The Destruction of the NCAA’s Amateur Model

For decades, the NCAA has been staunch about its amateur model in collegiate athletics. This has prevented student-athletes from getting compensated for their play and performances which helps bring in billions of dollars each year to universities around the country. With the NCAA’s strong stance against athletes getting fairly compensated for what they provide their schools, the NCAA at times has levied some strong sanctions against those who violate it. A famous example of this is when Reggie Bush got his Heisman Trophy revoked because the NCAA found out the premier running back had been receiving money while he played at USC. Recently, Reggie Bush got his Heisman Trophy back since the college landscape has started to shift toward a professional model with the new introduction of NIL compensation.

College athletes were first able to capitalize and monetize their name, image, and likeness when the NCAA approved a policy back in June 2021. With college athletic stardom at an all-time high because of social media, the NCAA had little choice and signed this policy against their will of keeping college athletes purely unpaid. However, with the NCAA bringing in about $1.3 billion annually from the hard work of college athletes, it seemed completely unfair that athletes couldn’t get paid for putting in upwards of 40 hours a week of working on their sport. However, recently with the birth of NIL, they were able to disguise money paid to players in the form of “sponsorships” through the NIL system. Now, universities with big pockets could, in essence, sign anyone they wanted to multi-million dollar NIL deals to grab the best talent for their teams. The NCAA was unable to control any of these NIL deals due to its unwillingness to shift college athletics toward a true professional model. With the NCAA’s lack of coherent policies toward NIL deals and paying student-athletes, the NCAA was left completely unprepared to handle the type of money universities would be paying athletes.

This past week, the NCAA suffered what is likely to be the fatal blow to the amateur model by settling a landmark court case known as House v. NCAA. This was an anti-trust class-action lawsuit against the NCAA that stated that the NCAA had been forbidding the fair compensation of college athletes for years from their NIL benefits but then started allowing it in 2021. Therefore, the NCAA agreed last week to a $2.8 billion settlement to be paid out to athletes who over the past 10 years didn’t receive any NIL monetization benefits while they were in college. Moreover, as part of the settlement, the NCAA agreed to start letting players revenue-share in the university’s athletic revenues. The revenue-sharing for each university allows them to pay up to $21 million for athletes attending any Power Five Conference university. This money can be paid directly to its student-athletes, but it does cause several concerns as to how this will be implemented.

One of the top concerns of this new revenue-sharing policy is how this direct payment of players will be carried out in a way that doesn’t violate Title IX. With the majority of a college department’s money coming from football and men’s basketball, you’d expect them to get paid the most money. However, this could easily land a university in a heap of trouble violating Title IX since those are both men's sports. Therefore, I would expect that big-time football and basketball players will primarily get paid through NIL with a smaller amount paid directly through revenue sharing. That way more athletes throughout the athletic department can get paid while also staying within the bounds of Title IX. However, this also presents another problem that universities still haven’t addressed, which is helping these young college athletes manage these large sums of money. The introduction of NIL, and now revenue-sharing, is going to be putting millions of dollars in the hands of young adults and the NCAA hasn’t created a policy or agency to help these young student-athletes proactively manage their finances yet. If the NCAA or its universities don’t create a system to manage the large sums of money given to athletes, then it wouldn’t be surprising to see more college athletes get into trouble with the law.

Although the actual implementation of a professional model in college athletics is currently unclear, significant change is certainly coming. Over the past few years, the NCAA has done a terrible job of governing and regulating what goes on in college athletics because of its unwillingness to adapt to the times. This has resulted in a lot of uncertainty for college programs to deal with including the shifts to NIL, transfer portals, and a professional model for paying college athletes. Hopefully, this past court settlement will cause the NCAA to shift gears and create policies to help schools and their athletes manage the large market for college sports. The athletes have dedicated so much time to their sport on top of their busy school schedule, and now with this shift in college athletics to a professional model, they can finally get the compensation that they rightfully deserve.