The Aspen Institute

The Aspen Institute Sports & Society Program held a conversation May 1 in Washington, DC titled “Future of College Sports: Reimagining Athlete Pay.” The discussion was livestreamed at as.pn/collegesportsfuture. The Aspen Institute discussion explored the implications if NCAA athletes could be paid by outside entities for use of their names, images, and likenesses, like any college student.

While speaking at the Aspen Institute in 2016, NCAA president Mark Emmert raised concerns that University of Texas swimmer Joseph Schooling had recently received a $740,000 bonus from Singapore for winning a gold medal at the 2016 Olympics. Schooling didn’t just win gold; he was Singapore’s first Olympic gold medalist and beat the great Michael Phelps.

This payment was perfectly permissible under NCAA rules, which since 2001 have allowed US Olympians to compete in college while pocketing tens of thousands of dollars (and sometimes six figures) from the United States Olympic Committee for winning gold, silver, or bronze. The NCAA added an exception in 2015 to also allow international athletes to receive bonuses.

Still, a college swimmer making nearly three-quarters of a million dollars concerned some NCAA members because, Emmert said, “that’s a little different than 15 grand for the silver medal for the US of A. … The members at that time hadn’t anticipated this phenomenon of like the Singaporean kid getting paid a very large amount.”

Never mind that NCAA rules allow two-sport athletes to be paid professionals in one sport while competing in a different college sport, such as Kyle Parker’s $1.4 million baseball signing bonus while serving as Clemson’s quarterback in 2010. Or that tennis players can receive up to $10,000 per year in prize money (and additional cash on a per-event basis) before or during college. Or that college football players can receive bowl gifts up to $550 in value, which can involve players selecting high-tech electronics from a gift suite or receiving a Visa gift card. Or that schools have student-assistance funds to help athletes financially, including paying five-figure insurance policies for elite athletes who want to protect their professional futures.

Emmert’s description of his membership’s concerns about the swimming bonus reflects the never-ending definition of NCAA amateurism. Amateurism is whatever the NCAA says amateurism is at any particular moment.

As US District Judge Claudia Wilken wrote in her 2014 ruling in the Ed O’Bannon v. NCAA antitrust lawsuit case against the NCAA over the commercialized use of players’ names, images and likenesses: “The association’s current rules demonstrate that, even today, the NCAA does not necessarily adhere to a single definition of amateurism.”

The challenges are adding up for the NCAA both in the courtroom and in the court of public opinion. Speaking at a 2017 meeting of the Knight Commission on Intercollegiate Athletics, Emmert released internal NCAA polling showing that among all Americans, 79 percent say major universities value money ahead of college athletes.

“I can’t think of anything 79 percent of Americans agree to,” Emmert said, “but they agree to that.”

Such is the state of college sports. How America’s college sports system got here – the only country in the world to attach a highly-commercialized, multibillion-dollar industry to higher education, thus resulting in ongoing legal challenges and public criticism – is a long story. Three key events help trace the journey.

1. Why NCAA athletes are called student-athletes

The term “student-athlete” is ingrained in the college sports vernacular. NCAA-organized press conferences involve a moderator seeking questions for any of the “student-athletes,” a term that historically comes to define the NCAA’s perceived moral authority and its justification for existence.

It’s a term rooted in legal calculations. Walter Byers, the NCAA’s first executive director, created “student-athlete” in the 1950s to help the NCAA fight against workmen’s compensation insurance claims for injured football players.

“The student-athlete was a term used to try to offset these tendencies for state agencies or other governmental departments to consider a grant-in-aid holder” to be an employee, Byers said in court testimony during the 1990s. Soon, the term “student-athlete” became embedded in all NCAA rules and interpretations.

“Student-athlete” first surfaced when the widow of Ray Dennison, who died from a head injury in 1955 while playing in Colorado for the Fort Lewis A&M Aggies, filed for workmen’s compensation death benefits. The Colorado Supreme Court agreed with the defendant that Dennison’s widow was not eligible for benefits because the college was “not in the football business.”

