Chaos and Questions for the De-Fanged NCAA

So many “experts” and sports aficionados insist that paying college athletes in any way was some moral turpitude, so it was not surprising that they saw the Supreme Court’s recent ruling as untenable. Specifically, the notion that college student athletes might capitalize on their fame was purported to be the beginning of chaos.

Such fears were right in one sense, because two weeks ago the Court basically blew up the NCAA and the shrapnel is still landing. But all the ruling did was expose how unstable the NCAA was as it pretended to be one thing when it was actually something else. Justice Brett Kavanaugh lays it out quite clearly

The NCAA couches its arguments for not paying student athletes in innocuous labels . But the labels cannot disguise the reality: The NCAA’s business model would be flatly illegal in almost any other industry in America. All of the restaurants in a region cannot come together to cut cooks’ wages on the theory that “customers prefer” to eat food from low-paid cooks . . . Hospitals cannot agree to cap nurses’ income in order to create a “purer” form of helping the sick. News organizations cannot join forces to curtail pay to reporters to preserve a “tradition” of public-minded journalism. Movie studios cannot collude to slash benefits to camera crews to kindle a “spirit of amateurism” in Hollywood.

Pretty clear: Quit cheating your employees by pretending they are not employees in the multi-billion-dollar industry that college sports has become. Don’t claim that a football player getting three hots and a cot and a degree in “exercise science” is fair compensation when you’re raking in hundreds of millions of dollars from their work.

Of course, no one knows precisely how much college athletics will change as a result of this ruling (and subsequent rulings based on this one), but it’s likely that many if not all college sports will have to be torn down and rebuilt at some point. The NCAA oligopoly previously imposed order on the collegiate athletic system, but now no one—not the NCAA, not the student—athletes, not the state or federal governments, nor the court system—knows who is in charge. Some new, non-exploitative system will have to be devised to determine who gets how much of the business.

ESPN commentator Paul Finebaum encapsulated the hands-off approach the NCAA is taking to its own gotterdammerung:

Today is the most significant day in the history of the NCAA and that’s not an understatement . . . the model of the NCAA is coming down and you can never put it back up again. The fact that the NCAA is really worthless after today is also a very significant moment. . . The only people who don’t seem to have a clue on July 1, 2021 are the people who are in charge of this and that’s the NCAA.

Since the NCAA has basically decided to punt (pardon the expression), how a student is able to get product endorsement from deals that come their way based on their name, image, and likeness (NIL) depends on what school they go to, what state they live in, what conference the school plays in, and maybe whether the coach is fine with their athletes having deals with anyone other than them.

Schools are scrambling to craft policies which they realize might be outdated in a few months. Agents and business influencers are moving in, and most troubling of all, no one exactly knows who is supposed to enforce any of it—or how.

“They’re racing. They’re in a tough spot and are trying to come up with rules on the fly and it’s difficult to do,” said Michael McCann, the director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law, who recently testified in front of Congress about NIL “Normally when people or groups try to race to get legal documents drafted, it’s not ideal.”

The generals are still fighting the last war. With endorsement deals now legal for student-athletes, many commentators and analysts seem to have in mind a football player shooting commercials for Nike after or for a basketball star signing autographs for cash.

Yes, these kinds of deals will now happen more than they did before, but they are not representative of where most of the money will be flowing once the scope of permissible NIL deals is clarified. Instead, look to the Cavinder twins, Hanna and Haley.

The Cavinder twins are junior guards on the Fresno State University women’s basketball team in the Mountain West Conference. Last season, Haley Cavinder was the conference player of the year, with 19.8 points per game along with 7.5 rebounds and 3.8 assists. Hanna Cavinder was third in the conference in scoring, averaging 17 points, 3.6 rebounds and 3.9 assists per game.

What put these sisters into the new college sports money grab spot was simple: They were bored and looking how to kill time during the COVID-19 lockdown, so they decided to have some fun on TikTok and other social media. “We thought, why not start dribbling basketballs to a beat and our audience or whoever saw it and loved it,” Haley Cavinder explained earlier this year. “We continued to make those videos and it kind of grew from there.”

