Posted: August 17th, 2022

NIL component of collegiate sports

 

Title page and thesis

    1. The landscape of introducing the NIL component of collegiate sports was released in a rushed manner, as many schools and states have very different rules which ultimately also affects the landscape of collegiate recruiting tactics. It’s imperative that we understand how the new NIL legislation works, who/what it affects and what the research tells us about this evolving landscape.  At the end of the day, it could be causing more harm than good as not every NCAA athlete is receiving the same benefits.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Abstract/ executive summary

 

 

 

 

 

 

 

 

 

Zion Williamson, Reggie Bush, Tim Tebow, Johnny Manziel, and Vince Young. These are all arguably household names of notorious college athletes that would have made a fortune had NIL been implemented earlier, but should it be implemented now? College athletes are getting paid. Whether it’s the popular opinion or not, the debate is just a conversation going forward. As of 2021 student athletes are now able to monetize the name, image, and likeness. The history of amateurism in sports has helped turn this new policy into existence, but many are still speculating whether the pros outweigh the cons of the current landscape. Without a federal policy for monetizing NIL, time will tell on the impact that this brings to the universities, the student athletes, and the respective environments.

History of the NCAA and Amateurism

In Jayma Meyer’s “A Win-Win: College Athletes Get Paid for Their Names, Images, and Likenesses and Colleges Maintain the Primacy of Academics”, Meyer discusses the history of amateurism, how it ties into collegiate athletics and how it relates to what California’s Governor Gavin Newsome has started with the Fair Pay to Play Act. The specific example of Newsome’s motion is a groundbreaking turn in sports history as the act will prohibit all California college athletes from earning compensation through monetizing their name, image, and likeness. The introduction of this action dates back and clashes with the NCAA’s original rules of establishing NCAA athletes as amateurs. The NCAA realized that they needed to create a “NIL Committee” to maintain authority as they started seeing an increase in lawsuits and legislation coming into effect. In October 2019, it was to be seen that each division of the NCAA create a blueprint for the implantation of NIL by January 2021.

 

Amateurism through the Decades

The basis of amateurism dates back to the 19th century as it origin’s from England, where it operated to prevent the working classes from competing against the landed aristocratic elite (“Amateurism” | Encyclopedia.com,” n.d.). The basis of this term, in reference to sport started when many sports were played in America as the contestants of the games/matches were considered amateurs. Tying back to the NCAA “in its early days did not enforce many of its policies, rendering definitions and principles of amateurism inconsequential. Article VI of the NCAA’s 1906 bylaws burdened each member institution with enforcing violations of its amateurism principles, such as “the offering of inducements to players to enter colleges or universities because of their athletic abilities or maintaining players while students on account of their athletic abilities”(Meyer, Jayma and Zimbalist 250,251). Essentially at the time, a modern-day athletic scholarship violated the rules of amateurism at that time, and financial aid unrelated to athletics was prohibited.  In 1916 the NCAA coined the term amateurism and based on the bylaws of VI(b) amateurism was defined as “one who participates in competitive physical sports only for the pleasure, and the physical, mental, moral, and social benefits derived therefrom.” (Meyer, Jayma and Zimbalist 251). In less than seven years the original definition was changed, so in 1922 it was then defined as “An amateur sportsman is one who engages in sport solely for the physical, mental or social benefits he derives therefrom, and to whom the sport is nothing more than an avocation(Meyer, Jayma and Zimbalist 251). The authority of the NCAA was not as prevalent as in modern-day, so many of the members discarded its policies. In 1929 “The Carnegie Commission report on athletics summarized the prevailing arguments against the sports media. It was argued that media were professionalizing the amateur game by singling out coaches and athletes for special attention through interviews, special coverage, or awards” (Burlette Carter 266). Criticism for media began to roll in as they would dramatize negative aspects of sports such as injuries or deaths. It was believed that by showing the public this point of view that the athletes would not be seen as amateurs. After WWII the situation started to get out of hand the NCAA had to enforce the true authority on the code of amateurism. The NCAA describes their principle of amateurism by stating that “[s]tudent-athletes shall be amateurs in an intercollegiate spirt, and their participation should be motivated primarily by education and the by the physical, mental and social benefits to be derived.”(NCAA.nd). As stated previously the NCAA formulated their concept of amateurism in their first constitution in 1906 and it has persisted ever since.[1] When compared to a professional athlete, an athlete who receives direct payment or compensation for their athletic participation[2], a student athlete is an amateur because of their inability to earn payment or compensation from their participation in intercollegiate athletics. This policy remains in force after the recent NCAA NIL policy change and continues to be a controversial provision of the NCAA’s by-laws.

