By: Zack Ericksen
Introduction
Imagine going to work just to find out you won’t get paid. Until the Supreme Court’s ruling in NCAA v Alston, “the NCAA and its member colleges were suppressing the pay of student athletes who collectively generate billions of dollars in revenues for colleges every year. Those enormous sums of money flowed seemingly to everyone except the student athletes.”1 Many felt that student athletes worked without appropriate compensation.
Although this court case appears to only be benefiting student athletes, universities should act diligently to maximize opportunities for student athlete to collect as much money as possible. To understand why this benefits individual universities, an analysis of NCAA v Alston and an analysis of how student athletes affect university success is essential.
Understanding the Court Case
NCAA v Alston ruled that the NCAA previously was violating anti-trust laws and that appropriate compensation for student athletes’ financial impact was necessary.
Previous NCAA Rules
Before the NCAA v Alston legislation, John DeGioia (chairman of the NCAA Board of Commission) and the NCAA Board of Governors declared that before competing collegiately, student athletes enrolling at a Division I school can use their name, image, or likeness to promote companies given they don’t receive any compensation. Current Division I athletes are restricted from promoting their own companies even if the business is not related to athletics.2
To exemplify the absurdity of this rule, imagine if a young athlete potentially wanted to compete in a Division I sport. They could not promote any company for money no matter what age. How does an athlete know if they want to compete in college or if they will be good enough? The simple answer is they can’t. As ridiculous as this sounds, the previous NCAA rulings required them to plan as if they would compete.
Athlete Financial Contribution
Financial statements of the National College Athletic Association (NCAA) show that student athletes generated nearly $19 billion in the year 2019.3 Figure 1 shows that although student athletes generated billions in revenue, they only see a meager 12.5% of the money through scholarships and other means.
Student athletes received just 12.5% of the $18.9 billion they generated in 2019. -NCAA Financial Statement Without student athletes, the NCAA would have $0 in revenue.
Because expenses exist, student athletes don’t deserve all the money, but they deserve more than 12.5%.
Implications of the legislation
NCAA v Alston and other previous court cases demonstrate the unjust circumstance that existed in the NCAA. Through the court ruling on July 2021, student athletes can enter into agreements and make a profit by using their name, image, or likeness (NIL). The inequality from the past can now be corrected.
Although student athletes can’t receive money directly from their university, they can accept help in creating NIL deals. Neil Gorsuch, an associate justice of the Supreme Court of the United States (nominated by Donald Trump), explains that according to the National Collegiate Athletic Association v. Alston, the NCAA has hidden behind the regulation that collegiate athletes must be amateurs for a long time to avoid anti-trust issues. Recent findings indicate that the NCAA has violated antitrust laws with corrective actions being taken.4
The NCAA v Alston legislation not only influences student athletes financial ability but allows for improvement in both their academic and athletic performance. Since student athletes’ success enhances university success, universities should set up programs helping student athletes capitalize on the new court rulings.
Student Athlete Success = University Success
Although some believe that student athletes diminish a university’s success, studies show that as student athletes’ success, the entire university follows suit. Nicole Grimit, a researcher at South Dakota State University, published in the Journal of Undergraduate Research an article saying, “as student athletes balance both athletics and academics, the quality of the university improves.” 5
How student athletes influence university success:
1. Student athletes generated $19 billion in revenue6 and over $1 billion profit from TV contracts.7 Some of the money that the NCAA makes goes to each university based off performance level.
2. The branding and marketability of the university is increased. This can be explained by the following: First, as a school succeeds in sports, the school is mentioned in conversation more often. The mention of the name increases the likelihood of other students enrolling at their school. Second, as sports succeed, better athletes enroll at their school creating a more successful program. Third, as the university is mentioned more, companies are more likely to create meaningful contracts and sponsorships with the university.
3. The overall campus atmosphere increases with the sports team success. Teachers and students, whether they enjoy sports or not, enjoy the unity created by winning and supporting. Everyone likes winning.
Because of the impact student athletes have on the university, athletic directors, with the support of the university president, should lead the effort in helping student athletes maximize opportunities from NCAA v Alston. The first step is to hire an NIL specialist to meet with student athletes.
