Janice Lozano
There is an ongoing debate about whether student athletes should be paid. Supporters of paying student athletes argue that athletes generate billions of dollars in revenue for their universities while sometimes struggling to meet basic needs as students. Additionally, the risk of injuries is high in sports, and serious injuries can have long-term consequences on a college athlete's career prospects and physical health. Opponents of paying student athletes argue that paying athletes detracts from the primary purpose of college, which is to provide an education. They also argue that paying athletes could create a divide between different sports and athletes, with only a few athletes in marquee sports benefiting financially. While student athletes are not paid salaries, they can receive financial assistance in the form of athletic scholarships, grants, loans, and merit aid. Recently, the Supreme Court ruled that student athletes could profit from their name, image, and likeness, enabling them to earn compensation through endorsement deals, personal appearances, and corporate sponsorships.
| Characteristics | Values |
|---|---|
| Current payment status | College athletes are not paid for participating in college sports in accordance with NCAA rules. |
| Scholarship status | Athletes may be eligible to receive athletic scholarships from their college or university to help pay for tuition, books, and other expenses. |
| Scholarship availability | Only Division I and Division II schools offer athletic scholarships. Division III schools do not. |
| Scholarship amount | The average amount of an athletic scholarship is $18,000, only a small fraction of tuition for private universities or out-of-state tuition for public universities. |
| Scholarship type | The vast majority of Division II scholarships are only partial scholarships, not full-tuition or full-ride scholarships. Full-ride scholarships are generally reserved for men's basketball and football, and women's basketball, tennis, volleyball, and gymnastics. |
| Scholarship renewal | Full-ride scholarships at Division I schools are often one-year deals that may or may not be renewed. |
| NIL deals | The Supreme Court ruled in 2021 that student-athletes could receive payment for using their names, images, and likenesses. |
| NIL deals example | Caleb Williams, the current Chicago Bears quarterback, made millions of dollars in NIL deals while at the University of Southern California. |
| NIL deals regulation | In July 2023, multiple bills were introduced by members of Congress to regulate NIL. |
| NCAA settlement | In May 2024, the NCAA settled the House v. NCAA class action lawsuit for $2.8 billion, paving the way for schools to start sharing broadcast revenue with players. |
| Unionizing | There will likely be a dramatic effort to attempt to unionize paid players. |
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What You'll Learn
Student athletes' compensation through scholarships
The issue of student-athlete compensation has been a topic of debate for many years, with the National Collegiate Athletic Association (NCAA) historically resisting efforts to compensate athletes beyond scholarships and stipends. The NCAA has traditionally forbidden players from accepting external forms of compensation, instead offering athletic scholarships that cover the cost of tuition and other academic expenses.
However, in recent years, there has been a growing movement to provide additional compensation to student athletes, particularly in the form of payment for name, image, and likeness (NIL) rights. This movement gained momentum in 2019 when California became the first state to allow student-athletes to accept compensation for their NIL rights. The "Fair Pay to Play Act" bill, signed by Governor Gavin Newsom, was a significant step towards recognising the value that student-athletes bring to their colleges.
The Supreme Court's decision in NCAA v. Alston in 2021 further supported this movement by allowing for non-scholarship earned income across every division. The Court rejected the NCAA's "amateurism" argument, stating that it was an overly broad and outdated defence for failing to compensate revenue-driving student-athletes. This decision shed light on modern federal attitudes towards student-athlete compensation and the need for reasonable rules and guardrails to protect collegiate athletics.
While the discussion surrounding student-athlete compensation continues to evolve, scholarships remain a significant form of recognition for student athletes. However, it is important to note that not all athletes receive full-ride scholarships, and the scholarships may not cover all school-related expenses. As such, the ongoing debate surrounding additional compensation aims to ensure that student-athletes receive fair and reasonable recognition for their contributions to their colleges and the broader sports community.
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Student athletes' right to use their name, image and likeness for endorsements
Student athletes in the United States have historically been barred from receiving compensation beyond scholarships and stipends, with the National Collegiate Athletic Association (NCAA) defending this stance in the name of "amateurism". However, in recent years, there has been a growing push for student-athletes to be compensated for the use of their name, image, and likeness (NIL).