 

 

Recruiting

College students playing professional sports lack official and written contracts with their agents. Coaches nurture their talents to win the championships that earn them good financial returns. College students risk critical injuries that hinder their careers as professional athletes or in specialized education courses. Recruiting college students in the United Students encourages amateurism, hindering them from becoming professional athletes. Top college sports talent does not benefit from the financial resources they won in the National Championship. National Collegiate Athletic Association (NCA) considers top talents to be students who do not deserve financial share (Romano, 2022). Top talents win huge financial resources in the championships. The school management officers and coaches share the won funds. According to Romano (2022) the school managers hire experienced and competent coaches to train their teams. The lack of support from school management contributes to a few talented young athletes becoming professional athletes (Closa, 2020). These academic and talent-gifted students complete their college education and embrace career lives away from sports. Injuries sustained in sports to top talented athletes hinder them from completing education or pursuing professional sports that ruin their lives completely, as the coaches and managers reap from huge financial resources won. Also, some publicized athletes face a negative reputation once they commit unethical behavior in society (Romano, 2022). Therefore, most young and talented college students in sports do not achieve their dreams of being professional athletes.

Disadvantages in gender and race contribute to the unfair recruitment of officials in college sports. According to Hextrum (2020), there is a low representation of women in top college sports management. Dominant gender ideology creates limiting beliefs that discourage women from taking leadership in college sports. Men occupy the athletic director positions in college sports. Evans & Pfister (2021) add that gender stereotyping perceives women as lacking leadership skills in sports. The gender stereotypes consider women highly emotional, making it too difficult to handle college sports madness. Also, females lack mentorship programs in college sporting activities that could prepare them to occupy sports positions (Evans & Pfister, 2021). Gender inequality in college sports, therefore, hinders women’s participation and advancement in college athletics.

Another issue that affects college sports is the disadvantage of race. It contributes to the low representation of minority communities in the top leadership positions in college sports (Hextrum, 2020). African American people have less representation in senior positions in college sporting activities than their white counterparts. The members of the minority communities lack excellent social networks that deny them opportunities to access senior leadership. Black coaches often lose their jobs more than white ones (Hextrum, 2020). The unfair recruitment of leaders in college sports encourages amateurism, where most top talents fail to get opportunities to advance as professional athletes (Hextrum, 2020). Thus, race differences hinder excellent recruitment in college sports leadership.

The adoption of amateurism in college sports limits the number of students becoming professional athletes. The Supreme Court in the United States highlights that the initial amateurism idea has changed as it denies college students the benefits of the sport (Foster, 2021). NCAA encourages students to complete college education before being professional athletes. The professionalism ensures that athletes earn decent pay that transforms their lives positively. The NCAA’s perspective considers college students as amateurs who lack professional experience in sports (Foster, 2021). Amateurism instills moral values into college students to prepare them as career experts or professional athletes. It encourages college students to develop a positive attitude in their lives. Amateurism advises adherence to a specific education course to enter careers such as legal practice and medicine. College sports should foster professionalism in potential professional athletes with excellent financial literacy (Foster, 2021). Therefore, amateurism encourages the development of a positive attitude and embracing excellent moral values in college sports despite limiting top talents’ entry into professional athletic careers. However, most top talents in the United States college sports fail to transition to professional athletes because of amateurism (Closa, 2020). They get encouragement to pursue careers such as medicine and legal practice. Despite top talents winning high financial resources invested in championships, only coaches and school managers benefit. Amateurism instills professional values in college students. The top talents who transition to professional athletes earn decently.

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Right of publicity

At its core, the right of publicity refers to an individual’s ability to “control the commercial use of his or her identity.”[3] This right has granted figures like celebrities and professional athletes the power to license the use of their name, image, and likeness (“NIL”) to third-parties for commercial purposes. In a modern society dominated by technology and digital media, the right of publicity has arguably become increasingly important. While digital media and marketing have undoubtedly affected an individual’s right of publicity, this right was first theorized by American legal scholars far before the invention of the Internet and the computer. The right of publicity grew out of an individual’s right of privacy, which was first formalized by Samuel Warren and Louis Brandeis in their influential 1890 essay The Right to Privacy.[4] Warren and Brandeis viewed an individual’s right to privacy as one that was inherent to human nature and described it as “the right to be let alone.”[5] At that time, Warren and Brandeis were weary of how technological innovations like instantaneous photography could invade personal privacy.[6] Coupled with the rise of a “sensationalism” style of journalism that centered around gossip and interest stories[7], invasions of privacy were becoming more commonplace in American society by the turn of the twentieth century. With this movement and emerging technologies in mind, Warren and Brandeis felt that developing an individual right to privacy was necessary to protect individuals from these widespread privacy invasions.[8]

