Cashing In: Athletes School The Schools On Getting Paid

What were the burghers who run California doing on their watch instead of upgrading their power grid ? Let me see. Banning fur. Check. Undocumented aliens on state boards and commissions? Check. Allowing college sports stars to get paid for the use of their likeness? Check.

Really? After all this time, they’re going to let the top performers in big time college finally get paid as much as the coaches? Heresy! 

Actually in a sea of detritus Governor Gavin Newsom may actually have found something of value. The bill, signed into law, prohibits the NCAA from barring a university from competition if its athletes are compensated for the use of their name, image or likeness beginning Jan. 1, 2023. In short, the days of sharing the revenues from pictures, videos and digital products 100/ 0 are gone.

And it will have ramifications for Canadian student athletes and the hockey leagues that compete with the NCAA for talent.

The move by America’s most populous (and progressive) state forced the hand of the NCAA, which governs athletics and student-athletes in the United States. (You may have heard of their sterling standards in allowing the decidedly unathletic daughters of Lori Loughlin  to win scholarships for sports there’d never played.) So, starting in 2023 the schools will have to come up with a formula for sharing the billions being raked in by video games, advertising and television/ digital.

The move will mark the end of a decades-long struggle by athletes to get a piece of this action. Previously the NCAA and the media sweats who apologize for it have said that a scholarship to a highly-ranked school should be sufficient compensation for putting their bodies on the line for anywhere from one to four years of eligibility. Hundreds of Canadians and many thousands of Americans have made this deal with devil over the years.

The NCAA zealously pursued this simon-pure standard with an investigative force that rooted out side deals, phoney jobs and payments to relatives from the boosters of the schools. Billions have been spent on making sure that not even a dime made its way to future millionaires before they turned professional. Many tried. Few succeeded in supplanting this scheme.

The concept made some sense as long as sports was a break-even proposition at the collegiate level. But as revenues exploded into the billions with schools and coaches becoming rich off the labours of college sports the inequity was glaring. The NCAA cracked the $1 B annual mark in revenues in 2018. Most of that revenue was realized by two mens sports, football and basketball. In effect they financed the entire structure of other mens and women sports.

Now, critics of the California legislation like to point out that a U.S. college education is no small bauble on the tree. Tuition, lodging, food and exposure to the market via a star career are hardly negligible. Just ask the graduates who now face debts in the hundreds of thousands after graduating from Bumphus ATT&T or Harvard.

Most importantly, the pro sports leagues such as the NFL, NBA, MLB and NHL went along with the narrative. They refused to accept any deviance from rules set out by the NCAA unless under extreme pressure in the courts. (I discuss a number of these precedent-shattering cases in my book Cap In Hand brucedowbigginbooks.ca)

For a long while that logic held. Outside revenues were limited to a few sources. But the explosion in digital and video games was the final straw for athletes who sought to prevent schools from using their images forever. The battle to control their own images switched to the new technology.

The first salvo was fired by former college basketball star Ed O’Bannon who launched a class action suit challenging the NCAA on its use of his image. In 2014, a district judge found for O'Bannon, holding that the NCAA's rules and bylaws operate as an unreasonable restraint of trade, in violation of antitrust law. EA Sports, the giant in the industry finalized a $40 million settlement to as many as 100,000 current and former athletes who had appeared in EA Sports' video games since 2003.

The NCAA fought on in the courts, but since California’s move they’ve conceded the hopelessness of saying no. Student athletes will now be able to accept revenues from the licensing of their names, images and likenesses in the future. 

Now what happens? Will all NCAA athletes prosper? Not likely. The star athletes who dominate their sports will likely argue for the lion’s share of the money available in sharing. The digital companies may decide to abandon using these athletes in their games to avoid payments. 

A couple of ramifications. For Canadian hockey players contemplating whether to play in junior hockey or choosing the NCAA the prospect of exploiting their image might tilt the choice in favour if the NCAA. Why ride the buses and beat yourself up playing up to 100 games a year when you can play 40 games in the U.S. and cash royalty cheques? For elite players it could be a deal breaker in making their choice.

In general, the prospect of being remunerated nicely in college could also encourage young prospects from leaving so quickly for the pros. Today many rush to the pros (with poor results) because the money to be made is too appealing. But if you can refine your game for the pros without living a spartan existence in school it might keep players in school (hello Mitch Trubisky).

Like the Olympics did decades ago, the NCAA is abandoning its simon-pure amateur standard. Only a fool will gamble on where it goes next. Did we say gambling? That’s next week’s column.

Bruce Dowbiggin @dowbboy is the publisher of his website (http://www.notthepublicbroadcaster.com). He’s also a regular contributor to Sirius XM Canada Talks Ch. 167. A two-time winner of the Gemini Award as Canada's top television sports broadcaster, he is also a best-selling author whose new book Cap In Hand: How Salary Caps Are Killing Pro Sports And Why The Free Market Could Save Them is now available on brucedowbigginbooks.ca.