July 6th, 2021

Changing the Game: NCAA Updates College Athlete Profits Policy

One of the hottest topics in the past few years has been whether NCAA athletes should be permitted to make money beyond the cost of their university expenses. As of Wednesday, June 30, 2021, college athletes will be able to profit off of their name, image and likeness according to the NCAA Division I Board of Directors. Read on to learn about this important change in NCAA policy and what it means for college athletes.

What were the previous NCAA rules?

NCAA players have long been barred from receiving financial compensation “to advertise, recommend or promote directly the sale or use of a commercial product or service of any kind.” Additionally, college athletes could not participate in a sport if they agreed to have an agent represent them.

The rule change

The new NCAA policy will allow all college athletes, regardless of their affiliation in Division I, Division II, or Division III, to capitalize on their fame for the first time. Overruling Bylaw 12 , which previously governed amateurism and athletes’ eligibility, the policy permits student athletes to strike endorsement deals, profit off of their social media accounts, sell autographs and otherwise make money from their names, images, and likenesses. Furthermore, if an athlete hires an agent or has representation in connection with name, image or likeness, that athlete is allowed to play. This decision has the potential to drive millions of dollars to college athletes each year.

With the changing environment, it is expected that many states and schools will set policies regarding whether an athlete may wear university logos in an advertisement benefiting their own financial gain. Additionally, athletes will not be paid beyond the cost of attendance by the university and will, in no way, be considered an employee of the college due to the new, permitted financial gain.

Will there be federal backing from Congress?

The NCAA vs. Alston decision shows the support college athletes are receiving from the highest government bodies. The Supreme Court upheld the lower court’s decision that NCAA restrictions on “education-related benefits” for college athletes violated antitrust law. Justice Kavanaugh stated it perfectly, “Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate… The NCAA is not above the law.”

In addition, Congress has shown interest in the subject matter of paying college athletes with a range of hearings and bipartisan talks among senators. As of this date, 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. According to Mark Emmert, the NCAA’s President, “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; the current environment — both legal and legislative — prevents us from providing a more permanent solution and the level of detail student athletes deserve.”

What does this decision mean for the future of college athletes?

Most athletes should expect to earn modest sums, if anything at all, but high profile players could earn millions before they join the professional leagues. As a future athlete begins navigating the landscape of endorsement deals and profiting from their name, image or likeness, contract negotiation and representation will play an important role in protecting their personal brand, as well as their financial well-being.

Our business attorneys are well-versed in obtaining contracts and deals that best represent the interests of our clients. We can help ensure our future collegiate athletes are protected and represented. 

Jacob Oldaker is a member of Gross McGinley’s Business, Estate and Municipal practice groups. A former college athlete, Jake majored in Sports Administration and has a special interest in sports law. 

The content found in this resource is for informational reference use only and is not considered legal advice. Laws at all levels of government change frequently and the information found here may be or become outdated. It is recommended to consult your attorney for the most up-to-date information regarding current laws and legal matters.