College Athletes May Earn Money From Their Fame, N.C.A.A. Rules

Here’s a breakdown of why the N.C.A.A. finally relented to pressure to allow athletes to make money beyond the cost of attending their universities.

The N.C.A.A. agreed last Wednesday to allow college athletes across the country to capitalize off their fame for the first time. The decision will allow students from coast to coast to strike endorsement deals, profit off their social media accounts, sell autographs and otherwise make money from their names, images and likenesses, potentially directing millions of dollars to college athletes every year.

The Division I Board of Directors, which oversees the most prominent tier of college athletics in the United States, amounted to a surrender to years of swelling legal and political pressure. The board acted less than 12 hours before state laws designed to challenge the N.C.A.A.’s generations-old rules were scheduled to begin taking effect from Alabama to Oregon. Leaders in Divisions II and III, which include less visible and wealthy athletic programs but hundreds of thousands of players, made similar moves.

The N.C.A.A.’s last-minute policy change, which players and executives alike view as one of the most significant changes in the association’s 115-year history, will allow athletes to make endorsement deals whether or not they attend college in a state with one of the laws that forced the industry to act.

What have the rules been?

The N.C.A.A. has long barred players from being paid “to advertise, recommend or promote directly the sale or use of a commercial product or service of any kind.” The association has also said that players, with a handful of exceptions, could not participate in a sport if they had agreed to have an agent represent them.

How did the rules change?

The rules did not change so much as the N.C.A.A. decided to waive them.

Under the plan that association leaders approved last Wednesday afternoon, Bylaw 12 — a thick portion of the rule book that governs amateurism and athletics eligibility — will not be enforced if a student receives payment in exchange for use of the athlete’s name, image or likeness (also known as N.I.L.). The N.C.A.A. also agreed to allow athletes to have representation in connection with their N.I.L. activities.

Schools in many states are expected to set policies around matters like whether students may wear a university’s logo in an advertisement.

Athletes will still not be paid directly by universities beyond the cost of attendance, and the N.C.A.A. has been keen to ensure that athletes not be considered employees of their colleges.

“There are things that are going to have to be tweaked as we move along,” Richard J. Ensor, the commissioner of the Metro Atlantic Athletic Conference since 1988, said. “The basic regulation here, it’s not going to change.”

Was this always the N.C.A.A.’s plan?

Hardly.

The association accepted that it was going to need to rewrite its rules only as pressure rose out of the nation’s statehouses, starting with California in 2019.

Then, college sports leaders began discussing a proposal that would have allowed endorsements while still imposing what executives called “guardrails,” like the power for a school to block a deal if it conflicted with “existing institutional sponsorship arrangements.”

Last week, though, the Supreme Court ruled against the N.C.A.A. in a major antitrust case and left the industry more susceptible to litigation. Many executives feared that a host of national restrictions around N.I.L. would all but invite more lawsuits, so they opted for a more hands-off approach that they hope will prove more legally durable.

Will Congress do something?

Maybe. A federal standard is among the fondest wishes of college sports administrators, in part because it would presumably resolve any competitive issues surrounding disparate state rules that still take precedence over the N.C.A.A.’s modified rules. They also hope a federal law might offer them a greater shield from litigation.

Congress has signaled its interest in the subject with a range of hearings and bipartisan talks among key senators. But the N.C.A.A. very much wanted a deal in place by the start of July. In interviews in June, several senators said negotiations were ongoing. Republicans are urging lawmakers to adopt a narrowly crafted measure around name, image and likeness, while Democrats are pressing for broader protections for student-athletes.

“With the variety of state laws adopted across the country, we will continue to work with Congress to develop a solution that will provide clarity on a national level,” Mark Emmert, the N.C.A.A.’s president, said on a statement on Wednesday. “The current environment — both legal and legislative — prevents us from providing a more permanent solution and the level of detail student-athletes deserve.”

Could the N.C.A.A. have sued to stop the state laws?

Yes, and the association spent months refusing to rule out that possibility. In the end, they chose not to wage a court fight — at least for now.

The N.C.A.A. successfully batted down a state challenge to its authority in the early 1990s. That case, though, involved a single state law, and experts cautioned that fighting the assorted state statutes of today would mean a battle on numerous fronts with potentially uneven results.

How much are players going to be making?

A few select stars, particularly in football and basketball, could make millions. But many more college athletes, including plenty in those same sports, could likely generate thousands or tens of thousands of dollars in earnings. Some won’t make any money. The laws and N.C.A.A. rules do not guarantee any deals; they just make them possible.

Luis Pardillo, the chief executive of Dreamfield, a company that will work with student-athletes to market personal appearances, said he knew of players planning rates of $20 up go $2,000 an hour. But he and other executives anticipate that fees will shift as the marketplace evolves, with some athletes commanding even higher sums and others being prompted to cut prices.

It’s 2021. Why has this taken so long?

Take your pick of explanations. A crucial one is that, for reasons as much financial and legal as philosophical, it took a lot of college sports leaders a long time to warm up to the idea that students should be allowed to earn more than what it costs to attend school.

And although California passed a law in 2019 to allow players to profit off their fame (it has not yet taken effect) and pushed the N.C.A.A. toward changes, the N.C.A.A. is hardly designed for speedy action. The coronavirus pandemic, which sent the finances of the N.C.A.A. and college athletic departments nationwide into crisis, did not help the timetable.

The N.C.A.A. was prepared in January to vote on new rules, but the Justice Department, in the waning days of the Trump administration, raised antitrust concerns, prompting the association, at Emmert’s urging, to postpone action.

It was not until an interview with The New York Times on May 7 that Emmert publicly said the N.C.A.A. should again move ahead on approving new rules.

Tangent:

College athletes aren’t wasting any time. Wisconsin quarterback Graham Mertz released a video announcing his upcoming personal trademark on Monday. Jordan Bohannon, a basketball player at Iowa, has announced plans for an apparel line that will debut on Thursday.

Big Number:

19. That’s the total number of states that have passed some form of NIL legislation. Six of those states (Alabama, Florida, Georgia, Mississippi, New Mexico, Texas) have laws set to go into effect Thursday.