New endorsement rules will better prepare college athletes for the business world
By David S. Wyatt, Esq.
College athletics have just received a shot of disruption. The stage is set to allow college athletes to sell their name, image and likeness through endorsements and related publicity rights licensing deals. Depending on your perspective, this is either great or it's a tragedy.
Some argue that allowing college athletes to sell their image and likeness will ruin the team dynamic because of greed and jealousy. They predict the higher profile players (i.e., about 1 %) will be the only athletes able to generate high-earning national deals, which will cause dissention on teams from the other players getting little to nothing. They argue this unfair earning dynamic will torpedo the noble underpinnings of amateurism, effectively ruining college sports.
Others argue there will be a market for players in the small business community and that players and businesses will benefit on multiple levels. They argue that athletes work 40+ hours a week at their sport which justifies them earning money from their image and likeness.
The outlook dramatically changed in September 2019 when California Gov. Gavin Newsom signed into law the Fair Pay to Play Act allowing college athletes to profit from their name and likeness. The law takes effect January 1, 2023. This is directly contrary to the NCAA's current rules on amateurism, which renders student-athletes ineligible to accept compensation for "the use of his or her name or picture to advertise, recommend or promote directly the sale or use of a commercial product or service of any kind."Initially, the NCAA came out strong against the California law.
However, South Carolina and at least nine other states—along with members of the U.S. House and Senate—announced plans to introduce special legislation to follow California's lead. Not surprisingly, the NCAA quickly softened its position and announced its intent to revise its amateurism rules to allow college athletes to profit from their name and likeness.
NCAA President Mark Emmert released a statement that his organization wants to avoid "pay to play"in college athletics. Emmert wrote, "As a national governing body, the NCAA is uniquely positioned to modify its rules to ensure fairness and a level playing field for student-athletes."
Emmert added that the NCAA is on "a path to enhance opportunities for student-athletes while ensuring they compete against students and not professionals."
The rules are set to be amended and in place by January 2021. However, it remains unclear just how the landscape will shake out when the NCAA finally amends its rules. For this analysis, we'll assume college athletes will be able to license their name, image and likeness in the way that the professional and Olympic athletes currently do.
There are a lot of unknowns associated with the future of college athletes and these changes and their impact on collegiate sports. However, a strong argument can be made that this will facilitate and accelerate the collaboration between the business and student-athlete community to solve problems for student athletes and available workforce.
Today, many athletes lack an understanding of the job market and opportunities therein. Additionally, because of the demanding schedules and NCAA limitations on earnings for scholarship athletes, they also lack the experience gained through internships and part-time summer- and winter-break jobs. This lack of business experience and understanding currently contributes to some of the difficulties college athletes have when making the transition from the playing field to the job market.
Almost all sectors of the economy are experiencing a growing lack of human capital (i.e., "quality employees"). Workforce development has become a buzz phrase and has motivated employers to recognize that athletes learn great soft skills through competition and team sports that translate nicely to the workplace.
This new law and future NCAA changes should open the door to athletes to work with businesses in using their image and likeness to promote businesses in multiple ways. This will be great for all involved—a win-win-win. The athletes will learn how to work with people in the "real world"and small business will be able to afford the benefits of celebrity endorsers due to the ready market of collegiate talent.
Ostensibly, the opening of college athletes for celebrity endorsements and appearances will broaden the market available for small and large business. These opportunities will help develop the players' business acumen and help them make their career plans for their future.
Athletes can gain experience working with employers during college and develop skills and connections to help secure their future. This is at least one positive benefit that everyone can get behind.
David Wyatt is the managing partner with the Wyatt Law Firm, which provides comprehensive legal representation to all its clients from multinational companies to the sole proprietor. Wyatt also is the chairman of the S.C. Football Hall of Fame. Learn more at seblawfirm.com.