NIL CHAOS AND THE PERSISTENCE OF CARTEL THINKING AMONG COLLEGE PRESIDENTS AND ATHLETIC DIRECTORS
Steve Ross (Law)
Law Professor Steve Ross identifies undue booster influence as a major and distorting aspect of the new “NIL” landscape for college sports, and bemoans the lack of advocacy for sound legislation by college academic and athletic leaders who continue to seek consensus among diverse institutions.
For years, college academic and athletic leaders persisted in the claim that allowing college athletes to profit from the high value that fans and sponsors placed on their names, images, and likenesses (NIL) would ruin intercollegiate sports by eviscerating the wall of separation between “amateur” and “professional” sports. An award-winning brief by our colleague Ron Smith and other noted sports historians, cited with approval by the Supreme Court in NCAA v. Alston, demolished this myth of amateurism.
Anticipating the need for some reform, NCAA leaders established a committee with genuine expertise to propose new NIL regulations, chaired by the legendary Big East Commissioner (and founding WNBA President) Val Ackerman. Her committee continued the NCAA’s historic focus on cartel management, focusing largely on concerns that income from NIL licensing could be a significant factor in recruiting. It recommended significant limits on how colleges could jointly license rights to sponsors, which is the model for the majority of income major league athletes receive through NIL licensing. However, Ackerman’s committee included the sensible requirement that, to keep control of the basic principle that our colleague Doug Allen has articulated – “Pay for Publicity, not Pay for Play” – that NIL income would have to be pursuant to a written contract filed with an independent clearing house.
Unfortunately, after the Supreme Court’s decision made it clear that the substantive restrictions would not be tolerated under the antitrust laws, the NCAA literally took its ball and went home. The result is chaos that only a revolutionary seeking to demolish the entire system of college athletics can welcome.
Even principled opponents to any limits on the commercialization of college athletics find it hard to justify a system where athletes go to the highest bidders, not defined (as in professional sports) as those who value their talents most highly, but to reward those programs who have the most committed boosters and university officials most willing to compromise their institutional control to a handful of wealthy alumni. It remains to be seen how these officials will respond when athletes face academic or personal conduct sanctions, or even coach discipline, after a booster arranged for them to be paid sums far in excess of any plausible economic value for their NIL rights.
Doug Allen and I developed, with two other sports law professors, proposed legislation that would allow the commercialization of NIL rights but also provide an effective means to ensure that compensation is limited to fair market value for these rights. This is not that difficult to enforce. Australian professional sports commonly identify and punish clubs and ‘boosters’ who evade their salary cap by underpaying stars who are then paid more than they deserve for NIL rights; this happens occasionally in the NBA as well. If AT&T is willing to pay Nick Singleton $5000 for 10 meet-and-greets to sell mobile phones, then if a local booster wants to pay Kaytron Allen $5000 for 10 meet-and-greets at a car dealership, there is no concern about undue influence.
Unfortunately, legislation has gone nowhere, because the cartel mindset requiring consensus precludes most college leaders advocating for sound laws that would meet both their own ethical standards and their own institution’s interests. Penn State’s interests are not those of most SEC teams, most Big-12 teams, or weaker programs in the Big Ten. Even today, amidst the chaos, leaders seem committed to working for a consensus within their conferences. There is, however, no scheme to make all 65 Power 5 programs happy: the cartel arrangement is doomed to failure.
You can view the webinar on this topic here.
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