“The term student-athlete was deliberately ambiguous,” Pulitzer Prize-winning author Taylor Branch wrote in The Atlantic in 2011. “College players were not students at play (which might understate their athletic obligations), nor were they just athletes in college (which might imply they were professionals). That they were high-performance athletes meant they could be forgiven for not meeting the academic standards of their peers; that they were students mean they did not have to be compensated, ever, for anything more than the cost of their studies. Student-athlete became the NCAA’s signature term, repeated constantly in and out of courtrooms.”

The student-athlete defense helped the NCAA win – and avoid – numerous liability cases through the years. The most notable win was a lawsuit brought by former Texas Christian University (TCU) running back Kent Waldrep, who was paralyzed in a 1974 football game against the University of Alabama. TCU stopped paying his medical bills after nine months and the Waldrep family coped for years on charity.

Shortly after NCAA Division I schools began carrying catastrophic insurance for football players in 1991, Waldrep sued. He claimed he was an employee of TCU at the time of his injury and covered by workers compensation laws. Waldrep initially won $70 a week for life and medical expenses dating to the accident, but TCU’s insurance carrier appealed.

Finally, in 2000, the Texas Supreme Court ruled that Waldrep was not an employee because he and TCU intended for him to participate in sports as a student. As part of its decision, the Texas Supreme Court wrote that a basic purpose of the NCAA was to make the student-athlete an integral part of the student body, and cited the definition of an amateur student-athlete from the NCAA bylaws: “one who engaged in athletics for the education, physical, mental, and social benefits he derives therefrom, and to whom athletics is an avocation.”

The power of the student-athlete label has played out in legal circles and in the public narrative. Today, the NCAA promotes that more than 460,000 student-athletes compete in 24 sports per year, and more than eight in 10 student-athletes will earn a bachelor’s degree. The value of a college degree is viewed very favorably by many Americans, especially as tuition costs continue to skyrocket that causes students to carry college-loan debt well into adulthood.

Yet the money keeps growing in college sports. The combined revenue for the five major conferences (SEC, Big Ten, ACC, Big 12, Pac-12) increased by 266 percent from 2005-15, according to the Knight Commission. In 2015, the 53 public schools from the five major conferences paid their football coaching staffs (530 individuals) a combined $405.5 million, compared to $179.8 million in scholarships to their football players (4,979 individuals).

In recent years, the NCAA changed some rules to allow new benefits for athletes. Schools can expand the value of athletic scholarships to include cash stipends of a couple thousand dollars to cover athletes’ full cost of attendance. The NCAA now lets schools provide unlimited meals to athletes. The Pac-12 in 2014 became the first conference to guarantee athletes who are injured in college competition will have medical expenses covered up to four years by the school; the other four major conferences recently agreed to a minimum two-year standard for medical expenses covered after college.

But the criticism for the NCAA hasn’t subsided. The NCAA’s academic mission has increasingly been called into question. Athletes may be receiving degrees, but many examples show that pockets of athletes are not receiving a quality education. Some of them essentially major in eligibility – that is, they take (and are sometimes directed to) easier majors/courses in order to stay on the field.

The most glaring example occurred when the University of North Carolina was found by outside parties to have organized fake classes that enabled dozens of athletes to gain and maintain their eligibility. In a ruling last year that caused considerable confusion and frustration among NCAA members, the NCAA did not penalize North Carolina. The NCAA said no association rules were broken because the fraudulent classes were not available exclusively to athletes; other students had access to the courses, too. An independent report commissioned by North Carolina found that of the 3,100 students who took the fake classes over 18 years, 47.4 percent were athletes.

The North Carolina scandal also has played out in state and federal court, where the NCAA argued that it “did not voluntarily assume a legal duty to ensure the academic integrity of courses offered by its member institutions.” The NCAA enforcement model “creates no legal duty to prevent NCAA members from violating NCAA rules,” the association wrote.