In the case of Haelen Laboratories, Inc. v. Topps Chewing Gum, Inc., the Court distinguished the right of publicity from the right of privacy by holding that “in addition to and independent of that right of privacy . . . a man has a right in the publicity value of photograph, i.e., the right to grant the exclusive privilege of publishing his picture . . . [t]his right might be called a ‘right of publicity.’”[9] The dispute in Haelen arose because a professional baseball player entered into a contract with Haelen Laboratories and Topps for the exclusive use of the player’s image in their products.[10] During the twentieth century, chewing gum manufacturers started to sell baseball cards with their product in an attempt to target a younger audience.[11] As a result, the chewing gum manufacturers would enter into contracts with professional athletes to use their NIL in their products.[12] Topps, with knowledge of the player’s contract with Haelen, then induced him to sign a similar contract with them.[13] Accordingly, Haelen brought suit against Topps arguing that they had the exclusive right to use the baseball player’s NIL in their products.[14]

Prior to the adoption of the NCAA’s interim NIL policy, student athletes were prohibited from earning compensation from the commercial use of their NIL. For example, Article 12.5.2.1(a) of the NCAA Division 1 Manual states that an athlete will be disqualified from participating in intercollegiate athletics if the individual “[a]ccepts any renumeration for or permits the use of his or her name or picture to advertise, recommend or promote directly the sale or use of a commercial product or service of any kind.”[15] Additionally, per Article 12.3.1 of the NCAA Division 1 Manual, an individual will be disqualified from participating in intercollegiate athletics if they have agreed either orally or in writing to be represented by an agent for marketing their reputation or athletic ability.[16] These two policies, when working in tandem, effectively restricted a student athlete’s ability to exercise their right of publicity because they were deprived of any benefit from the commercial use of their NIL.

This inability to exercise their right of publicity frustrated many student athletes, most notably Ed O’Bannon, a first round NBA draft pick and former All-American basketball player at UCLA. O’Bannon noticed his likeness had been used in the NCAA Basketball series, a college basketball video game made by Electronic Arts (“EA”), yet he had never consented to the use of his likeness in the video game, nor had he been compensated for its use.[17] Consequently, O’Bannon brought suit against the NCAA and the Collegiate Licensing Company (“CLC”), a company that handled commercial licensing endeavors for the NCAA, arguing that the NCAA’s NIL restraints violated antitrust law.[18] Around the same time, Sam Keller, a former quarterback at Arizona State University and the University of Nebraska, noticed that his likeness was similarly being used in the NCAA Football series, a college football video game made by EA.[19] Keller, along with other disgruntled student athletes, filed a putative class-action claim against the NCAA, EA, and the CLC, alleging that the nonconsensual use of a student athlete’s likeness in the video game was a violation of their right of publicity.[20] Coupled with multiple state legislatures that have enacted student athlete NIL laws, students athletes are now allowed to exercise their right of publicity, much like professional athletes.

Long before the creation of Instagram, social media, and the computer, professional athletes have enjoyed the protections of the right of publicity. Notably, the Haelen Laboratories case, which formalized the idea of the right of publicity, concerned the commercialization of the identities of professional baseball players.[21] A professional athlete’s ability to profit from the commercial use of their identity is one of their greatest financial opportunities. For example, it is estimated that athletes such as Lebron James, Tiger Woods, and Roger Federer earn the majority of their annual compensation from endorsement contracts.[22]

While the ability to profit from the commercial use of their identity is very beneficial to professional athletes, the protections stemming from an individual’s right of publicity are not absolute. The right of publicity often conflicts with the First Amendment, particularly the freedoms of speech and the press.[23] For example, when a newspaper or sports broadcast reports on a newsworthy event, the nonconsensual use of an individual’s name, image, or likeness by the newspaper or broadcast, in connection to a newsworthy event or matter of public interest, is generally protected by the First Amendment.[24] This newsworthiness exception to the right of publicity can greatly affect professional athletes, seeing as sporting events are often considered newsworthy. For instance, four-time Super Bowl champion Joe Montana sued a California newspaper for reproducing his image and likeness in the aftermath of his final Super Bowl victory.[25] The court granted in favor of the newspaper, holding that because Montana’s Super Bowl victories were newsworthy, the newspaper’s constitutional rights trumped Montana’s statutory right of publicity.[26] The right of publicity has undoubtedly conferred a benefit upon professional athletes, but its protections can nevertheless be limited, particularly by another person or entity’s constitutional rights.

