NCAA Ruling – The Rich Get Richer

The Supreme Court recently ruled unanimously that the NCAA cannot continue it’s current revenue model where “student athletes” can basically only receive scholarships in exchange for playing sports at a school.

Educational benefits are at the forefront of the ruling, meaning students can get things like laptops for school and tutors – after all, they are students first… right?

Secondary in the ruling, and possibly more impactful, is that the door has been opened on Name, Image, and Likeness benefits (NIL).

The effects of NIL are already being seen.

Oklahoma quarterback Spencer Rattler immediately signed an endorsement deal with Raising Cane’s chicken and already has his own web store where you can get a t-shirt with his logo on it for just $27.99 or, if you’re in a colder climate, a hoodie for a mere $42.99.

In Miami, a local MMA team is offering every one of the football team’s 90 scholarship athletes $500 per month contracts. That’s over half a million dollars for players just from one source.

Sure, this seems great. Athletes are finally getting compensated for fueling the multi-billion dollar college football machine.

But, dig a little deeper and we’ll see that this is just another case of the rich getting richer.

 

THE PLAYERS

There’s an idea floating around that the NIL payments will make the world a better place because student athletes can now be paid for their likeness. While it’s a great (and long overdue) opportunity for college athletes, it’s clearly going to be a case of the rich getting richer.

The guys who are going to get the big bucks in college are the same guys who are going to get the big bucks in the pros.

Yes, it’s great that Miami players can get $500, and there may be more deals that emerge in the future where all players get something. However, they won’t all get Raising Cane’s deals and $42.99 hoodies. That will always be reserved for the Spencer Rattler’s of the world.

It’s nice that Spencer Rattler is getting paid now, but make no mistake about it: he’s a top-tier guy who is going to get paid in the NFL.

Last year, Trevor Lawrence and Kyle Pitts were among the first players selected. They were celebrated in college and would have had huge NIL endorsements had this ruling occurred a year earlier. However, neither is shedding a tear. They both signed record deals for rookies as soon as they were drafted and have enough singing bonus money that they could live comfortable lives if they were never paid another dime.

The players who are destined to get paid in the NFL will get a disproportionately NIL contracts in college – even if they don’t end up being good NFL players.

Sure, Johnny Manziel flamed out as a total bust in the NFL, but he still got a $4M signing bonus and made nearly $8M in his career. He made that because of the promise he showed in college, not because of his NFL production. He would have got a ton of NIL money to go with his fat NFL contract, even though he was an utter failure in the pros.

Jachai Polite was a big name in college who could have capitalized on NIL. He did everything in his power to ruin his draft stock. Because he had 11 sacks in college, he only fell to the 3rd round, where he got a signing bonus over $1M. He didn’t even make the roster, he never even played a single down for the team that drafted him, but he still got paid over $1M! He’s the poster child for showing that the guys who get NIL are going to get paid anyways.

NIL is basically an advance on future endorsements earnings for top college athletes.

While some players who will never go pro might get a few bucks (the Miami deal is nice, but amounts to a similar level of compensation as non-athletes with part-time jobs), the rich are getting richer.

 

THE PROGRAMS

Now that companies can invest in college athletes, where will they funnel their dollars?

We don’t know exactly, but you can bet that Alabama will get more attention than Austin Peay.

The big programs, who already have created barriers for the have-nots through their booster programs and recruiting machines are only going to get a bigger advantage in the talent marketplace.

Nick Saban is a master recruiter and now when he sits down with high school kids and their families, he will also be able to brag about how much more NIL his players get than rival schools do.

Bigger programs will also have more funding for better “educational resources” for their “student athletes.” It’s only a matter of time before we see schools start pushing the boundaries on the definitions of some of these while trying to offer athletes more enticing packages.

Super programs will also have a bigger draw for more NIL and that draw – along with more enticing “educational resources” packages – will keep them ahead of the game in talent, leading to more stratification at the top and few teams with a realistic option to win a title.

