Over the last few years, we have seen the NCAA loosen its rules on collegiate athletes’ ability to make money. We have seen the NCAA go from making players ineligible for accepting gifts, to now certain collegiate athletes making millions of dollars per year based off of their Name, Image & Likeness (“NIL”). Recently, there has been a major ruling on the topic of the NCAA’s NIL debacle. This ruling could potentially open the door for former collegiate athletes to recover from the NCAA for barring them from making money off of their own status. This could open up the NCAA to billions of dollars in damages.
Prior to players being able to make money off of their NIL, many thought that it was absurd that players bringing in millions of dollars to their respective schools could not get a “piece of the pie”. However, over the years this has changed, and now players can more or less operate as if they were professional athletes. Players are free to receive gifts, be paid for advertisements, and even make money from signing autographs. With only a small fraction of college athletes making it to the next level, the ability to make money in college has allowed many college athletes to provide for their families and create a firm financial foundation for themselves.
As previously mentioned, this was not always the case. There were many players who could’ve made millions in NIL deals if it wasn’t for the NCAA’s strict policies prohibiting this. This is especially evident when former players are seeing the massive deals players are getting nowadays. The top three NIL earners in 2023 were: Bronny James with an NIL valuation of $6.1 million, Shedeur Sanders with an NIL valuation of $4.1 million, and Livvy Dunne with an NIL valuation of $3.2 million. At $4.1 million, Shedeur Sanders is making more as a junior in college than about 60% of all NFL quarterbacks. With these numbers, it is easy to see why former college athletes, especially the more popular ones, are upset with the NCAA.
On November 3rd, a federal judge, Judge Wilken, granted class-action status in the damages portion of the antitrust lawsuit filed against the NCAA and the Power Five conferences. This will allow former college athletes to possibly recover money they would have otherwise earned had the NCAA rules not been in place prohibiting the athletes’ ability to do so. The ruling will allow for 6,300 football and men’s basketball players, over 850 women’s basketball players, and nearly 7,400 athletes from other sports to be entitled to damages.
The athletes are claiming almost $1.5 billion dollars in damages, which could increase significantly due to the fact that antitrust cases allow for treble damages. Additionally, the ruling will allow these student-athletes to “get a portion of lost earnings from TV broadcast rights and video game deals in addition to NIL backpay.” The former athletes are claiming that they are owed at least 10% of the revenue streams from college sports broadcasts.
The NCAA is claiming that the 10% valuation has no basis and should not be such a high percentage. However, Judge Wilken did not agree with the NCAA’s stance. She stated that she sees “ample support for plaintiffs’ assumption that student-athletes NIL in broadcasts have value, and that their value is at least ten percent of the revenues of defendants’ broadcasting contracts.” Furthermore, the NCAA came out and criticized the Judge’s ruling stating that “the NIL market is inherently too distinct for thousands of athletes to claim the same kind of harm from lost earnings.”
With trial set for January of 2025, it will be interesting to see how this plays out and how it impacts the NCAA’s NIL policies. With Congress not providing an NIL bill, it is up to each individual state to make its own NIL policies. However, with the ever-increasing issues the NCAA is facing regarding NIL policies, the NCAA would be wise to sit down and rethink the policies they currently have. This could potentially include a revenue sharing model between the NCAA and its athletes, or even a complete restructuring of the NCAA and amateur sports as we know it.