Overall, the right of publicity and the ability to effectively license the commercial use of one’s identity have been extremely beneficial for professional athletes and corporations alike. A prime example of this symbiotic relationship is Michael Jordan’s ongoing contract with Nike. Jordan, who is often heralded as the greatest basketball player of all time, initially signed a contract with Nike in 1984, and since then, both Jordan and Nike have grown exponentially.[27] Nike is now a Fortune 100 company and one the world’s leading athletic performance brands.[28] Likewise, Michael Jordan is an international icon and the face of one of basketball’s largest and most prestigious brands.[29] The potential for similar success, coupled with modern digital marketing capabilities, has—and will continue to create—endless opportunities for professional athletes to fully utilize their right of publicity.

 

Analysis of Name, Image, and Likenesses

Since the adoption of collegiate athletics and the creation of the NCAA, the purpose of the NCAA has been to “arguably” protect student-athletes by enforcing its regulations and bylaws. Under these bylaws, the NCAA has been able to create a successful, universal governing structure for over 1,000 universities, and over half a million student-athletes. The governing structure and the regulation of bylaws make college athletics a sustainable business that generates billions of dollars in revenue.

The announcement of NIL is an interesting topic as many states and universities abide by different rules and regulations. This past year’s college football playoff featured: The University of Michigan, the University of Cincinnati, the University of Alabama, and The University of Georgia. Alabama and Georgia both reside in the SEC conference, while Michigan is in the Big Ten, and Cincinnati is in the American Conference. While all four school athletic programs are Division I, they are all very different in terms of talent, revenue, and overall size. After further analysis of their NIL programs, the results are quite interesting. It is important to note that each university is individually managed by state policies which ultimately affect the restrictions and regulations that student-athletes are dealing with.

 

Analysis of NIL and Michigan, Alabama, Cincinnati, and Georgia

 

Strengths:

With an interim NIL policy in place, all four universities have enabled the ability for student-athletes to have the opportunity to earn compensation through name, image, and likenesses. NIL enables student-athletes to have the right to publicity, which was not allowed previously. Student-athletes can now accept monetary or product exchange from a business for using them in advertisements, appearances, sponsorships, and much more. Not only does this give student-athletes a chance to earn pay for play for themselves, but also for their families; This will help reduce the financial and emotional stress of allocation of funds for tuition. The ability to promote themselves as individuals will give student-athletes an opportunity to have a much vaster network, which will be beneficial for these individuals after college. Overlooked athletes will gain more recognition from creative marketing campaigns, and in addition to overlooking, marginalized sports will gain more attention. It is also fascinating to note that Michigan’s policy explicitly states that “There are no limits on the amount of income a student-athlete may earn through name, image and likeness activities provided any compensation is for work actually performed” (“U-M Name, Image and Likeness Policy (PDF),” n.d.). Since the adoption of NIL, many universities have started to form collectives for their NIL programs. “NIL collectives are essentially business entities that supporters of a school’s athletic teams (not the schools themselves) form under state laws to generate and pool revenue. These funds are then used to fund NIL opportunities for college athletes that are wanting to gain help in monetizing their NIL. Some NIL collectives are using a subscription-based model which allows fans to pay monthly or annual subscription fees in exchange for access to, interaction with, or memorabilia from their favorite school’s athletes. Other NIL collectives are relying more heavily upon sponsorships and donations for revenue. The creation of collectives have already made a massive impact on many universities and student-athletes, just last week “The non-profit collective Matador Club is offering Texas Tech football players—85 scholarship players and 20 walk-ons—the opportunity to make $25,000 in exchange for community service. The deals run for one year and will be renewable at the end of the year, and each is non-exclusive”(Riker, 2022). In addition, Miami University QB Jaden Rashada received over $9 million from Miami Booster John Ruiz. Overall, collectives are helping put more dollars into student-athletes pockets and providing more NIL opportunities for teams rather than individuals. Georgia has the Classic City Collective, Cincinnati has partnered with The Brand Group, Alabama has the High Tide Traditions Collective, and Michigan actually has three different collectives; The Champions Circle, Stadium & Main, and MGoDAO. All four of these universities have already made a tremendous impact on their student-athletes. (I will have a quote from an interview with a Cincinnati football team player). An incentive that can be used to help recruit players to stay for another year is also through the use of NIL if it means they would earn more compared to the amount if they declare to go pro.