North Carolina avoided NCAA penalties by essentially arguing that the NCAA should stay out of irregularities in college courses. This caused many critics to say that the NCAA must decide whether it’s going to continue to be involved in other academic matters, such as:

“Maybe we’ve just reached the point where if a university is going to cheat academically, the public needs to look to the university and university leadership and say, ‘Does winning mean that much to you?’” retired North Carolina Supreme Court Justice Bob Orr, co-counsel in a lawsuit against the NCAA involving the North Carolina scandal, told CBSSports.com in 2016. “Instead, they turn to this outside organization with inconsistent standards and limited resources.”

If the NCAA ever removed itself entirely from academics and became solely an organizer of sporting events, that could pose a significant threat to the association’s current nonprofit model. The entire enterprise is designed around the notion that providing access to an education is sufficient compensation to players for their participation in a multibillion-dollar industry.

After all, the NCAA tells us, these players are student-athletes.

2. 1984 Supreme Court decision shifted the power to conferences

Perhaps more than anyone else, the late Supreme Court Justice Byron “Whizzer” White saw the challenges coming for the NCAA. White essentially predicted so much of this – the commercialization, the defections for TV cash, the NCAA’s struggles to protect amateurism – when he wrote the dissenting opinion in the landmark NCAA v. Oklahoma Board of Regents case that ended the NCAA’s monopoly over college football television contracts.

“By mitigating what appears to be a clear failure of the free market to serve the ends and goals of higher education,” White wrote in 1984, “the NCAA ensures the continued availability of a unique and valuable product, the very existence of which might well be threatened by unbridled competition in the economic sphere.”

The NCAA once controlled football television – who got the exposure on TV and how the money was distributed to schools. The University of Oklahoma and University of Georgia sued to change the power structure. An appellate court and the Supreme Court upheld the lower court’s decision that the NCAA’s control over football TV contracts was illegal.

The Supreme Court handed down a 7-2 decision against the NCAA. The only justice joining White in dissension was William Rehnquist. White warned that the court was making a mistake by “subjugating the NCAA’s educational goals … to the purely competitive commercialism of [an] ‘every school for itself’ approach to television contract bargaining.”

After the decision, schools began merging into larger conferences and ended the once-common practice of independent status. Conferences soon held the power in football – and as football’s popularity grew in America, the sport became the financial engine for athletic departments. Conferences began to negotiate lucrative media rights deals, stage championship games and secure their own bowl games, and ultimately produce college football’s first national championship format.

Today, the conferences now stage the College Football Playoff, which is worth about $470 million annually. Many of them have their own television network. During fiscal year 2017, the SEC distributed on average $41 million to each of its 14 universities, according to USA Today. Ten years ago, the SEC average payout per school was $11 million. The Big Ten Conference is projected to exceed $50 million in its average payout.

Top 10 Athletic Department Revenue-Makers
School	2015-16 Revenue	10-Year Revenue Increase
Texas A&M	$194.4 million	175%
Ohio State	$170.8 million	63%
Alabama	$164.0 million	142%
Michigan	$163.9 million	92%
Oklahoma	$150.4 million	133%
LSU	$141.7 million	110%
Florida	$141.4 million	71%
Tennessee	$140.4 million	90%
Auburn	$140.1 million	110%
Source: USA Today Sports

There’s another legacy of the 1984 ruling: Buried within the NCAA’s landmark loss was a Supreme Court gift that kept on giving for 30 more years. In the middle of the majority opinion, Justice John Paul Stevens dropped in limited language that states “athletes must not be paid”:

“… moreover, the NCAA seeks to market a particular brand of football – college football. The identification of this ‘product’ with an academic tradition differentiates college football from and makes it more popular than professional sports to which it might otherwise be comparable, such as, for example, minor league baseball. In order to preserve the character and quality of the ‘product,’ athletes must not be paid, must be required to attend class, and the like.”

There were just three sentences in a 19,000-word brief. The topic (player compensation) had nothing to do with the issue at hand (football TV contracts). No one testified about player compensation, and Stevens didn’t appear to give much rigorous thought to what he was writing.

