BIG IDEA: Allowing student-athletes to make money off of their brand could improve the competition in the NCAA.
Each March, the top 68 division 1 National Collegiate Athletic Association (NCAA) basketball teams play in a single-elimination tournament. This tournament is called March Madness. And madness it is. In 2019, the NCAA Madness tournament generated $1.18 billion in TV ad revenue for CBS and Turner Sports. Compared that to 2020, where the NCAA had to cancel the March Madness tournament due to COVID-19, and only made a revenue of $520 million for the entire season. The March Madness tournament brings in the most money for the NCAA. The schools that compete in the tournament also make a significant amount of money from the money generated.
Between the television revenue and ticket sales, the NCAA keeps 40% and distributes the remaining 60% to schools. Just from making the men’s basketball tournament, schools make an estimated $1.67 million dollars. The $1.67 million is split into six annual payments of roughly $260,500 each year (the amount changes each year due to inflation). If a team makes it to the men’s final four, it earns an additional $8.3 million making a total of $10 million ($1.67 million for making the tournament + $8.3 Million =~10million).
This money incentives schools to hire the best coaches so they can go the furthest in the tournament. The average salary of a coach in the BIG 10 conference is $3,083,202. John Calipari makes the most of any NCAA basketball coach with a salary of $8 million dollars each year.
So if the NCAA is making billions of dollars each year, schools are making hundreds of millions of dollars, and coaches are making millions, then how much is awarded to the athletes?
Zero.
This is due to multiple rules in the NCAA rule book that ensures students who participate are of amateur status. Schools not only can’t pay students, but student-athletes are not able to make any money off their name, brand, or likeness. Students are prohibited to wear any endorsements other than endorsements from the school. Schools can make money by selling players jerseys, but players can’t make any money off of that.
According to the NCAA, the average athletic scholarship for a D1 athlete is $18,000. Which oftentimes does not cover the full cost of attendance. According to US News, from 2020–2021, the average tuition at public schools for out-of-state students was $21,184, and the average cost was $35,087 at ranked private schools. On top of this, D1 athletes are often unable to work a side job as they devote full-time working hours to preparing for their sport. According to surveys done by the NCAA, the average student-athlete devoted 33 hours to athletics every week. On top of this, they frequently have to take time out of classes to attend games or athletic events. For example, during the NCAA tournament, student-athletes have to leave their school campus for up to a month. Although, they try to attend as many classes as possible online. Due to the hectic march madness schedule, they often have to miss classes, and this affects the value of the education they receive.
The NCAA defends itself by saying that the amateur status helps keep the sport competitive, so players don’t simply go to programs with the most money, and currently, student-athletes are offered scholarships. In an official statement, they say, “Changing the nature of college sports through the elimination of financial aid and benefits rules would erode appeal for fans, alumni, and students”. They also state that in 2020, 90% of division 1 student-athletes graduate, which is higher than the general student average in division 1 schools.
I believe that allowing student-athletes to make money off their personal brand will improve the competition of college athletes. Under this model, schools still won't be able to pay players, thereby leveling the playing field and not giving an unfair competitive edge to wealthy schools.
Since student-athletes don’t get paid, there has been a recent shift for highly recruited athletes to take alternative routes to become professional athletes. The average salary for an NBA rookie is $900,000. So high-level prospects have decided to bet on themselves, and play overseas, play in the NBA G League, or sign special contracts with shoe companies. For example, Jalen Green is the number one player in the 2021 class, and he has stated that he is skipping college for the NBA G League. He can earn as much as $500,000 and earn endorsements during this time.
If students are allowed to make money off their brand, this could entice players that would have previously taken alternative routes to play in the NCAA. The more players play, the larger the talent pool; and this competition helps the NCAA create a better product.
Student-athletes can be viewed very differently depending on what lens you view them. You can view them as employees who bring in the majority of the money for a huge corporation and who deserve to get a piece of the pie. As commodities who have to be under strict regulation to avoid devaluing the organization. Or as individuals who can bring value to a prosperous organization and capitalize on the attention they bring.
Appendix
O’Bannon v. NCAA was a class action lawsuit in 2014. The trial included Ed O’Bannon, a former UCLA basketball star who sued the NCAA for using his image in rebroadcasts of his game and in the EA Sports NCAA video game. The judge decided that the NCAA violates antitrust laws. However, the NCAA was still allowed to not pay student-athletes. Although, the ruling now allows college universities to place up to $5,000 to athletes in a trust for each year of eligibility.
Recently, in September 2019, the State of California Senate signed a bill allowing student-athletes to earn endorsements and sponsorships with the Fair Play To Play Act. This act will be implemented in January 2023.
This movement is gaining momentum, and we hope to not only see this change in California but also across the nation.
