As ‘avalanche’ hits NCAA and paying players debate continues, change is coming

With College Football Playoff expansion and NCAA men’s basketball tournament rights totaling $2.4 billion annually and women’s basketball’s most marketable player in history — Iowa’s Caitlin Clark — launching her sport to unprecedented television viewership, collegiate sports appear healthy, vibrant and lucrative. That goes for everyone except the participants.

Questions are brewing from college officials to legal scholars about whether athletes should receive a piece of the postseason revenue. Those discussions have spilled over to athlete rights and employment status, both of which likely will be determined in federal court.

NCAA president Charlie Baker, who spoke briefly before Sunday’s women’s championship game, said he wants “to make some changes to how support for student-athletes works in Division I.”

“We’ve done a number of things that are ready to deal with that, but I’m not going to get ahead of the membership on that sort of thing,” Baker said. “I’m sure it’s a conversation we’ll be having.”

But where does the membership stand on paying players? Judging from a recent panel discussion at the University of Iowa, legal scholars and experts are all over the place. With lawsuits threatening to blow apart the current amateur model and the prospect of a college football super league looming in case it does, the questions are endless. But authorities agree change is coming — fast.

“The avalanche has officially hit the NCAA,” said Dan Matheson, Iowa’s director of sport and recreation management program and a former NCAA associate director of enforcement.

In the wake of the U.S. Supreme Court’s 9-0 Alston ruling in 2021, which allowed athletes to receive compensation for name, image and likeness (NIL), legal issues continue to mount for the NCAA. A National Labor Relations Board regional director ruled this year that Dartmouth men’s basketball players are employees. In a complaint filed with the NLRB and testimony ongoing, the National College Players Association considers USC athletes employees of the university, the Pac-12 and the NCAA. In addition, a class-action antitrust lawsuit regarding past NIL rights could cost the NCAA and its membership more than $5 billion.

With players allowed to generate income off their NIL, employment is the last step in the blurry barrier between amateur and professional status. It’s the most difficult one for most experts to navigate because no one can agree on the parameters. Is it just the athletes from revenue-generating sports or all of them? How will it impact Title IX? How much will each athlete earn? Will non-revenue sports survive?

Looking forward to a riveting panel discussion AND 2.0 CLE hours for all you lawyers in the area! There’s a livestream option here: pic.twitter.com/TZSgHoCUga

— Dan Matheson (@DanMatheson) March 27, 2024

Alicia Jessop, a Pepperdine sports administration professor who doubles as the school’s NCAA faculty athletics representative, demanded the NCAA shift course and accept that athletes are employees. Jessop, a member of the NCAA Division I men’s basketball oversight committee and a practicing attorney, argued that putting up resistance and talk of collateral damage is “fear-mongering.”

“The NCAA continues to unsuccessfully and to the tune of millions of dollars in lobbying fees try to persuade Congress to grant it antitrust immunity,” Jessop said. “The likelihood of Congress passing such bills is as good as Caitlin Clark not being the No. 1 overall WNBA draft pick.”

Husch Blackwell law partner Jason Montgomery, a former NCAA lead investigator, disagreed.

“It’s clear that the NCAA is on the worst losing streak in sports since the Bills’ four Super Bowl losses. They are terrible at litigating,” he said. “But current and well-established law in this country says that college athletes are not employees. The Department of Labor says they’re not employees. No federal court has ever said they’re an employee.”

Universities are concerned employee status and compensation would bankrupt athletics departments. Paying athletes could force some departments to eliminate many non-revenue sports, which form the lifeblood of Olympic rosters. Nevius Legal attorney Libby Harmon, who worked as a lead NCAA investigator for 10 years and also served as compliance director at Michigan, said of the 626 athletes for Team USA in the 2020-21 Olympics, 76 percent were current or former athletes from 171 different institutions.

To Jessop, any attempt to trim Olympic sports is an excuse. She cited numbers from USA Today that most Division I coaches averaged a 15.3 percent salary increase in 2021 — after the pandemic financially crushed many departments — plus soaring salaries alongside modest scholarship increases. In the 2023 fiscal year, Ohio State athletics spent more than $90.7 million on coaches and staff salaries while paying $23.8 million for athletic scholarships, according to figures obtained by The Athletic. Harmon brought up Texas A&M’s $75 million buyout of football coach Jimbo Fisher saying, “That could fund Division I athletic departments multiple times over.”

“Don’t buy that there is no money in the system,” Jessop said. “This will require the reallocation of funds. Top college coaches will see pay reductions, strength trainers will no longer earn $1 million per year.”

Still, it is naïve to expect athletics departments not to continue to invest in football and men’s basketball, the only two sports that generate profits at most power conference schools. Disrupting the system to include employee status, Montgomery argued, could bring it all down. Over the last three years, athletes now have money-making opportunities from NIL, full-ride scholarships up to the cost of attendance and around $6,000 each year in educational rewards.

“The popularity of college sports is at an all-time high,” Montgomery said. “The popularity of television in college sports is at an all-time high. Women’s sports are at an all-time high. And NCAA membership schools in the system produce the most Olympic athletes. So things are going really good in college sports. Let’s change everything. That makes very little business sense and it makes very little practical sense.”

In addition, if athletes are considered employees, programs could hire and fire them based strictly on performance.

“If student-athletes become employees, what does that relationship look like?” asked Josh Lens, an Arkansas sports and recreation professor, who formerly worked in Baylor’s compliance office. “I think it becomes more of an arm’s length relationship between the athletics department and coaches and their athletes, and it resembles more of a professional mode.

“There are great coaches out there and great people out there who truly care about their athletes; that doesn’t necessarily go away. But I think the dynamic changes if an athlete knows that they can have their scholarship taken away.”

The future

So what happens in five or 10 years? Most experts believe changes will take place, including those who want the current system to remain in place. But how extreme remains up for debate.

“This domino is going to fall. It’s not if, it’s when,” Jessop said. “There’s going to be widespread employees at some colleges.”

“I think it’s either going to be some employment model or some other revenue-sharing model. Either way, athletes are going to be compensated outright in the next five years,” Harmon said. “What that looks like remains to be seen.”

“I vehemently disagree that we should change our successful model that is the envy of the world to go to an employment-based model,” Montgomery said. “We can come up with different distributions, and there are areas certainly that the collegiate model needs to improve in. But I think it’s still going to be litigated in the next five years.”

Some believe a school or a conference will direct revenue toward athletes. Lens said he knows plenty of athletic administrators who want to bargain with their athletes right now.

“The NCAA might try to kick them out,” Lens said, “but somebody is going to take a very progressive step and do that on their own.”

Many, if not most, athletic departments are preparing for the next step and want closure as soon as possible. In an interview with The Athletic, Iowa athletic director Beth Goetz said, “There’s not a day that goes by where we’re not talking about what the future of college athletics would look like.” That also includes discussion of a super football league, reported last week by The Athletic, in which one entity would control college football with a union and collective bargaining. That would offload the antitrust issues the NCAA perpetually faces.

“We all want what’s best for college athletics and college sports and if you’re really trying to figure that out, putting limits on ideas that come out, I don’t know if that always makes sense,” Goetz said about the football super league. “Whether or not this is something that we really should pursue, I don’t know yet. But there might be some pieces of that that actually lead to a solution. … I think those are good conversation starters.”

 (Photo: Steph Chambers / Getty Images)