Stevens didn’t define what “paid” means. Does that mean salaries from the school, endorsements from outside entities, or checks written as part of scholarship agreements?

Stevens didn’t explain what “required to attend class” means. Does that mean a part-time student or full-time student, or perhaps attend only one class? How would Stevens interpret “required to attend class” today when compared to how frequently NCAA athletes miss school to travel to play in games? In a 2015 survey, Division I men’s basketball players said they spent an average of 1.7 days a week away from campus and missed 2.2 classes. The Wall Street Journal found that eight top-25 men’s basketball teams in 2018 traveled an average of more than 42 days during the season.

Though NCAA v. Oklahoma Board of Regents wasn’t about compensation for college athletes, Stevens’ five words – “athletes must not be paid” – became a valuable source for many NCAA legal victories in future years. That changed when the O’Bannon case challenged the NCAA’s restrictions preventing football and men’s basketball players from being paid for the licensing use of their names, images, and likenesses (NILs).

Wilken, the judge in O’Bannon v. NCAA, concluded that while NCAA v. Oklahoma Board of Regents “gives the NCAA ‘ample latitude’ to adopt rules preserving ‘the revered tradition of amateurism in college sports’ … it does not stand for the sweeping proposition that student-athletes must be barred, both during their college years and forever thereafter, from receiving any monetary compensation for the commercial use of their names, images and likenesses.”

Andy Coats, the lawyer for Oklahoma and Georgia in the 1984 Supreme Court case, said it was only a matter of time before players sought a slice of the TV pie.

“They’re saying, ‘Look, we’re generating this money either by our play or the fact you take my image and sell it, and it’s not fair,’” Coats told CBSSports.com in 2014.

The money grew too big. The time had come for legal challenges on behalf of the players.

Tom McMillen, who oversees the athletic director association for the NCAA’s largest division, sums up a critical question this way: If schools could pay players, who would athletic directors predominantly pay – the players or the coaches? Surveys show ADs don’t currently support constraining coaches’ salaries, McMillen said.

“The system has allowed coaches’ compensation to explode so it’s a fair question,” McMillen said. “If that hadn’t happened, I think the pressure on paying athletes would be far less today. You can’t have a market place where one side wins and another side doesn’t win. You can’t expect one side to be constrained forever. I said that in my book in 1991. I think it holds even more true today.”

Top 10 College Football Coach Salaries
2001	2017
Steve Spurrier (Florida), $2.1 million	Nick Saban (Alabama), $11.1 million
Bob Stoops (Oklahoma), $2 million	Dabo Swinney (Clemson), $8.5 million
Bobby Bowden (Florida State), $1.5 million	Jim Harbaugh (Michigan), $7 million
Mack Brown (Texas), $1.5 million	Urban Meyer (Ohio State), $6.4 million
Barry Alvarez (Wisconsin), $1.3 million	Rich Rodriguez (Arizona), $6 million
Phillip Fulmer (Tennessee), $1.3 million	Jimbo Fisher (Florida State), $5.7 million
Glen Mason (Minnesota), $1.3 million	David Shaw (Stanford), $5.7 million
Tommy Tuberville (Auburn), $1.3 million	Tom Herman (Texas), $5.5 millionn
Nick Saban (LSU), $1.2 million	Gary Patterson (TCU), $5.1 million
Pete Carroll (USC), $1.2 million	Kevin Sumlin (Texas A&M), $5 million
Source: USA Today Sports

3. Impact of Ed O’Bannon v. NCAA

The next chapter of challenges against the NCAA is still being written. The results will be based in part on the O’Bannon ruling – the legal precedent set, how college athletes are more cognizant of the money around them, and the public’s opinion about amateurism and what it even means.

The O’Bannon case ended up with victories for both sides. The plaintiffs won a decision that certain NCAA amateurism rules violate federal antitrust law. The court determined that those rules constituted an anti-competitive conspiracy by the NCAA schools and conferences to deny men’s basketball and football players monetary value for their NILs. This potentially leaves the NCAA vulnerable for more antitrust challenges.