 

Weaknesses

 

With the adoption of the name, image, and likeness being formulated there a still a ton of unaddressed issues that remain that directly affect the student-athletes, universities, sponsors, and surrounding environments. To start, high-profile athletes will reap the benefits way more than the average student-athlete. This can lead to negative effects in the locker room, with coaches, mental health, and overall recruiting tactics. It can be argued that student-athletes may put their attention on making money rather than education or actual competition. Many prominent high school stars will tend to lean to power houses or schools in states with loose NIL laws. It could also be argued and be seen since NIL has started that on average men will receive more opportunities for compensation compared to women. It already has been an ongoing issue of men and women being treated equally in the athletic field in regards to compensation, this could just fuel the fire. While revenue generated plays a big part in the compensation, the issue still remains.

Diving into the four schools from the college football playoff. The National College Players Association created an official NIL rating list by state. The scale is based upon a scale of 0-100%, NCPA identified 21 key aspects of NIL state laws that would be either helpful or harmful in regard to student-athletes NIL freedom. Additionally, recruits will turn to look at scales like this one or others rather than comparing facilities, coaches, education, conference, and campus. Safe to say that many incoming recruits will look to schools where they can capitalize the most on compensation. Looking at the scale, states without direct NIL laws have been permitted by the NCAA to have universities decide their own rules. In regards to the four schools from the CFP, student-athletes at Cincinnati had the highest freedom percentage of 76%, followed by Michigan(71%), Georgia(52%), and Alabama which actually was one of the lowest ratings for a state with a direct NIL policy at 43%. There is much more info to dig into outside of these NIL freedom ratings as direct school policies come into effect, and collectives have a massive impact. For example, Michigan is highly rated for NIL freedom and it wasn’t until May 24th of 2022 till U of M student-athletes use the famous block M for NIL activities. Before then all other schools in the CFP were able to use collegiate licensing for NIL activities, while Michigan student-athletes could not. Direct university programs are the real cause of concern, for a while Michigan had an arguably weak NIL program and star Michigan basketball center Hunter Dickinson even said: “If I’m the number one player in the country for basketball or football, why would I come to Michigan, where they’re saying they have the potential for you to get something?” … “When I’m at Alabama for football or if I’m at Kentucky for basketball, they’re like, ‘You can commit here and this deal, you can sign it right after you sign the letter for a million dollars.’ I would never come to Michigan if that’s the case.”(Voss, 2022)). A common policy between these four schools is that NIL activities can’t take precedent over classes, practice, games, etc. Tying this policy back to enforcement, what type of action can a university afford if their star athlete skips a class for NIL-related activity? At the end of the day, that star individual is most likely bringing in millions of dollars for the university. Can the school truly afford to take action, and risk making that student-athlete unhappy, and possibly transfer? Lastly, many student-athletes may not receive the proper resources to help facilitate deals, this could put a lot of individuals in terrible situations as brands can look to take advantage of these young kids that aren’t receiving help from schools without NIL education.

 