The concept of NIL is rooted in the "right of publicity," which gives individuals control over how their identity is used for commercial purposes. In 2019, the state of California passed the Fair Pay to Play Act, authored by state senators Nancy Skinner and Steven Bradford, which allowed student-athletes to accept compensation for their NIL. This marked the first time that student-athletes in the United States were granted the right to profit from their NIL.
Following California's lead, other states began introducing similar legislation. As of 2021, thirty-two states had passed student-athlete NIL laws, with common provisions including preventing schools from withholding athletic eligibility for those who exercise their NIL rights and allowing student-athletes to hire agents or attorneys. These laws put pressure on the NCAA to enact rule changes, and in June 2021, the organization adopted an interim NIL policy, allowing student-athletes in all divisions and sports to benefit from their NIL.
The NCAA's interim NIL policy allows athletes to engage in NIL activities as long as they follow state laws and the rules of their school. This has opened up opportunities for student-athletes to earn money through sponsorships, endorsements, social media, and other business ventures. For example, the University of North Carolina partnered with a licensing agency to help its student-athletes profit from their NIL on jerseys and in video games. While the NCAA's policy is a step forward, there is still a lack of federal legislation or specific NCAA NIL rules, which can make it confusing for student-athletes to navigate the varying state and school regulations.
The Supreme Court's 2021 decision in NCAA v. Alston further supported the push for student-athlete compensation, striking down any potential limitations on education-related benefits that student-athletes may receive. The Court rejected the NCAA's "amateurism" argument as outdated and recognized the highly profitable nature of college sports. This decision, along with state laws and the NCAA's interim policy, has empowered student-athletes to take control of their personal brand and income, while still maintaining their college eligibility.
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Student athletes' safety net in case of injuries
The issue of student-athlete compensation has been a topic of debate for many years. While college athletes are not paid salaries for participating in college sports, there have been developments in the form of scholarships, endorsements, and state laws that allow athletes to profit from their name, image, and likeness (NIL). The NCAA has historically resisted efforts to compensate athletes beyond scholarships and stipends, but the landscape is changing.
The safety net for student athletes in the event of injuries is a crucial aspect of the discussion. Participating in high-intensity sports comes with inherent risks of injuries, which can have long-term consequences on both physical health and career prospects. To address this, insurance coverage is available to protect student athletes. The NCAA, NAIA, and NJCAA require member schools to offer comprehensive athlete insurance coverage, and many schools opt for blanket excess accident insurance. However, this may not always be sufficient, and athletes can be underinsured in the event of severe injuries.
To enhance the safety net, specialised insurance providers offer Catastrophic Injury Insurance. This type of insurance is designed to cover the financial impact of major injuries, such as severe spinal or brain trauma. It provides disability benefits and cash coverage, addressing loss of income, medical care, and family expenses. By having this insurance, student athletes can focus on their recovery without the additional stress of financial worries.
Additionally, sports safety policy changes play a vital role in protecting athletes. The implementation of heat acclimatization policies by the NCAA, for example, has successfully reduced the number of exertional heat stroke (EHS)-related deaths during August practices. Other policies, such as access to automated external defibrillators (AEDs), instruction on proper tackling techniques, and sickle cell trait (SCT) screening, are also crucial in preventing sudden deaths during sports activities.
The NCAA has also taken steps to provide further support for student athletes. Beginning August 1, 2024, the NCAA will offer member schools post-eligibility injury insurance coverage for student athletes. This additional insurance option demonstrates the organisation's recognition of the importance of protecting athletes beyond their eligibility period.
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Unionizing and collective bargaining for student athletes
The issue of whether college athletes should be paid has been a subject of long-standing debate. College athletes can generate millions of dollars for their universities, but some athletes struggle to meet their basic needs. While college athletes are not paid for participating in college sports, some receive "compensation" through partial or full athletic scholarships.
In 2021, the Supreme Court ruled that student-athletes could receive payment for the use of their names, images, and likenesses. This ruling enabled student-athletes to receive compensation via booster gifts, brand deals, corporate sponsorships, and support from other sources. In 2024, the NCAA agreed to a proposed settlement in a class-action suit, commonly referred to as House vs. NCAA, which would allow schools to share broadcast revenue with players. This settlement paves the way for student-athletes to receive direct pay from the NCAA's member institutions.