On the other hand, the Ninth Circuit Court of Appeals rejected Wilken’s remedy to the violations: Allow schools, if they so desire, to pay players up to $5,000 per year while they are in college with payment coming after they leave school. Rejecting the remedy was a win for the NCAA. Today, the NCAA clings to a new definition of amateurism through the O’Bannon appellate decision, which tied educational expenses to athlete compensation.

“The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap,” two Ninth Circuit judges wrote in 2015.

Legal threats continue against the NCAA. Two lawsuits that challenge the NCAA’s current compensation limits for athletes continue – including the Martin Jenkins case led by attorney Jeffrey Kessler, who brought free agency to the NFL – envision an NCAA in which conferences and/or schools would be free to make their own independent determinations about how to fairly compensate athletes.

Wilken, the judge in O’Bannon, recently ordered the lawsuits to trial starting Dec. 3. She essentially left the NCAA with only two arguments to use at trial: The notion that fans are drawn to college football and basketball “in part due to their perception of amateurism,” and the idea that “paying student-athletes would detract from the integration of academics and athletics in the campus community.” The results of the trial, and inevitable appeals, could dramatically reshape the NCAA.

According to McMillen, 79 percent of athletic directors in the NCAA’s highest football subdivision support players making money off their name for non-athletic related activities, and 26 percent favor giving players the right for athletic-related pursuits. Emmert, the NCAA president, has said the Olympic model – athletes receiving sponsor money in exchange for use of their name, image and likeness – is deserving of serious consideration inside the context of college sports.

“I hate to say this, I think the plaintiff lawyers are slowing this down,” McMillen said. “If you didn’t have a court case now, I think college sports could have addressed this. Now, the lawyers will say they’ve made progress because of the court cases. It’s what comes first – the chicken or the egg? But when a court case’s fundamental principle is tethered to education, it’s a slippery slope no one will touch right now. I think the ADs are more sympathetic to (players making money off their NIL) provided some of their concerns are addressed. They don’t want it to be an abusive recruiting tool.”

The NCAA’s history has been to legally fight most attempts to increase benefits for athletes. The NCAA fought two court cases over expanding the value of the traditional athletic scholarship to include additional money that covers miscellaneous costs of attending college. Now, thousands of NCAA athletes who received traditional scholarships, rather than the new cost-of-attendance version, will be compensated for the difference. Last year, the NCAA and 11 major conferences settled for $208.7 million in the Shawne Alston lawsuit, which was impacted by the O’Bannon decision.

The ongoing NCAA college basketball scandal brought by federal prosecutors reflected, not surprisingly, that under-the-table payments to players by coaches, financial advisors and shoe companies are common in the sport. Three criminal cases are tied to the FBI investigation, which has resulted in 10 arrests, including charges against assistant basketball coaches at Auburn, Oklahoma State, Arizona and Southern California.

According to a Yahoo! Sports report in February, federal documents show an underground recruiting operation that could create NCAA rules issues for at least 20 Division I basketball programs – including Duke, North Carolina, Texas, Kentucky, Michigan State, Southern California, and Alabama – and more than 25 players. The amounts of impermissible benefits reported by Yahoo! Sports for one sports agency ranged from $70 for a lunch with a player’s parents to tens of thousands of dollars and loans to a former North Carolina State player.

“These allegations, if true, point to systematic failures that must be fixed and fixed now if we want college sports in America,” Emmert said in a statement in February 2018. “Simply put, people who engage in this kind of behavior have no place in college sports. They are an affront to all those who play by the rules.”

Yet the reality is value does exist for some players above their athletic scholarship. That was highlighted in the O’Bannon case. A vice president of videogame maker Electronic Arts Sports testified that his company wants to pay players for the right to use their NILs in popular NCAA videogames that have been discontinued. EA Sports previously used the likeness of players without their permission, resulting in a $60 million settlement with plaintiffs. The average payout was expected to be around $1,600, with some players receiving several thousand dollars depending on how frequently their likeness appeared in the videogame.

