Future of NIL could include college athletes as employees
The one-year anniversary of Name, Image and Likeness has brought more attention to the riches that flow through college athletics.
On Thursday, USC and UCLA shocked college sports by announcing their departure from the Pac-12 to the Big Ten, effective Aug. 2, 2024. It was a pure money grab. Both schools made $20 million in media rights revenue in the Pac-12 in 2021. Based on Big Ten revenue projections, the two schools could make upwards of $100 million apiece when they join the conference in 2024.
Student-athletes and their families are certainly paying attention. The fight for NIL rights centered on the amount of money college athletes generate for schools for what was essentially – other than room, books and scholarship money – free labor. It resulted in the California Fair Pay for Play Act passing in 2019, state legislation that gave college athletes NIL rights. Other states soon followed with their own similar laws.
What’s next? To date, college athletes are still not classified as employees. In February, the National College Players Association filed unfair labor practice charges with the National Labor Relations Board against the NCAA office, the Pac-12 Conference and USC and UCLA as single and joint employers of FBS football players and Division I men’s and women’s basketball players.
There also is the Johnson vs. NCAA case filed by six NCAA athletes led by former Villanova football player Trey Johnson, which will answer, “whether NCAA Division I student athletes can be employees of the colleges and universities they attend for purposes of the Fair Labor Standards Act, solely by virtue of their participation in interscholastic athletics.”
Kansas City-based sports law attorney and NIL expert Mit Winter said the NCAA tried to get the case dismissed, but it is currently in the third circuit court of appeals. The current precedent is Dawson vs. NCAA, a ninth circuit court of appeals decision that ruled student athletes were not employees of the NCAA or their athletic conference because the NCAA is more akin to a regulator than an employer.
“If the third circuit agrees with the lower court on that, it would set up — it’s called a circuit split, where one circuit says one thing and a different circuit says a different thing,” Winter said. “In a situation like that, that’s when a case is lofted to the Supreme Court, so the Supreme Court can settle that issue for the entire United States.”
Mindful of more potential litigation, the NCAA Division I Transformation Committee, which includes Southeastern Conference commissioner Greg Sankey and Ohio athletic director Julie Cromer, is in the process of transforming the organization into one more aware of modern student-athlete needs, ranging from academic support to mental health.
“The opportunity of this committee is to get in front of what’s next,” Cromer said. “I think that has been a critical focus that gets lost a little bit in NIL, the transfer activity that’s happening or other pending issues in college athletics. Now is the time where we have to turn our thinking upside down. We have to learn from these lessons that NIL has painfully taught us and be ready to be responsive.”
That includes parsing down an outdated, oversized rulebook.
“One of the observations made early on from the University presidents is we’re very good at making rules. We’re not good at removing rules,” Sankey said. “We’re trying to improve our performance at removing rules but with a rationale and basis. We’re still going to expect compliance. There’s going to be expectations for meeting standards, but there are going to be more decisions at the campus level that can be compliance as well.”
Florida-based sports attorney Darren Heitner has remained engaged in the NIL debate since its inception one year ago. He continues to lend his voice and expertise in sports law to student-athletes and organizations.
A year in, Heitner’s encouraged by the opportunities now afforded to student-athletes, although work remains to ensure they’re educated properly about the new challenges that accompany NIL payouts, such as having to pay taxes on money they’ve earned.
“We’ve seen over a year, athletes in every sport, every gender, every race, revenue and non-revenue – Divisions I, II and III – every athlete have these opportunities and engage in these types of NIL transactions,” Heitner said. “I think that there’s a lot of learning over the past year. There’s a lot that can be done to educate athletes.”
Heitner thinks the next development to monitor is enforcement at the state level. Congress has repeatedly turned down invitations from the NCAA to insert itself into establishing sweeping guidelines pertaining to NIL.
“What I think will be interesting to follow over the next year, is after a year of zero enforcement by the NCAA, we now see the (NCAA) decide to try to enforce its rules, especially after it announced its guidance,” Heitner said. “Will we see more states go the route of Alabama and repeal their NIL laws altogether because they’re more restrictive than what the NCAA provides?”
After Thursday’s announcement USC and UCLA will leave the Pac-12 for the Big Ten, the reality of a two-league college sports landscape in the future became even more of a possibility. The SEC will extend its footprint in 2025, adding Texas and Oklahoma to its list of members, which will give the Big Ten and the SE each 16 teams. The possibility of two super conferences – Big Ten and SEC – emerging would consolidate power and weaken the NCAA’s influence, which could give the two conferences the ability to create NIL guidelines and rules for their student-athletes across the board.
“It is possible that we could get a Power 2 and that they come together and say, ‘We don’t really need the NCAA anymore,’ and decide specific rules within their respective conferences,” Heitner said. “That could actually benefit the athletes quite a lot if they feel compelled to try to put more beneficial terms in place for the athletes and compete against each other in such a regard.”
One of the biggest debates one year into the NIL era is the lack of uniformity across the board when it comes to remaining within the loosely established guidelines. Some coaches and administrators have been vocal about the issue, but the NCAA and its thinly stretched staff haven’t done much beyond approving new NIL guidelines in May.
“I think there’s a general feeling that some schools’ boosters and collectives that don’t pay attention to the rules are benefitting, whereas those that are actually following the rules are not,” Heitner said. “So I do think that you’ll see a bit more involvement from a policy-making standpoint, an enforcement standpoint, by certain schools over the next year.”