NIL: NCAA changing its mind?
Unclear in this NY Times article if the NCAA is leading from behind or actually seeking a cohesive strategy.
At least the article discusses many of the issues.
Even there though, accuracy is suspect. Yesterday the Board was discussing the 75% redistribution tax Georgia proposed to charge athletes who could take advantage of NIL. The article waters that down to Georgia "allows" a set-up where "players can sometimes be compelled to share portions of their income with other athletes."
https://www.nytimes.com/2021/05/08/sports/ncaabasketball/ncaa-endorsements-mark-emmert.html
They kinda have to. The state laws have forced their hand to make NIL a reality. But as the article says, their proposed NIL guidelines don’t go as far as some state laws do so really for fairness sake, you would need a national law that applies to all states
And the NCAA would have immensely more control over the whole process if they just relaxed their bylaws. It's not like the NCAA is a government agency; all of these state laws are just designed to override NCAA's private rules. If they had taken a more forward-thinking approach they wouldn't be in this mess wherein a bunch of states are going to have conflicting laws and the NCAA and member schools will be the ones having to deal with them on 50 fronts instead of one.
You miss the entire point.
Georgia decided to do some confiscation redistribution of the NIL income. The NCAA noticed and thought “how about we skim off the top before the redistribution guys get their cut?”
By the tine all the parasites get a piece there will not be enough for the athletes to buy a pizza.
Facts are important. "Georgia decided to do some confiscation redistribution of the NIL income." Just inaccurate enough that an entirely wrong conclusion is reached. The GA law "allows" the schools to redistribute up to 75% of the NIL income. It is not mandatory and it is controlled by the schools, not the state. So whether "all the parasites get a piece" will be completely up to the school. Outcome: the football (or basketball) coach will control this. It will only be divvied up if it helps recruiting. Which it won't. So it won't be divvied up.
And do not miss the optics. The new bill was signed into law in the football recruiting lounge of UGA. At the signing ceremony, the following was stated by the GA governor (and UGA grad): “I believe it sets Georgia to accomplish something that quite honestly should have been done a long time ago. I’m a little biased, but I believe this is going to give coach (Kirby) Smart every bit of help he needs to bring home a national championship.”
The political genius of the law is it gives lip service to supporting the non-revenue sport athletes without requiring it. And if anyone thinks for one second that money will come out of the pocket of a 5-star football recruit to fund an athlete on the rowing team, I have a bridge for sale.
I'm sincerely confused by this; hoping you can help.
the GA law "allows" the schools to redistribute up to 75% of the NIL income.
So let's say UGA's star running back gets a $1,000 fee for some kind of promotion.
1. So the fee is collected by the school and not the athlete?
2. UGA, out of the kindness of their heart, decides give $750 to the athelete?
3. UGA gets to keep $250 for themselves?
That sounds decidedly un-NIL-like to me.
So basically UGA is acting as a player agent and worst case scenario gets to keep 25%; if not more (redistribute up to 75%).
How many legitimate agents get a 25% minimum? Not in Hollywood or the NFL.
Seems like out of one side of the mouths people are saying we're all for NIL and then out of the outher side of the their mouths they are double dipping on their student-athletes.
Not sure why people keep changing the description.
The Georgia law allows schools across the state to take up to 75% of an athlete's endorsement income. That cut would be deposited into a pool for all athletes at the school and then redistributed upon athletes' graduation.
The school is not keeping it for themselves.
It's not that hard to understand if you can read the law. The part that discusses the pool is only a page, go look it up.
If a school chooses, it is allowed to establish contracts with its athletes whereby they agree to contribute a portion of their NIL earnings to a pool which is then kept in escrow and distributed to all student athletes in a non discriminatory way. The amount that the school can require to be contributed is capped at 75%, so at minimum the student athlete will get 25% to his or herself, and depending on the arrangement they agree to with the school, much more, possibly.
I don't think the pool arrangement is unreasonable as it can be used to set some kind of minimum distribution to all athletes, even those less visible and without special marketability. The law leaves it up to the schools to figure out how to do it and to what degree, with the only restrictions being the cap at 75% and that the arrangement is structured in a non-discriminatory way.
In your example, the athlete would have agreed to contribute 25% of his income to the pool, and in exchange would be entitled to his share of the distributions from the pool upon graduation. Since the total endorsement and other income is likely to be in the hundreds of thousands, if not millions, he's probably going to get much more out than the 250 he put in.
I don't think the pool arrangement is unreasonable as it can be used to set some kind of minimum distribution
Cool.
