NCAA Votes for Athlete Payment

The National Collegiate Athletic Association's governing board votes to allow college athletes to be compensated in third-party sponsorship deals.

October 30, 2019
 

The National Collegiate Athletic Association will allow college athletes to profit from their name, image and likeness, a decision that appears to diverge from the association’s long-held standard of amateurism in college sports.

The NCAA Board of Governors voted unanimously Tuesday to direct the association’s three divisions to “modernize” their rules and allow athletes to enter into contracts with corporations and other parties to receive compensation for their personal brand or celebrity. However, the association made clear that any changes must be “consistent with the collegiate model” and ensure college athletes do not become employees of the university. 

The decision came after months of accelerating pressure on the NCAA from state and federal legislators. More than a dozen states and two U.S. congressmen began to discuss bills this year to overrule the association’s governance -- the NCAA currently bars athletes from competition if they are found to be benefiting from their name, image or likeness.

Michael V. Drake, chairman of the NCAA's Board of Governors and president of Ohio State University, told the Associated Press that the NCAA is hoping to avoid legal battles in the federal courts on “pay for play” legislation if state and federal bills become law. Through such laws, politicians could make it illegal for the NCAA to ban players from competition if they receive financial compensation.

“We must embrace change to provide the best possible experience for college athletes,” Drake said in a statement after Tuesday’s vote. “Additional flexibility in this area can and must continue to support college sports as a part of higher education.”

The biggest push came from California in late September, when Governor Gavin Newsom signed the Fair Pay for Play Act into law. Though the law will not go into effect until 2023, politicians in other states hope to push through legislation that is implemented earlier.

The NCAA has long drawn a line between collegiate and professional sports by upholding its definition of amateurism and disallowing payment to athletes, other than in the form of colleges paying for the full cost of attendance or providing other types of scholarships. But the association began to ease its opposition and created a working group in May to explore how it could adjust bylaws to allow athletes to be compensated while maintaining “its belief that student-athletes are students first.”

The NCAA is acting fast, threatened by legislation that seeks to do away with all rules for athlete compensation that would destroy its business model and subject the association to antitrust and labor laws, ESPN reported. Some proposals do not suggest any limitations on payment, such as a bill introduced earlier this year by U.S. representative Mark Walker, a Republican from North Carolina. Walker suggested that the NCAA’s tax-exempt status should be revoked if it does not allow players to be paid by third parties, and he did not offer any guardrails in the bill that ensure athletes are “students first.”

On the other hand, U.S. representative Anthony Gonzalez, a Republican from Ohio who played football for Ohio State, would like to craft legislation while engaging in discussions with the NCAA on measures to maintain the line between college and professional athletics. Gonzalez plans to continue pursuing federal legislation on the name, image and likeness issue, he said in a statement.

“I look forward to continuing to work alongside coaches, players, universities and the NCAA to ensure there is one consistent, nationwide policy on this issue and that appropriate guardrails are met to protect college athletes from bad actors and maintain the collegiate environment that makes college sports so special,” Gonzalez said.

Senator Richard Burr, a Republican from North Carolina, said if the NCAA allows college athletes to be paid through sponsorships, he would introduce a bill that subjects athletes' scholarships to income taxes. He said the legislation would apply to athletes who decide to participate in third-party compensation.

The Federal and State Legislation Working Group delivered its recommendations to the Board of Governors on Tuesday -- the recommendations include eight principles for division leadership to follow as changes are drafted -- and will continue its work through April 2020, according to a release from the NCAA. Division bylaws must be updated no later than January 2021.

The eight guidelines uphold the NCAA’s priority to ensure college athletes are not elevated to the status of professionals within their universities. According to the NCAA, bylaws must enforce that schools treat athletes similarly to students who are not athletes with limited exceptions, prioritize academics and prohibit schools from directly paying college athletes for use of their name, image and likeness. While athletes can enter into contracts for merchandise and endorsements, they cannot be paid for participation or performance of their collegiate sport, the guidelines say.

Divisions will need to be transparent about rule changes and uphold diversity and gender equality, and there must be a distinction made between college-level and professional payment opportunities, the NCAA stated.

The guidelines also state that bylaws should “protect the recruiting environment” from being corrupted by third parties -- players cannot be coerced into attending or transferring institutions for a sponsorship. This is intended to address concern among college athletics leaders and personnel who believe allowing athletes to benefit from their name, image and likeness would welcome into collegiate athletics nefarious agents or company representatives who could take advantage of players.

“As a national governing body, the NCAA is uniquely positioned to modify its rules to ensure fairness and a level playing field for student-athletes,” NCAA president Mark Emmert said in a statement. “The board’s action today creates a path to enhance opportunities for student-athletes while ensuring they compete against students and not professionals.”

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