NCAA Opens Door For Scholar-Athlete Endorsements In 2021

By the time the 2021-22 academic year rolls around, the COVID-19 crisis will hopefully be little more than a distant memory. But now, it appears that academic year may represent a milestone year for NCAA student-athletes, as it could mark the first during which they can be compensated in exchange for the use of their name, image, and likeness.

Until now, just about everyone has been able to profit from scholar-athletes’ athletic performance, with the exception of the scholar-athletes themselves. Universities, conferences, and the NCAA as a whole reap countless profits from the sale of television rights and tickets. In turn, television networks and other media outlets get their share from the sale of advertisements in connection with the broadcast of NCAA sporting events. And recently, in the wake of the 2018 Supreme Court ruling enabling states to allow sports wagering within their borders, sports wagering operators in a growing number of states are reaping the benefits of offering bets on college sports, and state governments, in turn, are generating new tax revenues.

Calls for the NCAA to allow athletes to somehow get a piece of the pie have been getting louder and louder in recent years, but until recently, the NCAA has held firmly in its stance against allowing payments of any kind to student-athletes. However, last October, the NCAA’s Board of Governors outlined guiding principles for permitting student-athletes to profit from the use of their name, image, and likeness. And now, just today, the Board of Governors finally issued a statement that it supported rule changes to allow student-athletes to be compensated from third-party endorsements “both related to and separate from athletics.” In its statement, the NCAA stated that it expected all three divisions by January 2021 to adopt new rules for the use of name, image, and likeness that would take effect at the start of the 2021-22 academic year. The Board of Governors’ direction relied on a comprehensive report issued last week by the NCAA’s Federal and State Legislation Working Group.

Although the NCAA’s move to allow student-athletes to be compensated by third-party endorsements will be viewed by many as welcome and overdue, it is not without its limitations. Namely, the Board of Governors’ statement indicated that no name, image, and likeness activities could take place that would be viewed as “pay for play,” reaffirming a long-held NCAA position that athletes should not be viewed as being paid in exchange for their participation in collegiate athletics. To be sure, the NCAA’s statement explicitly stated that “at no point should a university of college pay student-athletes for name, image, and likeness activities,” and “compensation for athletics performance or participation is impermissible.” Further, while student-athletes can identify themselves by sports and school, they are not allowed to use school or conference logos, trademarks, and the like, and schools, conferences, and boosters are not allowed to be involved in the use of name, image, and likeness.

The Board of Governors’ recommendations also took into account potential legal side effects of allowing student-athletes to attempt to monetize their name, image, and likeness. Namely, they announced that the NCAA will engage Congress to establish a “safe harbor” to allow it to provide protection against lawsuits filed related to name, image, and likeness rules. The NCAA, however, also announced its intention to lobby Congress to “preempt” any other name, image, and likeness laws, perhaps signaling an attempt to strike back at California’s attempt to pass its own name, image, and likeness legislation.

While the rise of legal sports wagering in the United States may be seen as unrelated to allowing student-athletes to profit from their likeness, it stands to reason that the NCAA at least took this into account in its change of position. Unlike professional athletes who are already compensated—often handsomely—for their services, uncompensated NCAA athletes are considered by some to be more susceptible to receiving payments in exchange for performing (or not performing) in the way a bettor may desire. By opening the doors for at least some athletes to earn money through endorsements, the NCAA may be viewed as having taken a positive step from a game integrity perspective.

Allowing third-party endorsements will certainly be viewed by many as a welcome step toward compensation for scholar-athletes, but it is likely that those benefiting significantly from endorsements will be limited to a very narrow slice of participants in the highest-profile sports, namely football and men’s basketball. So, while the NCAA is taking a positive step, it remains the case that the overwhelming majority of athletes in “non-revenue” sports—most of whom spend more time on the practice field during their respective seasons than they do in the classroom—will be largely left out in the cold, in terms of being able to be paid for their performance. This will remain the case until the NCAA allows schools to directly compensate athletes (over and above providing scholarships) which is not likely to happen soon.

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