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NIL contracts are changing the landscape of all collegiate sports

ARI SHAPIRO, HOST:

We're in the thick of NCAA'S March Madness basketball tournaments. And the arenas have been feeling, dare I say, normal.

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UNIDENTIFIED SPORTSCASTER #1: Alexander hands it back (ph). It counts.

SHAPIRO: The stands have been packed with fans back at full capacity for the first time in two years.

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UNIDENTIFIED SPORTSCASTER #2: They're not going to count it. They are not going to count it.

SHAPIRO: But something new has been happening off the court, too.

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UNIDENTIFIED PERSON #1: It's selection Sunday, and Drew Timme has a choice to make.

DREW TIMME: Nah. No, no.

SHAPIRO: That little shaving cream ad featuring Gonzaga basketball player Drew Timme would not have been possible or legal last March Madness. See; the NCAA has never before allowed student athletes to make money off their name, image or likeness. Those deals are called NIL for short. That meant no sponsorships or endorsement deals, all while the NCAA made millions from March Madness, 850 million just from the TV rights to the men's tournaments last year. But then a Supreme Court case changed everything last year. Here's Justice Brett Kavanaugh.

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BRETT KAVANAUGH: It does seem as if schools are conspiring with competitors, agreeing with competitors - I'll say that - to pay no salaries to the workers who are making the schools billions of dollars on the theory that consumers want the schools to pay their workers nothing.

SHAPIRO: Last July, the court ruled that the NCAA could no longer limit student athletes using their own name, image or likeness. Seemingly overnight, thousands of student athletes became brand ambassadors for companies like Nike, Yahoo and Gatorade.

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UNIDENTIFIED PERSON #2: Now to be an actual Gatorade athlete - it's surreal to me.

UNIDENTIFIED PERSON #3: What does NCAA basketball star Buddy Boeheim eat for breakfast?

BUDDY BOEHEIM: Try Three Swishes Cereal.

UNIDENTIFIED PERSON #4: Good Feet arch supports allow me to move swiftly, to have balance and stability.

SHAPIRO: But here's the thing - because NIL policies are brand new. They're still kind of like the wild, Wild West.

KENDALL SPENCER: We're dealing with a highly unregulated system, and that has all sorts of dangers in it.

SHAPIRO: That's Kendall Spencer, former student athlete and lawyer. He worries there aren't enough federal guidelines in place to protect college athletes.

SPENCER: You know, when a deal goes bad, who are the student athletes going to go after? Are they going to go after the institutions? Are they going to go after their agents?

SHAPIRO: Spencer is especially concerned about students being exploited in a hyper-online world.

SPENCER: You know, if I can't keep Adidas from just snatching a photo of me and putting it wherever they want to or anyone else on social media like Instagram, then how valuable really is this new ability?

SHAPIRO: And there are other points of contention in the sports community, like the value of these deals and where that money is coming from. Those issues are at the center of Stewart Mandel's recent report about an unnamed football recruit who landed an $8 million NIL deal. He is editor-in-chief of college football at The Athletic.

STEWART MANDEL: You know, obviously, you guys spotlighted what NIL was intended to be used for, which is players can get a commercial or an endorsement and make a little bit of money. And I don't think anybody has any problem with that. But as is often the case in college football, people are looking for ways to exploit it and use it to get recruits to come to their school. And so what we've seen are these what are being called NIL collectives that are basically, you know, boosters, donors who are fans of a certain school, rallying other boosters and donors to pool their money and use it to make big offers to, you know, a five-star recruit that they want to come to their school. And in this case, they offered that player - and I saw that he signed it - a contract, which is money we've never really heard of certainly for a college athlete.

SHAPIRO: You say it's money we've never heard of for a college athlete. How far outside the norm is $8 million?

MANDEL: Well, we know that last year, Nick Saban, Alabama's coach, said that his star quarterback, Bryce Young, was making close to seven figures. We know that Quinn Ewers, a quarterback from Texas, who first went to Ohio State and has now transferred back to Texas, was making around a million, maybe a little over a million. So this contract will pay the player more than $2 million a year, which could come out to over 8 million if he plays there for his whole career.

SHAPIRO: How evenly is this money generally spread across college sports? Like, are men's basketball and football kind of sucking up a lot of the oxygen here?

MANDEL: Yeah. I mean, there's no question that the big money is going toward in general football and men's basketball. Now, we have seen individual players, especially in women's basketball, gymnasts, volleyball, individual star players in those what we call non-revenue sports who are landing good endorsement deals. And that is something that a lot of people saw coming and thought would be obviously, you know, a good development for these sports. But in general, it's football and men's basketball.

SHAPIRO: College athletes have been pushing the NCAA to give them more power and autonomy for years on many different fronts, and the contracts that we're talking about are just one piece of that puzzle. How much more are players still hoping to get from the NCAA?

MANDEL: Well, there are advocates out there who think the athletes should be full-on employees of the school. There's - that's not necessarily a majority opinion. I think that's a very contentious issue because then then you really are turning college sports into professional sports. Players can be fired. You know, there's all sorts of implications of that. But that doesn't mean there aren't people that are still going to push for that.

SHAPIRO: Would you say that on the whole, this shows that the NCAA is on the decline, is losing power? Is this a trend that's likely to continue?

MANDEL: The NCAA has lost tremendous power over the last decade, as they've lost several of these high-profile court cases. And, you know, I think the huge mistake the NCAA made was not reading the room and proactively developing their own policies that would have allowed for athletes to make this NIL compensation. Not a dollar - it doesn't - it's not costing their schools a dollar. These NIL deals are coming from third parties. But they fought and fought and fought in court and lost every case, and like you mentioned earlier, obviously culminating in the Supreme Court 9-nothing decision last year in the Alston antitrust case. And so because of that, nobody fears the NCAA anymore. That $8 million deal I talked about is pretty blatant buying a recruit, which is still very much against the rules. But clearly the parties involved don't fear that the NCAA is going to do anything about it.

SHAPIRO: And so what do you think the next shoe to drop is going to be?

MANDEL: You know, I think we're going to see a really messy next couple of years as this stuff starts to sort itself out, because I think what's happening is, you know, the contract I saw was negotiated by a legit attorney and is - you know, obviously he considered that to be a favorable outcome for the athlete. A lot of these athletes are being taken advantage of. They don't know what they're signing. They're signing away exclusive rights to their image. And what we're probably going to see in the next 2 to 3 years is a lot of lawsuits and a lot of messy situations where the athlete wants to try to get out of what they sign. Or let's say this $8 million kid gets to college and turns out to be not very good, which is, you know, kind of a 50-50 crapshoot even with the most highly rated recruits. Now that NIL collective is going to try to figure out how to get out of paying him that money.

SHAPIRO: So everybody's figuring out the new rules of the game.

MANDEL: It's happening on the fly in just rapid, rapid pace, and I don't think anybody really knows for sure what they're doing. And so it's a little early to say, for instance, oh, this kid got 8 million. The next guy's going to get 9 million. We'll find out soon if that was an outlier or a sign of things to come.

SHAPIRO: Stewart Mandel is editor and chief for college football at The Athletic. Transcript provided by NPR, Copyright NPR.