Previously, SportSpek wrote a series against paying collegiate athletes. We stand by our argument against paying NCAA college athletes, but we endorse paying out for image and likeness where it is due.
The NCAA’s annual revenue emerges from two main streams: Division I Men’s Basketball championship television and marketing rights, as well as championships ticket sales. Events that arguably portray student-athletes’ success. If schools and coaches benefit from their athletes’ successes, how can the athletes themselves be omitted from reaping their own rewards?
Previously, college athletes were prohibited from profiting from their own performance. On October 29, 2019, the NCAA Board of Governors voted unanimously to allow student-athletes to benefit from the use of athletes’ names, images and likenesses (NIL).
The organization’s reversal was spurred on by California’s previously “unconstitutional” Fair Pay to Play Act, allowing student athletes to get paid for endorsement deals and hire sports agents, scheduled to go into effect in 2023.
“We must embrace change to provide the best possible experience for college athletes,” said Michael Drake, chair of the board for the NCAA, which governs major college athletics.
The college athlete experience extends well beyond the confines of the court. Seconds into 2019’s high-profile rivalry between Duke and the University of North Carolina, where tickets to the basketball game sold for $4,000, Zion Williamson’s Nike shoe split in half–the losses were unimaginable.
Duke suffered a loss greater than Williamson’s knee injury; the star was out for the count. Investors reacted as expected to the brand failure: Nike’s shares went down 1.4% in retaliation, an equivalent of a $1.1 billion loss. Zion’s foot apparel failure made it into sports marketing’s most disastrous moments.
Former president Obama tweeted, “Zion Williamson seems like an outstanding young man as well as an outstanding basketball player. Wishing him a speedy recovery.”
Not all schools and divisions, and certainly not all sports, generate income. SportSpek wrote on the money breakdown within college sports. And recently, we discovered something else.
Just 65 NCAA schools out of 2,078 generated $7.6 billion in revenue in 2018. Roughly 2.4% of NCAA schools generated more than half of all college sports revenue, according to Madness, Inc. According to the NCAA, the organization provides approximately $2.9 billion in athletic scholarships to over 150,000 student-athletes.
When analyzing budgets of revenue-earning programs such as the 65 Power Five Conference Programs, 12% of revenue is allocated to student-athlete scholarships, in comparison to 16% that goes toward coaches’ salaries. More is allotted for coaches than to the athletes who carry out their plays.
The NCAA has evolved from its humble beginnings as a nonprofit to a billion-dollar corporation, encouraging well-known sports companies to vie for logo placement on uniforms to broadcast across the nation. Presently, athletes reap none of the profits within the industry.
Which is why today, we’re taking a stance and siding with athletes to advocate for their rightful endorsements from image and likeness.
Defining athlete name, image and likeness (NIL):
The three elements of name, image and likeness make up the components of the legal concept, “right of publicity.”
Currently, NIL situations vary across the three divisions. Division I student-athletes, for example, cannot endorse a product or service, even if they aren’t paid to participate in the activity.
Their elevated status as student-athletes may be viewed as an unfair advantage in promotion. When it comes to pictures, if a photographer captures a photo of athletes during competition, the legal copyright belongs to the photographer and not the athletes themselves.
In accordance with the above definition, student-athletes could potentially get paid for original content creation. For example, if an athlete creates his or her own music, the athlete should have the music rights.
Most likely, the top fraction of athletes destined for the pros (roughly 2%) will benefit from the NCAA’s new take on NIL. Some companies already developed business models based on potential NIL benefits.
Who’s left out? And what kinds of problems may arise from the NCAA (and certain states) from adopting name, image and likeness rights?
We can’t forget about women’s sports. What are the likely repercussions from NIL rights on female athletes? Men’s sports have largely dominated the sports field throughout history. Despite a lack of funding in women’s sports, recent years have witnessed a flourish of women’s sports across the board. Yet women’s sports sponsorship only attract only 1% of the sports market.
From a brand and ROI perspective, women control 70-80% of consumer purchases. Will we see women continue to rise in their dominance on the court and in the purchasing realm? Time will tell if name, image and likeness will have a detrimental impact on women’s sports, or help them continue on their growth track.