Opportunities

On June 30, 2021, the NCAA made a groundbreaking announcement that NCAA student-athletes would now be able to benefit from the commercial use of their NIL.[1] This interim policy, which has four core provisions, outlines how student-athletes can now take advantage of the commercial value of their NIL. To start, student-athletes can now engage in NIL endeavors that are consistent with the laws of the state where their university is located.[2] Additionally, student-athletes that attend a university in a state without any NIL legislation can engage in these activities without violating NCAA policies.3 Next, student-athletes can consult and hire professional service providers for NIL activities4, meaning they can now hire lawyers and agents to represent them in these activities. Finally, student-athletes should report their NIL activities to their university in a manner consistent with their state law or school or conference policies.5 While this interim policy is relatively brief and will remain in force as the NCAA works with Congress to enact a federal NIL policy 6, it is nevertheless a significant change in collegiate sports. The combination of state NIL laws and the NCAA policy change has created a plethora of NIL opportunities that student-athletes have quickly taken advantage of. For example, Spencer Rattler, a former top high school football recruit and at the time current quarterback for the South Carolina Gamecocks, announced via his Twitter account on July 1, 2021, that he had reached an agreement to be represented by Steinberg Sports, an athlete-representation, marketing, and consulting firm whose client list includes various notable NFL athletes. Within the next two days, Rattler announced the launch of his official merchandise website and a partnership with fast-food restaurant chain Raising Cane’s. Rattler is only one example of many athletes who quickly seized their newfound NIL opportunities. Furthermore, these NIL opportunities are not limited to corporate endorsements of high-profile student-athletes; rather, they are quite diverse and serve an array of purposes outside of brand marketing. For example, Degree recently announced they had partnered with multiple student-athletes across a range of sports for their Breaking Limits team.6 Through this program, Degree will share the stories of athletes from an array of diverse backgrounds to inspire others to “break their limits” and foster a more socially inclusive collegiate athletic environment.7 Another interesting collaboration formed between Built Bar and the Brigham Young University football team.8 Built Bar has pledged to pay the tuition of the football team’s walk-on players, and each member of the team will also receive $1000 for being a Built Bar brand ambassador.9 Finally, Arkansas wide receiver Trey Knox recently signed a socially-focused deal with PetSmart that will highlight his relationship with his dog, Blue.10 With the passing of the Fair Pay to Play Act in California and the federal ruling on player compensation, student-athletes will be able to generate an income from their NIL for the first time. It was reported by the U.S. Department of Education that college sports are a $14 billion industry (Murphy & Green, 2020). In Power 5 conference schools, African-American athletes represent more than half of the football and men’s basketball programs but 86% of African-American athletes come from families that are below the poverty line (Simpson & Chaingpradit, 2019). The adoption of the federal ruling on NIL compensation tremendous impact on student-athletes daily lives due to their ability to earn subsequent income. With the federal ruling on the NIL policy, all college athletes would have the ability to earn compensation, not just the top athletes from athletically dominant universities.

 

Threats:

The adoption of NIL has created some looming concerns, most notably that college sports could turn into a form of minor league sports as compensation comes into play. The negative connotation behind not having a federal ruling for all NIL activities is simply that it impacts so many layers of collegiate sports and the universities as a whole. Additionally, the enforcement of these regulations and policies is administered to the universities. In reality, there is a limit to the enforcement that they can issue. Simply put the NCAA and its universities are not above the law. Another issue that has already come into play is the transfer portal. Student-athletes have quickly realized that they can transfer to a school in another state and earn more compensation. It’s scary to think that recruits and transfers and turning into compensation to decide where to play and tying into that, collectives can help recruit athletes to their alma mater. Another issue that will arise from talented high school recruits joining schools based on collectives, is whether or not coaches have to play them? What if they aren’t any good, but are being paid 9 million dollars?

It is possible to foresee sports programs that generate less revenue will see fewer opportunities, and for the ones that do; The states with looser regulations will see an increase in those athletes. In turn, this can eliminate many sports programs that are already considered small. Essentially a ton of the athletes from a less populated sport could all start going to the same handful of schools to play their respective sport, and many schools would struggle to fill their rosters. The balance of competition, participation, and overall even playing field of collegiate sports is highly at risk. It comes to no surprise that there is a hierarchy of skill in each sport, with that being said and previously stated, there is a major concern on team cohesion from NIL. Players will be jealous of teammates and their deals. Coaches will be forced with tough decisions to make on who gets to play. Player stats may become more important than team success. Education could take a backseat to NIL opportunities, and mental health cases will rise as these young student-athletes will be faced with juggling school, sports, and NIL deals.

Recommendations: ​​

A federal NIL law should create a national, independent, regulatory commission that would be responsible for the law’s initial implementation and the continual monitoring of the national NIL landscape. It should be composed of representatives from educational institutions, intercollegiate athletic organizations, and various student-athletes from a variety of sports, athletic divisions, and athletic conferences. This commission would draft a set of detailed, necessary national NIL standards, and could amend them accordingly. This commission would also be responsible for the enforcement of these provisions and could impose penalties and sanctions on violators. Finally, this commission would be responsible for developing a certification process for the student athletes’ professional representatives.