The movement toward unionization and collective bargaining for student-athletes has gained momentum in recent years. Some individual teams have attempted to unionize, such as the Dartmouth men's basketball team, which voted to unionize with the Service Employees International Union. The National Labor Relations Board (NLRB) has played a crucial role in determining whether college athletes are "employees" under the National Labor Relations Act (NLRA). If the NLRA covers them, they will have the legal right to unionize and collectively bargain.
There are several arguments in support of unionization and collective bargaining for student-athletes. Firstly, it would eliminate the NCAA's argument that student-athletes are "amateurs", as they will now be paid directly. Secondly, collective bargaining would assist in developing a formal compensation distribution system, health and safety standards, and beneficial athletic and academic scheduling standards. Additionally, collective bargaining in unionized sports has resulted in highly regulated reserve systems that provide players with freedom of movement and access to a competitive marketplace for their services.
However, there are also concerns and potential complications regarding unionization and collective bargaining for student-athletes. Some argue that it may change the nature of college athletics and lead to unintended consequences. There are also questions about the jurisdiction of the NLRB, as it does not have jurisdiction over public or religious institutions, which could make comprehensive collective bargaining challenging. Additionally, classifying student-athletes as employees could have implications for their tax status and eligibility for student visas, especially for international students.
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Student athletes' share of broadcast revenues
There has been a long-standing debate about whether college athletes should be paid. Student athletes can generate millions of dollars for their universities, but often struggle to meet basic needs. In 2021, the Supreme Court ruled that student-athletes could be compensated for the use of their names, images, and likenesses (NIL). This ruling opened the door for student-athletes to receive endorsement deals, corporate sponsorships, and brand deals, in addition to athletic scholarships. However, this ruling did not address the issue of direct pay for student-athletes.
In early 2024, a major development occurred when the NCAA agreed to a proposed settlement in the case of House vs. NCAA, which would allow college athletes to receive a share of broadcast revenues. This settlement, which applies to the five biggest collegiate conferences, is currently awaiting final approval. It includes back pay for players from 2016 onwards and stipulates that players will receive a significant share of broadcast revenue moving forward. This development could have a significant impact on the world of college sports and the finances of student-athletes.
The financial landscape of college sports is complex, with revenue flowing through various entities such as television networks, athletic conferences, schools, and bowl game entities. The largest single source of revenue for college sports comes from television broadcast rights, which generated $4.2 billion in 2022. While this revenue flows through different layers of the system, it ultimately trickles down to the athlete level. However, the distribution of this revenue to student-athletes is not equal across sports, with higher-profile sports and conferences receiving a larger share.
The proposed settlement has raised questions about unionization and collective bargaining for student-athletes. With the potential for direct pay, the line between amateurism and professionalism in college sports becomes blurred. Additionally, the impact of revenue sharing on the finances of colleges and universities is yet to be seen, as it may affect spending in other areas such as athletic student aid, meals, sports equipment, and coaching salaries. While the details of the settlement are still being finalized, the push for student-athlete compensation continues to gain momentum.
While the exact figures and mechanisms for student athletes' share of broadcast revenues are not yet clear, the proposed settlement represents a significant step towards recognizing the value and contributions of student athletes to the multi-billion-dollar college sports industry. The outcome of this case is likely to shape the future of college athletics and the opportunities available to student-athletes.
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Frequently asked questions
Student athletes are not paid a salary for playing their sport, according to NCAA rules. However, some student athletes receive "compensation" through partial or full athletic scholarships, which can cover room, board, books, tuition, and other costs of attendance.
NIL stands for Name, Image, and Likeness. The NIL policy allows student athletes to monetise the use of their name, image, and likeness through product promotion and endorsement contracts made with third parties. This enables student athletes to receive compensation via booster gifts, agreements with companies, and corporate sponsorships.
Advocates for paying student athletes argue that the current system is unfair, with athletes generating billions of dollars in revenue for their universities while sometimes struggling to meet basic needs. Student athletes also face a higher risk of injury, which could affect their future career prospects, and have less time to hold a part-time job due to their athletic and academic commitments.