NIL Specialist
An NIL specialist’s main job is to actively seek opportunities for student athletes to use their name, image, or likeness to promote a company in exchange for some form of compensation, which is generally cash or access to products of the company. Although an NIL specialist is not necessary to create deals, NIL specialists can verify that the deals are NCAA approved. Additionally, companies have a resource at the university to connect with student athletes. NIL specialists have helped monitor NIL deals as big as Zaxby’s offer to JT Daniels, quarterback at University of Georgia, of about $1 million value. 8 NIL specialists also help many athletes receive smaller NIL deals.
How NIL Deals Affect Student Athletes
A major component of an NIL deal is the financial impact on student athletes. These implications affect their academic and athletic performance of these students.
Increased Academic Performance in the NCAA
Another key reason to hire an NIL specialist is because NIL deals impact academic performance. Since the legislation occurred this previous summer, student athletes have commented on decreased financial stress. Currently, student athletes have an average GPA of 2.84. Sports psychologist Alexandra Pecharich, from Florida International University, believes that the GPA will increase by approximately 6% in the first year.9 Figure 2 shows the 6% increase from 2.84 to 3.01. Decreased financial stress allows student athletes to focus more on learning and earning good grades.
Statistical evidence has yet to be found as a full semester has not been completed to compare grades of student athletes before and after NIL deals. As the court case withstands the test of time, results will show if there is an increase in average GPA for the student athletes with NIL deals. Although a causation cannot be declared, a high correlation between decreased financial stress and academic grades occurs.
Increased Athletic Performance in the NCAA
Not only does the NIL legislation impact grades, but it also implies huge improvements on college sports. Many athletes who would have signed professional contracts before finishing college have decided to stay. I interviewed twotime cross country national champion Conner Mantz, who also competed in the 2020 Olympic Trials. He had offers to run professionally but rejected them knowing that he could continue competing in college and make money off his name, image, and likeness. Other athletes fall into similar categories.
As the best individuals at each school decide to stay, those universities are more likely to see a cycle of continual improvement. The culture of success is further developed by the best athletes continuing to compete. Both the school, and the NCAA collectively, becomes more competitive. Through this process, the athletes will continue to improve quicker than if the best individuals left college to compete professionally.
Additionally, as the university’s athletics improve through NIL deals, the ability to recruit high performing athletes also increases. The recruits not only see a high performing team, but also a team that gives them the opportunity to promote themselves and create more personal value. As high performing athletes are recruited and compete for the university, the university’s team improves. The cycle of success is recreated by this method.
The cycle shows why the same teams, year after year, are talked about as being the favorites to win a national championship, or to compete at the national meet. If a university’s athletic program is successful, NIL deals can maintain the cycle. However, if a university’s athletic program is not successful, NIL deals may help break the cycle by recruiting and maintaining better athletes.
Right the Wrong
Despite the unfairness in previous times, the new NIL regulation help student athletes receive compensation for the work they perform. Such compensation will help student athletes succeed in the classroom and in their sport. Universities will see the effects of their student athletes’ success.
Conclusion
The NCAA v Alston ruling provides student athletes with opportunities to profit off their name, image, and likeness. As student athletes succeed, universities follow likewise. University leaders should focus on helping student athletes succeed. With programs helping athletes with NIL deals, university academic and athletic performances will increase.
Notes
NOTES:
1. Neil Gorsuch, National Collegiate Athletic Assn. v. Alston, (Supreme Court of the United States, 2021), 13.
2. John DeGioia, Federal and State Legislation Working Group Final Report and Recommendations. (NCAA Board of Commissions, 2020), 13.
3. “Finances of Intercollege Athletics” NCAA Financial Records, accessed November 2, 2021, https://www.ncaa.org/about/resources/research/finances-intercollegiateathletics.
4. Neil Gorsuch, NCAA v. Alston, 37.
5. Nicole Grimit, Effects of Student Athletics on Academic Performance. (The Journal of Undergraduate Research, 2014), 41
6. NCAA, “Finances.”
7. Christina Gough, Revenue of the NCAA from TV broadcast payments from 2010-2025 (Statista, 2021).
8. Mike Griffiths, DawgNation, (DawgNation Twitter 2021).
9. Alexandra Pecharich, Compensation for Student-Athletes? (Florida International University, 2021), 3.
