By Rich Ruben
The many issues surrounding compensation for use of college athlete’s name, image or likeness (NIL) is upon us. Although the NCAA knew for years that this day was coming, (“shockingly”) they have done nothing about it. Now they won’t lead the direction of compensation but will have to follow the dictates of Congress and state legislatures. It didn’t have to be this way.
The subject has been debated at many levels for years before California enacted a law in September 2019 with an effective date of January 1, 2023. The law passed both houses of the California legislature without a dissenting vote. More recently Alabama, Florida, Georgia, Mississippi and New Mexico jumped to the front of the line and now have laws permitting athletes to earn income for use of their NIL that go into effect on July 4, 2021. In thirty six other states bills have been proposed and several competing bills have been proposed in Congress.
What Has The NCAA Done
Typically the NCAA reacted to the California law in a hurry, before the governor even signed the new law. The initial position staked out by the governing body of college athletics was that all California schools would be ineligible for all post season play when the law became effective.
With the narrative clearly going against them, the NCAA formed a “working group” to study the issue. They expected anti trust issues and the Justice Department did send questions to the NCAA in December 2020 which led to the NCAA shutting down its work on the issue. Now it is too late. Although the NCAA is expected to submit a proposal to its members before July 1, laws in at least five states will become effective three days later and Congress may enact federal legislation later this year which is likely to get a very favorable reaction from the Biden administration.
According to the NCAA the only way a national NIL system can work is to have an unaffiliated third party clearing house to review each proposed contract for every athlete to determine whether it complied with its NIL rules. By doing nothing for over a year and a half, unless Congress acts before July 1 and preempts state laws on this issue, the NCAA will presumably have to review contracts under differing state laws if it passes rules providing for such review before July 1, but the chances of such quick action are very small.
What Exactly Is Meant By NIL
The California law provides that schools cannot directly pay athletes for use of their NIL. If USC uses photos of players in basketball advertising the university cannot pay the athlete. Athletes in California can sign contracts with agents and attorneys who are licensed athletic agents or attorneys and with third parties.
In light of the inaction by the NCAA and the news laws passed by other states, California is now considering an amendment that will make its NIL law effective immediately. In California players can use their NIL for commercial purposes when they are not engaged in team activities. The player must disclose to the university any proposed agent to make sure the agent is licensed.
One Prior Ruling Against A Colorado Player Helped Lead To The Current Status
Jeremy Bloom was a very good wide receiver at Colorado in the early 2000s. He was also a world class skier, a member of the US National Freestyle Ski Team and competed in the 2002 and 2006 Winter Olympics. Bloom funded his travel to international ski competitions by endorsement deals for ski equipment and clothing. The NCAA ruled he forfeited his eligibility at CU and his college football career ended.
After not playing football for two seasons Bloom was still drafted in the fifth round of the NFL draft. Losing those two seasons likely cost Bloom an NFL career.
The Impact Of NIL Laws On Recruiting
Universities in states with laws becoming effective in July are already using prospective earnings in recruiting. It is not a coincidence that most the states that have acted these laws are in the SEC. The governor of Missouri recently made an appeal to the legislature to quickly move a new bill in his state, specifically noting that he didn’t want SEC member Missouri to lose recruits to Alabama, though perhaps someone should let him know that beating Alabama in recruiting in any sport was a long shot for the Tigers.
Previously, recruits often evaluated scholarship offers by many factors. They might consider the coaching staff and the relationships the coaches have established with them. They would likely consider the school’s location, possibility of early playing time, value of a degree from the school versus another, and the basketball history and tradition of the school. Other factors could include the school’s or coaching staff success in developing players for the NBA draft or possibly the amount of TV exposure a team generally received and on which networks.
NIL Potential Will Likely Hurt Trojan Basketball Recruiting
Not every player on a team will likely generate outside interest and NIL income, but for one and done players income potential may now be the only factor in selecting which school to attend. Would an Evan Mobley earn as much at USC as he would at Kentucky or Kansas? These one year players will even have better earning potential in the Pac 12, at Arizona, Oregon or UCLA.
The next level players may also look at earning potential over their college careers as the biggest or one of the main factors in selecting a school. 2021 USC freshmen Reese Waters and Malik Thomas might have more earning power elsewhere. 2022 recruits will be the first to consider earning potential before signing.
The impact might be the same for transfers. Would the Trojans have been able to sign transfer guard Boogie Ellis if he was in the portal next year? Conversely, will Reese or Malik enter the transfer portal if they have a big freshman season to earn more money?
We can only hope that Mike Bohn and staff have a plan they can sell to basketball recruits to avoid falling into a second tier of teams in the six top basketball conferences. This is not Andy Enfield’s problem to solve, though if he has any ideas they would be welcomed. Hopefully Bohn has not made the same mistake as the NCAA and waited too long. If the Trojans are not ready to compete for top players on the basis of income potential this year the problem can still be remedied if Bohn and staff have a plan next year and the recruiting impact might lessen or end after one season. But there is no doubt they need a plan that the coaches can use in recruiting.
Oregon will undoubtedly use its Nike connections to help generate player income from jersey sales, and Nike will sign top college players to shoe contracts. Kentucky, Kansas, North Carolina and Duke will use their very large fan bases in recruiting and stress income potential
Before this past season the Trojan basketball fan base could not compete with Arizona’s. It remains to be seen how many more people will be excited about Trojan basketball after the past two seasons but there is little doubt that many more Evan Mobley jerseys would be sold in sporting goods stores and on line if Evan was an incoming 2022 freshman and signed with one of the national powers rather than with USC.
Agents for first round talents should be able to get the same professional endorsement deals if the player attends Arizona or USC, at least after the player enters the draft. But Zion Williamson could have made much more money in his year at Duke than he could make at USC. If he played for the Trojans he might have had to wait until after the draft for his mega deal while at Duke he would likely have gotten his shoe contract a year earlier.
Other state laws may allow players to be compensated in more ways than in California. Laws in individual states do not have to be the same and state by state legislation does not raise anti trust issues. Allowing college athletes to receive some of the income derived from their name or likeness is prolong over due but the impacts on college basketball are not yet known. If one state allows a player to be paid directly by his school the NCAA will undoubtedly rule the player is ineligible until more states follow and we may have a second round of NIL issues.
For now, the Trojans and perhaps all the Pac-12 teams will likely be at a recruiting disadvantage behind the national powers. For USC and most of the conference teams they will now have a new recruiting disadvantage when competing for a player against the large basketball fan base conference schools. The NCAA has lost any ability to even the playing and beginning this fall the NIL market may control who signs where.