Why the NCAA changed its stance on paid endorsements for student athletes


The National Collegiate Athletic Association directed its three divisions on Tuesday to reevaluate the rules forbidding student-athletes from receiving financial compensation from endorsements that use their name, image, or likeness (NIL). It was a sharp turn for the NCAA, which has historically pushed back against calls to allow athletes to benefit from the $1.6 billion college sports machine.

“The NCAA has never been a proactive organization,” Yahoo Sports’s Pete Thamel said on YFi AM. “They only act when a gun is pointed to their head, and they've got a few guns pointed at their head.”

The state of California last month put even more pressure on the NCAA to pay college athletes. Gov. Gavin Newsom signed into law SB 206, the Fair Pay to Play Act, which will let student-athletes in the state get paid for the use of their name or likeness. The NCAA originally vehemently opposed the bill, which is set to take effect in 2023. Twelve states, including New York, South Carolina, and Colorado, have followed suit with similar bills.

Connecticut Sen. Chris Murphy released a report in March titled “Madness Inc.: How Everyone is Getting Rich Off College Sports – Except the Players.” Murphy called out the NCAA for not “acting in the best interest of many student-athletes.”

Despite all its previous opposition, the NCAA’s board voted unanimously to update the rule “in a manner consistent with the collegiate model,” with any changes to be implemented two full years earlier than California’s bill, by January 2021.

The second pressure point that drove the organization’s governing body to change course, Thamel said, were the federal investigations into the NCAA’s basketball recruiting practices. Ten individuals in two separate trials were charged with varying degrees of bribery, conspiracy, and corruption.

‘The devil is in the details’

“This was sort of a self-congratulatory ‘we're going to do something’ announcement,” Thamel said of the NCAA rule change. There is still not an official plan laid out for the NCAA-wide change in the NIL regulations, and Thamel said most insiders repeated the warning that “the devil is in the details.”

“A lot of this is going to come down to recruiting,” he said. “Can you offer recruits and potential student-athletes in that landscape different endorsements? Because that would radically change everything, as opposed to...a star athlete like Chase Young [being] able to benefit off the sale of his jersey.”

The proposed rule changes bring into question exactly how far the NCAA can regulate the kinds of deals athletes can pursue. Everything from sponsorships from local businesses to major deals with online sportsbooks could come into play.

“Bringing amateurism into the wide world of commerce is just going to inherently be complicated,” Thamel said.

The next step in the process will be involving all 1,100 schools across the NCAA’s three divisions in conversations to shape the updated regulations. The change was enacted based on “comprehensive recommendations from the NCAA Board of Governors Federal and State Legislation Working Group.”

press release announcing the change stressed that student-athletes should still maintain the priorities of education and the collegiate experience. The new rules, the board said, should be “transparent, focused and enforceable,” and should not create a competitive imbalance for the athletes.

“It will be complicated, and it will be messy,” Thamel said.