One of the key tasks of this commission would be to devise a NIL education plan for the NCAA’s member institutions. This educational program would provide student-athletes with information about their NIL rights and responsibilities and would also inform them of the financial aspects and consequences of NIL contracts. This concept was popularized by Florida’s NIL law and would provide student-athletes with educational materials on budgeting, saving, taxes, student loans, financial aid, bank accounts, credit cards, and other various financial devices. Educational institutions could also use these programs to connect student-athletes with financial advisors. The national commission would set the baseline curriculum for these financial literacy programs, and educational institutions could provide additional courses, seminars, and other educational opportunities for their student-athletes. This federal NIL should preempt all existing and future state laws related to a student athlete’s ability to exercise their NIL rights. In order to apply equally to all student-athletes across the country, a single regulatory scheme should be followed. Though many state NIL laws have introduced innovative ideas related to NIL legislation, a federal NIL would be necessary to ensure that student-athletes in each state and across all three divisions receive an equal opportunity to exercise their NIL rights. It is impossible to make NIL equal for everyone, but there is room and possibility to make it fair and just. Given that the NCAA consists of more than 500,000 student-athletes across 1100 member institutions in all fifty states, a comprehensive federal law would be necessary to address the scope of this complex issue.

 

Analysis of recommendation:

With no federal NIL policy in place, if one were to be created there are a couple of simple items that should be a considered a priority. A creation of any form of an federal NIL bill should dictate that student athletes deserve the same economic freedom as U.S. citizens. There shouldn’t be any restraints that make things unfair to limit an individual’s compensation. It is impossible to provide a an equal monetary amount to every college athlete, but the opportunity to maximize one’s potential earning should be fair across all 50-states and all divisions of the NCAA. Said Federal bill should also state that through any collective that free-market opportunities should be restricted to license an individual’s name, image and likenesses. Many college athletes are already at an disadvantage such as ethnic minorities, individual’s coming from low-economic communities, and females. Opportunities should not be dictated by any collective or university, but rather limited due to industry (alcohol, tobacco, university sponsor competitor, etc). One the most important aspects of a potential future federal bill, is policy enforcement and penalties. At the moment, enforcement is not taken seriously due to the non-threating consequences of violating a university policy. A federal bill should outline the penalties for violating a federal NIL policy. These penalties’ could include fines, suspensions, etc. A federal policy enforcer can be implemented at each university. Supposed federal policy should enable all 50 states to have the same restrictions for NIL compensation. Having states with looser laws, as mentioned previously, will affect the landscape of athlete school decisions in recruiting and transfer portal. In addition, allowing individual  states to offer more protection towards the student is available. All agreements “among a collection of more than eight colleges to curtail the right to license one’s name, image and likeness must be treated as a per se violation of antitrust law”(Edelman, n.d.). Lastly, the federal bill should state that no university has the ability to ban a college athlete for not complying with the state’s laws of NIL policies. In the past, NCAA leaders had threated student-athletes and colleges for not complying with previous policies. Suspensions are appropriate instead. As the NIL landscape continues to unfold, it is important that a basic federal template be instituted across all 50 states, without one the landscape of college athletics could change drastically.

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Financial Implications:

The creation of student athletes allowing to capitalize on the monetization of name, image and likenesses has left many to consider the impact that will take place around the university, college sports and much more. There is a general worry with all athletic development departments that donors/supporters may shift some of their philanthropic dollars to individual student athletes, team groups or teams themselves. That could affect their support of the overall program when it comes to scholarships, capital projects and academic support.

Joining college sports opens career opportunities to students that earn profits on their images, names, and likeness. Before fitting in college sports, it is essential to make adequate preparations among families and students about addressing significant concerns such as tax consequences and organizing teams to identify and address non-financial or financial factors associated with different games. Participating in college games is profitable for athletes as long as they provide accurate details of their names, images, and likeness.

College athletes currently have the freedom to engage in other activities such as endorsements, personal appearances, and signing autographs to earn extra money. Their images and names attract companies wanting to market their products and services. Consistency with an individual’s state law is crucial in identifying school locations and using the most influential individuals who add value to the products offered (McCarthy, 2020). However, every opportunity comes with positive and negative impacts whereby college athletes use such platforms to make significant profits from their images and names. The challenge comes with managing the finances, identifying genuine deals, and focusing on athletics despite substantial financial success.

Adequate preparation is crucial before getting involved in any athletics deals to effectively identify the right opportunities and maximize the profits earned from marketability. New athletes also desire to use their names and images to attract endorsements despite not understanding the critical preparations before moving forward in any deal (McCarthy, 2020). Applying the right people for consultation before getting involved in endorsements is crucial in developing adequate preparations for attracting better and more profitable deals. Identifying a genuine value is challenging but signing and collecting checks is easier so long as there is proper guidance from the investors who use the uncertainties to make the best choices in attracting diversity.