The sisters became a social media success with more than 5 million followers. Businesses know that that many followers can translate into economic value (some estimate that each follower is worth 80 cents in market value). This week, under the NIL rule changes being brought about, the 20-year-old Cavinder sisters signed deals with Boost Mobile and Six Star nutrition. Boost took out billboard space in Times Square to celebrate the milestone.

What the Cavinder twins’ deals mean is that endorsement cash for college athletes will not be restricted just SEC football stars. A recent study found that the money will be spread around to athletes in lower ladder rungs of college sports, too.

In many ways, the changes in the college sports market will repeat what Olympic athletes experienced when the games dropped their amateurism requirement. American Olympic skier Mikaela Shiffrin earns more than $3 million in annual endorsements and swimmer Katie Ledecky signed a $7 million deal with TYR Sport. Under the new NIL rules, it is estimated that a collegiate women’s gymnast could bring in an estimated $466,000 annually, $400,000 for a star football quarterback, a mid-level men’s basketball player at $100,000 a year, a women’s college volleyball star at $76,000 and a women’s’ softball player getting $63,000 a year.

Charles Barkley speculated how sums like that could disrupt team dynamics:

What really bothers me and scares me about the whole scenario, there’s going to be so much resentment from other teammates. They’ll be like, ‘Damn, Charles is selling jerseys. He’s got a car deal. We work just as hard as him.’ Same thing with Bo Jackson. The offensive lineman—he opens up all the holes for Bo Jackson. Bo Jackson is making all this money and the offensive lineman who has to do all the work is not making a dime, I think there’s gonna be great resentment and jealousy on these teams.

And it’s not just the teams who might want to consider restrictions on outside earnings.

There are several issues to keep an eye on. The states are already playing the NIL interpretation game. A total of 26 states have passed bills defining what college athletes’ endorsements are and can be, 14 states have bills that have been introduced but still in committee, and ten have none so far (expect that number to be closer to zero soon).

Many are looking to the federal government to set up regulations for the athletes and teams. Seven bills have been introduced in Congress, which might amount to nothing, or might result in federal regulation of college sports, which is already major interstate commerce.

Beyond endorsement deals, will college athletes now earn salaries? Some have suggested that fair compensation for college football players would be room, board, and education, plus about $50,000 a year in salary. Would schools find it advantageous—for team cohesion, or more pecuniary reasons—to offer salaries in exchange for a prohibition on their student-athlete-employees signing independent endorsement deals?

And what of recruiting? In the old days of pretending the players played just for the love of the game, the big-time schools tended to be located away from major cities. A star football player from Chicago might dream of playing in Tuscaloosa; a basketball player from Los Angeles might ply his craft in Lawrence, Kansas;, a top softball player from Pittsburgh might relocate to Norman, Oklahoma.

Will big schools in small cities be outbid for star players when smaller schools in big cities can offer bigger endorsement deals because of their larger regional populations? Who would you keep private businesses and agents out of the recruitment process, and how?

This much is known: College sports have become very profitable, mostly due to remunerative TV deals, and the interests of those aligned with college sports in that realm—from viewers to advertisers to sports media to the schools themselves—will make sure those revenue streams persist. That means passing laws that give the players some money, but not too much.

The courts will continue to be involved, likely at the state and federal level, and they may at times pull in opposite directions.NCAA President Mark Emmert could see this coming a few years ago when he spoke about the state vs. national conflicts in NIL reforms. “We simply can’t have a national athletic association in charge of national tournaments and national championships if each state creates its own. . . law,” he said.

Then again, the courts peel back the skin and get to the relevant issues of what can and can’t be done. “Everyone agrees,” Justice Kavanaugh wrote, “that the NCAA can require student athletes to be enrolled students in good standing. But the NCAA’s business model of using unpaid student athletes to generate billions of dollars in revenue for the colleges raises serious questions under the antitrust laws.”

Those questions are only multiplying.