I want to work at your company and get a cut from a pool stocked from your hard work while I'm off doing something else.
Are you being intentionally dense? Tip pooling and tip sharing are not unusual in service businesses. All I'm trying to say is any university AD doing a pool is not doing something wildly out of bounds.
I don't even think many schools should or will do this. UGa has already indicated they have no plans to do so. But if another school looks at their situation and decides it's in the best interest of all their athletes to do so, I think it's probably fine.
Also, to imply that an athlete in a less visible sport (or a less visible athlete within a bigger sport) is free riding on the popular athletes that will earn the majority of NIL income is wrong headed. Every athlete in every sport is working hard to compete, help the team, and represent the university. No one is off doing whatever just so they can live off the hard work of others, and in that nothing will change with NIL rights.
So in your world NIL = tip pooling.
But I'm the one being dense.
Go fuck yourself.
The NCAA is fighting a rearguard action here, as evidenced in the B1G’s commissioner echoing their mythology of altruism;
“We need a system that is fair to all of our student-athletes and protects the scholarships of student-athletes in both the revenue and Olympic sports and does not do anything to destroy the collegiate model that basically has provided life-changing educational opportunities to so many individuals, including my father, my brother, myself, my son,” said Kevin Warren
This would have rung more true if the NCAA wasn’t having to be dynamited out of the exploitative business model by a world that’s moved on.
I'm probably 100% wrong about this, but ... I've never understood the suggestions that the NCAA's actions are made out of greed. I mean, yes, the member schools of course want to retain whatever profits they can -- but presumably so they can direct them to their athletic departments. It's not like those profits are dividends that school presidents or athletic directors can take home with them. Their *salaries* (and jobs) are presumably dependent on things like rankings (both academic and athletic), profits, etc. But ... they don't *directly* share those profits.
Both of my parents worked in academia, and when they reviewed/considered budgets, it was always in terms of how those budgets should be allocated, not "how much of it can I take home with me."
Again, of course the schools want to retain whatever profits they can -- but so that they can improve their own athletic (or other) departments. There may be other counter-veiling considerations, of course, including the ethical (and legal) rights of players to the fruits of their own labors, but I find the accusations of "greed" facile -- and not particularly helpful in analyzing the NCAA's actions.
I think the members schools are worried about their budgets, and about the long-term viability of both revenue and non-revenue-producing sports. Those, it seems to me, are worthwhile concerns, and if we're going to debate what to do with NIL rights, we should at least engage with those concerns instead of misrepresenting the motives of those who raise them.
I agree schools are concerned about budgets but let's not ignore the fact that the people most loudly against players getting a piece of the pie are those whose slice would, in theory, be whittled down most by some revenue sharing. If there's a finite amount of money in the pot that can be spent on facilities, salaries, other capital expenditures, etc. and now schools may miss out on some of that money as it's redirected to athletes, that would affect their overall budgets including their salaries, bonuses, etc. Currently the NCAA member schools don't have to worry really at all about athletes getting paid in the open market, and so it's very advantageous for them to keep that system in place. Losing that option for cheap labor would have an effect on their revenue and it's why you see them fight so hard to keep up "amateurism" and the rest.
I do agree that this may well hurt non-revenue sports, and especially at schools with fewer resources, if the schools decide not to adjust their spending on a couple of sports accordingly if their budgets drops. But at least at the P5 level, most of the schools are awash in money from licensing deals and rush to spend it all because, as with any budget, you don't want to look like you didn't need as much as you set aside/asked for.
The argument often starts with emotional assumptions that put the abstract “greedy school” versus the “struggling college athlete.” People often ignore the institutional budget and why there are even college sports and sports scholarships. Yet, Warde did just get a 300k/year raise, which will stand out as I’m balancing the scales. Why does he deserve a raise that could help out a lot of other areas of the university? Is his salary in line %wise with ADs of similar universities with similar budgets and institutional costs? The assumption: Administration is often paid way too much for doing very little. Is this accurate—we’d have to know how much value the AD position brings through revenue. We’d also need to know where all the revenue goes—how much is reinvested into the students, faculty, and facilities. Top college coaches are paid way too much to balance out budgets, only because they are also revenue generators. Again, what is their value is based on what they are deemed to bring in for the college to then use for funding faculty, students, and facilities.
The NIL should be a national law that allows, in the simplest terms, to let students be paid what outside businesses want to pay them for their likeness, which is their perceived value by outside world. The university should have no say in this. School revenue is not harmed by students getting paid separately, so universities should not be in charge of distributing an individual’s income, even if the athlete is being “showcased” by the school. It goes both ways, because the college revenue doesn’t exist without the star athletes. These are just like professional athletes’ perceived value—LA Lakers don’t get a cut of LBJ’s Nike endorsements. Nor does LBJ need to pay the benchwarmers himself.
