Analysis
5/18/21
4 min read
NIL Policies Can Change the Landscape of College Recruiting
The NCAA has long had a rigid standard of amateurism for its student-athletes. Because the NCAA has had a nearly complete monopsony on feeding athletic talent into professional sports leagues, athletes have essentially been forced to comply with the NCAA’s rules to maintain eligibility.
Since the NCAA passed the “Sanity Code” in 1948, paying students in exchange for athletic services has been forbidden. In 1964, the NCAA altered that rule, deciding that they could award athletic scholarships. Since then, however, little has been done to address compensation for student-athletes – some of whom have become local and national celebrities due to the continuous commercialization of college sports.
While many college athletes are recognized by the public and that celebrity status can drive significant revenue to universities, the players themselves have been unable to capitalize monetarily due to the NCAA’s amateurism rules. This has led to a major disparity between compensation for coaches and players. Alabama football coach Nick Saban, for example, made $9.1 million in 2020. Meanwhile, since players are not compensated, many choose to leave school early to enter the professional ranks. This may benefit some, but there are others who end up leaving school before they are ready.
The debate about compensating college athletes has been raging for years, and we are on the brink of the next chapter in this story: the ability for players to profit off their name, image and likeness (NIL).
Though the NCAA has done its best to push back on players receiving benefits for their NIL in an effort to maintain their principle of amateurism, legislation has passed in multiple states that is pushing the agenda forward toward.
On Sept. 30, 2019, the state of California passed the “Fair Pay to Play Act” legislation that would prohibit universities from penalizing athletes who profit off their NIL through endorsements. This legislation, which will take effect in 2023, opened the door for other states to propose their own policies -- and 15 states have now passed NIL bills that will go into effect between July 2021 and Sept. 2025, with 12 other states actively engaging in the legislative process regarding new proposals.
Each state, however, has created its own unique set of rules for athletes profiting off NIL – and this will create new challenges in the area of recruiting.
High school athletes must now consider which college or university will best help to market them. The state of Georgia, for instance, has allowed schools to redistribute up to 75 percent of an athlete's earnings to other athletes of the school, per ESPN.
It’s possible that some smaller schools may be able to use NIL opportunities to make recruiting inroads against college football’s elite programs.
With more than a quarter of states in the U.S. having already passed NIL legislation, the NCAA has finally had to accept that modernizing NIL rules is an inevitability. While the NCAA’s board of governors appointed a group to form a proposal for an update to the NIL rules across the board, they decided on Jan. 11 of this year to indefinitely delay the vote, citing concerns of antitrust implications.
While the NCAA looks to figure out the best way to create a uniform set of rules that can be overseen federally without opening themselves up to antitrust lawsuits, the laws that many states have put forth will go into effect on July 1.
Alabama, Florida, Georgia, Mississippi and New Mexico all have state policies on NIL that will go into effect for this coming season, which could sway many athletes to transfer to these schools as they begin helping their athletes profit off their NIL.
In April, Florida State announced its “Apex NIL Program,” which is “designed to empower student-athletes to capitalize on upcoming Name, Image, and Likeness legislation,” per a press release from the team website. Other similar programs have followed, and schools are using these new rules as another recruiting tool to get ahead of the competition.
With no federal legislation in place and no push from the NCAA to institute a ruling prior to July 1, the 2021 athletic season will be a journey into the unknown as teams ratchet up the competition for recruits and learn the best practices for marketing their student-athletes. While the rest of the college football world waits to see what congressional bills will pass in the near future regarding the regulation of NIL rules, all eyes will be on the five states enacting policies on July 1.
As the NIL policies change the landscape of college athletics, we will continue to monitor the situation.
