Aug 23, 2021

Breaking News On College Athletes’ Compensation

Breaking News On College Athletes’ Compensation

Dramatic challenges and changes — even involving the Supreme Court — have gained momentum in the college sports world over the last few months, overturning what many feel are unfair compensation rules established years ago by the NCAA for college athletes to support their amateur classification.

  • On June 21, 2021, the Supreme Court unanimously ruled that the NCAA could not restrict education-related benefits for college student-athletes. While not addressing compensation specifically, it means they can now receive paid internships, computers, tutoring, and chances to study abroad — benefits student-athletes have long gone without.
  • On June 30, 2021, in response to this and other earlier legislation at the state level, the NCAA announced temporary rules governing compensation to begin July 1, 2021 that allows student-athletes to earn money through NIL (Name, Image, and Likeness) compensation as long as they followed their state’s laws. Also, if student-athletes go to schools in states that haven’t enacted legislation yet, the NCAA won’t penalize them for participating. The NCAA will be working on solutions at a federal level to cover all schools and student-athletes and plans to introduce them at the NCAA 2022 Convention.
  • Then, on July 26, Missouri became the 26th state to enact legislation addressing NIL compensation for athletes.

With Missouri’s legislation, now more than half of the country has laws allowing student-athletes compensation when their name, image, or likeness is used. These laws focus on correcting the discrepancy between the revenue schools earn from the athletes and sports programs versus no payments to athletes who are in compromised financial situations.

Top Details About NIL Compensation for College Athletes Revealed

NCAA National office complex sign complex with blue NCAA logo on it.

When it comes to revenue generated by intercollegiate sports programs and their student-athletes, how much money are we talking about? In 2016-2017, the NCAA brought in $1 billion, most of which was generated by March Madness. According to Forbes, recent estimates of top NCAA Division l schools show they earn approximately $8.5 billion in annual revenue, mostly from men’s football and basketball. But less than 7% of the revenue generated by those two sports go to its athletes in the form of scholarships and stipends for living expenses.

New NIL Legislation is a big step in the right direction.

  • Student-athletes can now receive compensation for commercial use of their name, image, or likeness. This can include being paid for autographs, appearing in an advertisement, or social media posts, to name a few areas.
  • This compensation is paid by third parties, not through or by the school.
  • The school can oversee deals and object to them if they conflict with any existing agreements (wearing another brand’s jersey, for example).
  • State laws differ on what products can be endorsed.

While full details haven’t been released, the NIL legislation will be ratified at the NCAA’s 2022 convention, planned for January 19-22, 2022 in Indianapolis, Indiana. Registration opens on September 14, 2021.

Before the convention, a constitutional review committee will be appointed in August to report to the NCAA Board of Governors in November on the recommended changes to the NCAA constitution. These changes, which will be presented at the January convention, will enable the NCAA to support college athletes more effectively.

About The NCAA Convention

The annual, four-day NCAA Convention is held every January and attracts more than 3,000 attendees to learn about issues that impact college sports, chart the course for the NCAA’s three divisions, and celebrate the successes of student-athletes. While important for all schools, attending the convention is often the only time for Division ll and Division III schools to vote on pending legislation. Because of our commitment to student-athlete health and wellness through our sports accident coverage, we look forward to hearing the latest changes and updates afterward.

In the meantime, A-G continues to work with colleges and universities to better control medical costs that result from accidents and lessen their impact on student-athletes, their families, and their schools. Interested in a quote or learning about A-G’s industry-leading claims technology, EGBAR, and how it works? Don’t hesitate to reach out. We look forward to speaking with you soon.

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