For most students, being prepared and following the right investment plans is challenging. Hence, despite earning millions, poor financial decisions promote career downfalls (Kropp, 2021). Organized athletes’ families know how to identify the best management teams that help identify and solve all the financial implications of the investments. Assembling the right teams promotes effective identification of the economic and non-financial aspects that enable the athletes’ best interests regardless of the complexities involved in training them to understand the complexities involved in managing their images, careers, and names in all the influencing deals.

To run successfully, all business procedures follow the proper protocols, including government laws and regulations. Therefore, involving the right investment professionals, risk management teams, and legal and tax analysts is vital in promoting an effective organization that keeps everyone at par with the new ventures (Kropp, 2021). Agents’ primary role is to lead the teams to ensure that the athletes maximize their potential in sports while gaining wealth that helps them inspire others through making the right choices in their investments. Advisors lack proper coordination and cooperation when managing teams because they want to apply individual opinions and decisions in designing the associated costs of managing athletes (Kropp, 2021). Knowing how different professionals charge for services in advance promotes a practical understanding of opportunities and service charges. Assigning agents management roles allows athletes to engage in their business activities while the managers negotiate according to the associated brands and whatever they want to achieve at the end of the deals. Players only pay commissions when they want to purchase disability or insurance products to develop effective plans with their management.

Before signing any deals, college athletes need to make the right choices of agents and seek the best legal representation. Reputable agents contribute to successful contracts because they have enough experience and good backgrounds in managing brands. Finding the proper counsel promotes effective identification, negotiations, and signing deals with potential sponsors who know how to build trust with the athletes and maximize each other’s potential (Bunner, 2021). Before making final decisions, athletes get the best deals from the best advice that guarantees them proper engagement in business and games so long as they develop the best balances suitable for them and their sponsors.

Taxation is a crucial aspect of any business deal because it is a way of earning government revenues and regulating activities. Hence, before creating any investment plans, it is essential to investigate the existing taxation terms and ensure that individuals maximize their potential to make enough money while young despite meeting all the taxation initiatives (Bunner, 2021). Young people, especially at college levels, hardly have proper spending habits because of lacking enough exposure from family members or close people who educate them on maximizing their needs. It is impossible to embrace reasonable financial practices within a short period because of the challenges when coming to terms with the adverse impacts of overspending at a young age.

The provision for students to earn through POV however has not been welcome by colleges and especially the national collegiate athletics association (NCAA), the national body mandated with running of intercollegiate athletics. An interim law allows students to earn from their NIL came after a loss in a court case where the colleges through NCAA sought to continue barring students from earning money from their participation in college spots. One of the key arguments is that when students are allowed to earn from marketing companies, it is estimated that only 1% of college athletes will ever make money from their participation in games (Stanley, 2021). As a result, it raises conflicts and may make college athletics lose the main essence of their arrangements. Therefore, the bottom line of college athletics will be affected immensely from competitive events meant to promote ‘the love of the game’ to a profit based avenues (Bilas, 2022). this creates the fear that the importance of college athletics will be lost.

Though the American college athletics have not been considered a for profit avenue, it is well recognized as a multibillion dollar space. According to Bunner (2020), NCAA’s division I in 2016 resulted I a total of $2 billion in profits. These funds are from sponsors, and TV rights. The revenue is then also used to pay for student’s accommodation and meals during the athletics events. Further, some of the funds are used to offer scholarships to the students. In overall, NCAA does not seek to make profit or retain earnings from athletics. However, the new provision that allows college athletes to earn money causes a complete overhaul of colleges funds that it uses for student scholarships, and in organization for sporting events.

Another impact is that the NCAA may lose some of its revenues. For instance, companies that are seen to have their products displayed during NCAA events or featured in NCAA television programs may opt to use the individual students instead (Bunner, 2020). Also, it is unclear how television rights will be divided between NCAA and the specific student selected for brand marketing. Payout’s from sponsors may be split so that there are some funds going to individual students and others to NCAA. Because of this dilemma, NCAA believes there should be a limit of how much a student athlete can earn from their NIL. Further, since some students are earning some funds, colleges argue that they should cancel off a student’s scholarship if they have some earnings (Bunner, 2020). Though a current interim law bars colleges from implementing this way, colleges insist that scholarship programs are for the vulnerable, and when a student earns from brand endorsements, they should be taken off the program to allow other needy students to be helped. Besides, some of the scholarship funds come from NCAA whose funds are at stake when college student athletes are allowed to earn.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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