in the first place. Therefore, they will not take money from other programs or the university. Reply: While student-athletes will be paid with a share of the revenue generated by the team, programs will be eager to fill that expense. Universities with large cultures around profitable sports (football and basketball) will increase money into the program so there are no cuts on the team. Money they will take from the students and other programs. alue and Life-Preparation grams. By encouraging players to seek profit, the NCAA is taking away from their original purpose of enhancing s from transferring between schools. Specifically, students were required to sit out for a whole year after college. Of student athletes who transfer, only about 20% will earn their degree on time (Evans, 2022). Only 43% a student’s earned credits when they transfer. Recently, the NCAA overturned these policies in favor of the transfer or the future of college athletics. With direct revenue sharing, schools will use monetary offers to persuade players to uld cause transfer rates to skyrocket and graduation rates of athletes to greatly diminish. The educational value of etes with professional goals will be set for life with professional contracts and will not need a degree. Reply: While it is true that athletes who succeed at the professional level will be able to retire without a degree, it is rare for a college athlete to reach that level. The average rate of college players who go on to play professionally is about 2% across all major U.S sports. It is best to encourage athletes to achieve their degree in case their professional plans do not come to fruition. Conclusion Allowing colleges to directly pay student-athletes is bad for collegiate athletics. Primarily, directly paying student-athletes destroys the principles of amateurism and equality that college sports were built upon. Instead, player salaries will give more value to certain athletes over others. Additionally, allowing schools to spend a percentage of their revenue will benefit large, successful programs. These schools will be able to h oard all of the talent and money to repeatedly win championships. Moreover, encouraging large sports programs to give out large sums of money will have negative effects on the members of those institutions. To match these new expenses, schools will seek to raise funds by increasing tuition or cutting other programs. This would decrease the number of opportunities athletes of less profitable sports have to play at the next level. Finally, the application of the transfer portal along with the direct payer system would encourage student-athletes to transfer schools in search of more money, decreasing their likelihood of earning a degree. All these effects of the direct payer system contradict the NCAA’s original purpose: Creating a system where athletics enhance academic experience. Works Cited