NCAA Moving Towards Allowing Athlete Compensation for Name, Image and Likeness
Nearly a year ago on May 22nd, 2019, the California Senate voted on a bill that would change the collegiate sports landscape forever. Signed into law on September 30th, 2019, the Pay to Play Act would allow collegiate athletes to profit off their name, image, and likeness. Those three words have been tossed around quite a bit in sports business circles over the past year, leaving many professionals to wonder how the NCAA would respond to this. The NCAA knew they were in trouble, and what started out as a threat to California schools has now turned into a sort of compromise. On April 29th, 2020, the NCAA Board of Governors announced that they are working on a plan allowing collegiate athletes to earn money from the fame they’ve accumulated, with certain restrictions. This plan is set to go into effect for the 2021-22 academic year and will cause a dramatic change in the sports marketing landscape. Student-athletes lives are about to change for the better, but they’ll need help from people with endorsement and partnership experience when wading through uncharted waters.
As of right now, there’s one huge limitation to the NCAA’s changes. Student-athletes will not be allowed to affiliate themselves with any of their school’s trademarks. In addition to this, all deals must come from third parties. For the athletes themselves, this will take away one of the most recognizable brands they affiliate themselves with. While they may lose value from these restrictions, athletes will have an opportunity to build their own brands from scratch. This can be dangerous at times, but if student-athletes can align themselves with the right people, they’ll do just fine. In this proposal, marketing agents will be allowed to negotiate business deals on behalf of the student-athlete. Choosing the right agent will be vital for students looking to maximize their value.
In a competitive world of athlete and influencer partnerships, it will be crucial for student-athletes to not only align with the right business minds, but also the correct brands. This new NCAA rule set also approves paid autograph signings, and a famous example of a recently graduated student-athlete being taken advantage of by a brand is the late, great Kobe Bryant. Kobe, who had just declared for the NBA Draft as a high schooler, was eager to begin earning money for the fame he had accumulated. He was quick to the jump, signing an autograph deal with Score Card which allowed him to receive $10,000 up front and a $2.00 stipend for each signature after the first 7,500. A few days after Kobe’s 18th birthday, the high school star deposited his $10,000 base pay, making the contract binding as this action is seen as acceptance of the terms (and he was no longer a minor). Kobe became weary as he believed his signatures were worth more than $2.00 (rightfully so). Kobe sued Score Card saying there was not an enforceable contract, but he lost that battle and had to continue signing autographs for $2.00 a piece for the duration of the contract. Kobe was not technically a student-athlete at the time, but was taken advantage of by a brand before he even became a professional athlete. Without the proper education or business minds by their sides, current student-athletes could suffer the same fate.
While Kobe becomes an unfortunate example for one type of business partnership available under these proposed changes, there are plenty of other ways student-athletes will be able to get paid (and taken advantage of). Traditional third party TV and radio endorsements, social media influencing, and personal business activities like content creation (ex. YouTube videos) all join paid autograph signings in authorized business activities. Athletes who understand marketing and building a personal brand will be the ones benefiting from this change the most.
Having the right people by the athletes' side won’t just keep an athlete safe in their business practices, but it’ll also ensure they’re getting the most out of their value. Endorsement earnings for NCAA athletes will not have a cap, so superstar athletes can find themselves making hundreds of thousands or even millions of dollars before they become a professional. This piece makes it ever important that athletes select the right agents. Not all players will have illustrious athletic and business careers after college, so it’s important to take advantage of the fame early.
The NCAA understandably has their reservations about the role of agents in all of this, but if athletes try to deal with these brands themselves or don’t enlist the help of educated and trustworthy agents, they can lose out on a lot of their personal value. Kobe did well for himself in the NBA, but not all student-athletes will have a 20 year window to take advantage of their brands. The NCAA’s proposed rule changes are a huge leap in the right direction, now all we can do is wait to see if they stick the landing.