The combination of NIL, the transfer window and the increasing domination of a few athletic conferences is a game changer. If we take it all to its logical conclusion, this professionalization of college sports will slowly kill off college football and basketball programs at many universities.
It will also spell the end for the other sports at those same universities, both men’s and women’s, that they subsidize.
That said, in many ways, it’s nice to see more college athletes finally get to share in some of the spoils.
Some kids already were sharing, as many schools had already pushed the envelope in their recruiting practices. But the new financial compensation regime known as “Name, Image, and Likeness” (or “NIL”) deals essentially legitimizes all previous activity. Indeed, there are now incentives for even the cleanest of universities to shift their principles. The booster-financed “NIL Collectives” are forming at many major universities as we speak.
And for amateur athletes attending U.S. universities, there is now a legal way to be paid five, six, even seven figures a season.
More: NIL deals for NCAA athletes: College collectives that pay students are here to stay
Plus: Alabama football coach Nick Saban accuses other schools of ‘buying’ players with name, image and likeness deals
This follows the introduction of a transfer portal, which smooths the process for athletes to seamlessly transfer from one college to the other. Put it all together, and this effectively means that after a year or two, those shining stars at smaller programs will transfer to the schools offering the most attractive NIL packages. Meanwhile, the NIL money will be dangled in front of top high school sophomores and juniors as well. In most cases, they’ll all be sold to the highest bidder.
And as much as I want to see college athletes get paid, I also fear that this new approach is the beginning of the end of the great college game.
When you combine deep-pocketed fans with the lucrative economics of conference expansion, it’s hard to imagine more than a handful of schools getting all the best players.
Then consider the follow-on effects impacting the nonrevenue-generating sports across many campuses. For most universities, football and/or basketball pay all the athletic bills; and if they start dying, so will the other sports.
Meanwhile, with the millions of TV dollars driving the likes of UCLA and USC to join the Big Ten, the idea of college kids in California being paid in NIL deals to fly across the country to the Midwest every other week to expand the TV market sure sounds less like education, and more like the NFL.
More: Say good-bye to the Power 5; it’s now all Big Ten and SEC
Sure, it’s true that many scholastic programs already were mere farm teams for the NFL and NBA, but for the fans, there was still a long and storied history there, keeping us close.
That history included four-year players that led your alma mater to a national championship. A history of your hometown university upsetting the top-ranked team in the country. A history of your local college recruiting players from your own state.
These four-year players, until 1972 – whether in football or basketball – were even forced to sit their freshman season. Can you imagine?
So Kareem Abdul Jabbar, formerly known as Lew Alcindor, did everything he did at UCLA in just three years. So did Pistol Pete Maravich at LSU. And no Bruin or Tiger will ever forget either of them.
But today, the freshmen hoopsters at Kentucky or Duke don’t just get a chance to play — they start. And then they often get drafted. One and done. These programs have become nothing but a staging point for athletes. Not student-athletes. Just athletes.
Kentucky fans will remember Dan Issel and Jamal Mashburn and Antoine Walker. Blue Devils will remember Christian Laettner and Grant Hill and Shane Battier. But the one-and-done guys will be gone tomorrow. The transfer-portal kids will too. The Gen Z fans won’t have anyone to remember.
So the history is eroding. The connection is eroding. And this NIL business might be the nail in the coffin.
“ The bottom line is that the NCAA could have been less greedy and more thoughtful about all this. ”
Back in 2014, in O’Bannon v. NCAA, the U.S. Court of Appeals for the Ninth Circuit affirmed a District Court ruling that the NCAA’s long-held practice of barring payments to athletes violated antitrust laws, and proscribed that schools should be allowed to offer not just scholarships to athletes, but cover cost of living expenses as well as much as $5,000 in trust for each athlete per year of eligibility.
In 2019 the same District Court ruled that the NCAA should allow students to obtain other non-cash scholarships and other support beyond the full-cost of attendance, but so long as they were for academic purposes. Then last year, in the Alston decision, the Supreme Court ruled that the NCAA’s “restriction on education-related benefits” violated antitrust law.
In the words of concurring Justice Brett Kavanaugh, “nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate.”
And it’s a good point. So here we are.
The bottom line is that the NCAA could have been less greedy and more thoughtful about all this, and headed it off at the pass years ago. There didn’t need to be any Supreme Court cases.
The NCAA very simply could have shared in the spoils earlier, and in a way that promoted amateur athletics without ripping off the kids providing the highlights. Student athletes have been complaining about this for a long, long time. Some will remember the very complicated Chris Webber story. He was part of the vaunted Fab Five basketball team at the University of Michigan (nearly 30 years ago), and was very vocal about not getting what was his. The Fab Five changed the game. They changed what we wore. They changed how we played. And when the videogame companies used their names and images, precisely none of that money went to the players. At least one of the Fab 5 didn’t think this was fair.
A Michigan booster had been paying Chris (and a lot of other kids) a little money since the 8th grade, and Webber was completely fine with taking larger “loans” from that same booster when he was at U of M. Those loans ultimately took down the entire program, where not only was the university forced to retroactively forfeit its 1992-93 season, but the Michigan High School Athletic Association recommended that Detroit Country Day forfeit the three Michigan High School State Championships it won under Webber.
They didn’t end up doing it, but they sure considered it.
Under NIL, all that stuff would have been fine. And maybe that’s okay. But there could have been a better way.
The NCAA and the relevant conferences could have put their heads together and created an image and rights business that retained some percentage of proceeds in a pool. Then – at the end of a season – a group of agents, ad execs and administrators could objectively select the universities, and then the players, that would share in the pool. Based on jersey sales, YouTube views, videogame naming rights and whatever else brings in the big bucks. It would then just be down to assigning fair percentages to each qualifying player, and the selections would happen at the end of the season, not the beginning.
That way, the money wouldn’t be the specific reason a “student” went to college, but it would be a fair way to share some of the economics with the actual people generating them.
Sure, the NCAA might argue that the institution itself – and indeed the framework of the college game – is something it created. And they’d have some points. But this is an entertainment business, and all the spoils don’t go to the owners in the entertainment business.
It is a question of degree. It takes a ton of people to make a blockbuster movie, but how much of the “Top Gun” proceeds should Tom Cruise earn? What percentage of concert ticket sales should the Rolling Stones capture? Should the NCAA and various conferences share in 80% of NIL revenue, and the actual athletes share in 20%? Maybe 60%/40%? Maybe 50/50? Maybe less?
And what about TV revenue? In 1984, the Supreme Court ruled that the NCAA could not prevent the schools or their conferences from negotiating their own TV rights, and collecting the proceeds. And these broadcast license fees are the honeypot. Should conference administrators and universities get all of that? Should the athletes get any?
One thing I’m fairly confident of is that the split shouldn’t be 100%/0%. But that’s what it had been, and for much too long. That’s why the dam finally broke.
It’s also why without a complete rethink of the NIL framework and a subsequent de-professionalization of college sports, these beautiful games of college basketball and football may eventually be flooded with indifference.
Drew Dickson is the chief investment officer of Albert Bridge Capital, a Purdue Boilermaker and a fan of college sports.
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