A slight majority of American adults (52 percent) still believe a full scholarship is adequate compensation for a college athlete, according to a 2017 nationwide poll by The Washington Post and the University of Massachusetts Lowell. The racial divide was noteworthy: 54 percent of black Americans support paying NCAA athletes based on revenue they generate, whereas only 31 percent of white Americans support the concept.

Gaining public traction is the idea of allowing players to make money if their NIL is sold through merchandise (66 percent of Americans are in favor). A racial gap exists here as well: 89 percent of blacks say athletes should be paid for use of their NIL, while 60 percent of whites are in favor.

Some proponents of paying players argue for a free market that would reallocate the money flowing to coaches, administrators and facility upgrades to the athletes. Others argue for Congress to provide a limited antitrust exemption for college athletic departments so they could impose caps on coach pay and other athletic spending in exchange for athletes to be guaranteed more benefits, including money through use of their NIL.

“My own personal view: There could be ways to do licensing with players and make sure the companies are legit,” McMillen said. “You could set up an independent, voluntary clearinghouse where the licensing staff would negotiate on behalf of all the student-athletes, much like they do in the pros. In taking this step to help elite student-athletes, like Olympic athletes can do today, it might help reduce the ever-growing pressure for universities to pay student-athletes, and that would undermine the whole college sports model.”

In 2014, Notre Dame athletic director Jack Swarbrick made the rare public case by an AD that college sports could manage group licensing for athletes to be paid immediately. He argued that the NCAA’s problems stem from years of rules that differentiate athletes from the general student body, such as not allowing players to make money off their own name.

“You could have a group-licensing approach and say, OK, this group licensee can do a deal with EA Sports for student-athlete image and likeness, and we’ll go to EA Sports and negotiate it for all of the student-athletes,” Swarbrick told CBSSports.com. “Here’s what it’s worth if you wear the jersey in the EA Sports video(game) and here’s what it’s worth if you don’t. You get a market read on it and you distribute it based on the way all group licenses work.”

Nothing in the NCAA’s history suggests it would proactively take such an approach. Allowing players to be paid by outside entities might require a court ruling, federal legislation and/or a player boycott. Big 12 Conference commissioner Bob Bowlsby predicted in 2015 that the day will come when players decide not to play in a major college sporting event.

The Olympics once passionately believed in the evolving definition of amateurism. Paid professional athletes were not allowed. During the 1980s, the move toward professionalism gradually gained full steam sport by sport over several years. The change was aided in part by the suspicion that athletes from some Eastern Bloc nations were already professionals anyway through full-time support and training by their governments.

The public hasn’t stopped watching the Olympics with professionals. Making money through endorsements while being good at a sport doesn’t seem to hurt interest in the Olympics, which once had the most stringent definition of amateurism. In 1960, athletes who simply had decided to turn pro were no longer amateurs under Olympic rules.

College sports is gradually changing amateurism definitions, too. Times change, as reflected by some NCAA members’ concerns in 2016 about allowing an Olympian to get paid $740,000 while still competing in college. Some money is OK, in the view of NCAA members, but where’s the limit?

If swimmers and gymnasts can be paid for winning at the Olympics, why not basketball and football players for other forms of outside compensation? If $740,000 is deemed too much for Schooling to accept from Singapore while swimming for the University of Texas, why would American swimmer Katie Ledecky making $115,000 from the Olympics be OK to swim at Stanford? And for that matter, since Ledecky made $115,000 from Olympic success, why did NCAA rules prevent her from making endorsement money and cause her to turn pro early?

Once a line has been crossed to pay athletes, what makes one amount acceptable and another unacceptable?

That’s NCAA amateurism – a floating definition that’s always evolving, consistently inconsistent, and forever under scrutiny.

Jon Solomon is editorial director of the Aspen Institute Sports & Society Program. He was an award-winning college sports reporter for 18 years, most recently at CBSSports.com.