 

I personally think it’s great that college athletes can finally get NIL benefits. This should have never been an issue and it’s a welcome correction to a great injustice.

But there is no way around the fact that this is a capitalist environment.

That means you can work hard to get ahead.

It also means the rich will get richer.

This is no different.

4 thoughts on “NCAA Ruling – The Rich Get Richer”

  1. I’m interested in what it does to shift the balance of power in teams. Before, you had, just by way of the most often confirmed example, Alabama, located in the middle of nowhere, confirmed by countless ‘sources’ to be paying players. For example, Patrick Peterson who was rumored to walk away from 2 different teams based on the rumor that he expected $50,000 to sign. One of those teams, Miami, was at that time under a huge microscope due to ongoing sanctions for wait for it….boosters giving money to players. Miami passes on either the pricetag, or the risk; you decide which. Bama secures commitment for $50,000. Of the things we ‘know’ to be going on, this is just one of the most confirmed examples, and happens to be a great example of the question I have.

    Now paying players is legal. You think all of Miami’s 90 players are going to do anything to earn that $500? I don’t. It’s a legal, and TAX DEDUCTIBLE donation, er, business expense. Bama has MEGA boosters. It’s a state school, huge tradition, enrolling around 40,000 students annually. Think they can’t continue to find donors to pay 5-star players? Think they can’t match a scheme concocted to give a player $500 per month to give a single autograph and maybe snap a picture? I’m pretty sure they’ll be next.

    Now, you’d think this wouldn’t much impact a Miami, because they too have a history, a rich recruiting base, and they’re in a major city. How could this possibly move the needle for a team like that? Even though they enroll HALF the students that Bama does, and they are at a significant disadvantage as to an alumni base to draw upon, they have the CITY OF MIAMI to find people to spend money to pay their players. to an extent, this evens the odds between a Miami and a Bama, because Bama will still have a tremendous advantage in finding boosters to pay those players, and Miami has a enormous city to find business owners to get that tax deduction and get that advertising power of the star players.

    So now, a Miami can pay the players, possibly as easily or possibly easier than a Bama can. It’s a Push.

    What about mediocre teams? Can they take players from a Miami or a Bama? Teams in small cities better have some big donors, or they won’t be able to compete with the prestige or the money that comes with playing for a big city Miami or a big booster Bama.

    How about a mediocre team though, in a large city. How about Univ of Pittsburgh for ex? Enrollment roughly 35,000, more than 1.5x the students of a Miami, so more alumni to push for these agreements. Alumi available to make that tax deductible payment? Advantage Pitt. Doesn’t have the pedigree of a Miami or a Bama though. On the other hand, the team is in Allegheny County, PA, population 1.2 million. LOTS of businesses to draw upon. Bama plays in Tuscaloosa County, AL, POPULATION 200,000! Advantage Pitt. Miami plays in Dade County, Population 2.7 Million.

    Some teams like Bama will continue to be able to draw upon their enormous alumi base that has been able to foot the bill on players for decades. Some teams like Miami, who clearly did pay players but has much less alumni support to pay than a Bama, can draw on the businesses within their population of 3.0 million people, to even the odds.

    But will teams like Pitt, in MAJOR US Cities, with large alumni bases and large fanbases, start siphoning off players from the traditional powers? Can they force their way into the picture? All you need is the right coach, and the money to purchase those players, er, their likeness.

    1. Great points. It’s kinda hard to overlook that illegal payments have been made – this is just a venue to find “legit” ways to do it.

      For more on these impacts, check out CheeseHeadTV on Sunday morning – I’ll have a follow up article there looking at more ways this change things.

      1. Another topic that really needs to be explored is, so players with kids, or who live in extreme poverty, who need to stay and develop during their senior years come out early because a practice squad paycheck is THAT worth it in the short term. Or they’re simply THAT shortsighted, or they’re convinced by their street agents and hangers on, that those so called draft advisory board guys don’t know what they’re talking about….you’re a 1st or 2nd round guy, guaranteed. And then you go undrafted. If a player is making decent money in college, maybe he stays another year and develops.

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