And so what is the bigger issue—colleges will have to spend more revenue on non-revenue athletes that don’t make personal income. That must be a fear they hold. Yet, if a baseball player or XC doesn’t make NIL money, then they should not get some of the income from the star football player’s endorsement. That’s not how personal income is treated in a capitalistic society. We aren’t communists. The student has to pay taxes on his or her income, and thus they learn earlier that income taxes are what we pay when we earn money.
Just think: maybe those non-revenue generating sports would attract more from companies like Nike, who wants to find the best runners, volleyballers, a d baseball players, too. Nike’s first athletes were runners. Imagine being an Olympic-level runner at USC or UM or LSU...let them get that money.
NCAA and states trying to control the students’ income and redistribute it is quite antithetical to capitalism—it is communism. Yet, here it is coming from a Republican governor and state congress. Why?
There’s no clear reason for limiting what athletes can make NIL other than for schools to control the athlete and not have to spend the revenue they do make on students. Will the colleges then pay their faculty more? Less adjuncts? Or will they just give raises to ADs and their underlings? The most non-exploitative thing a college can do is just stay out of the pockets of its students. Their income is theirs, not “ours.”
The not-so-clear reason is in assessing what it takes to produce something that generates revenue. What does it take to train an Olympic athlete? How do you fairly compensate the coaches that understand elite training and the entities that finance training equipment and facilities?
What percentage, then, goes to the actual athlete? What is fair? Fairness is an extraordinarily complex philosophy and even our massive legal system recognizes that justice and fairness are very different concepts.
Nike, in "finding" market-worthy non-revenue-sport athletes, has to skim the cream of the crop, has to ignore the 99.9% of athletes in these sports that couldn't possibly earn enough revenue to justify even their scholarships, let alone their training costs and facilities costs. If we expect the Nikes out there to finance the entire system of non-revenue college sports, we're going to be disappointed. Television rights to the overwhelming majority of college sporting events are barely worth the cost of production, if that (notice the Big Ten Network doesn't even try to use all its available time and BTN+ is often one grainy camera without an announcer working).
We can agree that there's a group of athletes who can generate a lot of revenue. But I think it's relatively small and doesn't even scratch the surface of what's spent on training and facilities and education for the tens of thousands of athletes who work very hard playing these sports, but cannot generate revenue on their own. It is, by nature, a system that is not capitalist. However, that is not the case with power-five football and men's basketball extending to a good percentage of Division I. Integrating these two concepts is anything but simple.
The NIL should be a national law that allows, in the simplest terms, to let students be paid what outside businesses want to pay them for their likeness, which is their perceived value by outside world.
NCAA and states trying to control the students’ income and redistribute it is quite antithetical to capitalism
Exactly.
But I'm being called dense because I don't equate NIL to tip pooling.
Thank goodness in my state, the NIL law says the student is free to enter into any contract they wish as long as it's not a conflict of interest or it doesn't interfere with the program.
I'm still curious as to what people expect for the vast majority of universities that need to use money from taxpayers and student fees just to have an athletics program.
The battle here is how to integrate the small group of revenue-earning football and men's basketball players into the system. The NCAA is trying to lessen the impact on the status quo, which it should.
If this system ends up taking away the scholarships from kids at the 90% of the universities with negative athletics earnings and/or scholarships from kids playing other sports everywhere, then it's a pretty bad deal overall.
The other worry is that we're going to have a complicated system where these elite football and basketball athletes will need (and should have) agents to assess and navigate deals. Universities will need to integrate permission to use their marks in order to maximize compensation (which they will do if they want to remain competitive). The recruitment process might look very different very quickly.
Not really but anyone listening to the SCOTUS arguments knows what is going to happen.
The article accurately describes the law as written and passed in Georgia. OP, you're understanding is what is suspect. The Georgia law is not a "redistribution tax" in any normal sense of the word tax. It's much closer to a tip pooling or commission sharing program, both of which are common and normal.
The key to the pool arrangement is that it is up to the school to set the amount, and part of what the student agrees to upon signing. Just like an athlete has to agree to go to class and remain a full time student and not break team rules, this will just be one more thing the agree to when signing with a school in Georgia. If they don't like it, they are free to sign with any other school that will offer athletic aid. If the school sees good athletes leaving, they can adjust the amount they ask athletes to agree to contribute, until they find the equilibrium amount.