Once upon a time, collegiate athletes across the United States were prohibited from engaging in activities to generate revenue without losing their eligibility (and scholarship) to compete in their sport. There have been long and heated debates over whether student-athletes, particularly in major revenue generating sports like Division I football and basketball, should be paid or have the opportunity to take endorsements. Considering the amount of revenue these teams consistently generate for their universities and the college-sports ecosystems, this issue has caught nationwide attention for decades.

For the 2021 fiscal year, the Southeastern Conference (SEC), generated $833 million in revenue, which was a $105 million increase from the 2020 fiscal year, leading all Division I conference in revenue generation. The Atlantic Coast Conference (ACC) ranked third at $578.3 million, earning an $82 million increase from the 2020 fiscal year as well. The Big 10 ($679.8 million), Big 12 ($356 million) and the Pac-12 ($343.5 million) generated significant revenue despite suffering $89 million, $53 million, and $190 million losses respectively.¹

Nick Saban, head coach of the University of Alabama (SEC) football team, made $9.7 million in 2021², but with his new contract extension, he will make $10.7 million in 2022, and then average about $11.7 million per year until 2029.³ Bill Self, head men’s basketball coach for the University of Kansas (Big 12) brought in $10,184,282 for the 2021-2022 season, leading all Division 1 basketball coaches in salaries.⁴ In September of 2020, Saban, as well as other Division 1 football and basketball coaches, were the highest-paid state employees in 40 out of 50 of the United States. Some states even include assistant coaches to be within the top three highest-paid public employees.⁵

One might ask themselves, if the coaches of these teams are making salaries comparable to professional athletes, without having to barrel through a defensive line or hit a game-winning three-pointer, and the biggest conferences are generating hundreds of millions in revenue every year, why couldn’t student athletes receive anything more than their cost of attendance, which doesn’t (yet) exceed $100,000 per year, minus tuition, room and board, books, etc.?

The reality is despite how much revenue university football and basketball programs generate, or funds distributed to the conference’s respective partner schools through the revenue sharing model, there simply isn’t enough money for most college athletic departments to break even, let alone pay athletes.⁶ This applies to a large majority of Football Bowl Subdivision (FBS) schools and is increasingly difficult since university athletic departments operate their own revenue sharing model by which all other university teams are largely (or entirely) funded from the revenue generating sports. In most cases this money is coming from the football team and the basketball teams (specifically the Men’s March Madness Tournament).⁷ To put this into perspective, only 25 of 1100 schools across 102 conferences across all three divisions had a positive net income in 2019.⁸ With so much financial loss, it would be extremely difficult to add the expense of paying student-athletes, and maintaining standard operations, even if that money were taken from somewhere else.

However, the biggest question was one that took almost 170 years to answer: Why were student-athletes unable to seek employment or endorsement opportunities using their image and likeness the same way the NCAA or their university’s marketing and sales departments were to drive engagement, sell tickets, and generate revenue?

The NCAA’s main argument was that it would destroy the collegiate model, the allure of amateurism, introduce many of the employment disputes found in professional sports, and lead to significant imbalances in recruiting ability favoring schools with the deepest pockets.

However, this argument no longer held up and the college sports landscape was long overdue for a change.

From the 1852 Harvard-Yale Regatta, the first intercollegiate sporting event⁹, to the unanimous 9-0 decision by the U.S. Supreme Court in NCAA v. Alston, holding that NCAA member institutions were in violation of Section One of the Sherman Antitrust Act in June 2021, there has been nearly an entire dynamic shift between student athletes and receiving compensation.¹⁰ By June 30^th, 2021, The NCAA adopted an interim name, image, and likeness

(NIL) policy that would allow student athletes in all three divisions to engage in NIL opportunities, even if their state did not have an NIL statute in place.¹¹

In July 2022, a little over a year later, twenty-nine states passed legislation that acknowledged the developments in college athletics and address how student athletes within their jurisdiction would be able to participate in NIL activities. Twenty-four of these state laws are currently in effect, with the remaining five slated to take effect in July of 2023 (New Jersey takes effect in 2025).¹²

There is another group of ten states that are still in the proposal or legislative process.

Restrictions on the length of student-athlete contracts, bars on pay-for-play or performance incentives and subjecting the athletes to the NIL policies of their respective institution are commonalities these state statutes share. Many of the early adopters of NIL laws, like Alabama, have since amended or suspended their initial laws to make them less restrictive and more athlete-friendly.¹³

However, the inconsistency amongst state NIL laws has raised a lot of concern amongst university coaches and administrators because the lack of uniformity has impacted recruiting, enforcement (or lack thereof), and have schools following different rules. Federal NIL legislation has the ability to bring ‘order to the chaos’ and provide a uniform set of regulations and standards all NCAA participating schools would need to adhere to. However, like most contemporary issues, student-athlete rights and NIL have turned into a partisan topic that has Democrats and Republicans struggling to compromise on issues regarding the scope of legislation.¹⁴ There have been eight federal laws proposed since 2019 on this issue and each failed to garner enough support to be passed. Until lawmakers in Congress can come to an agreement on whether to limit the bill to strictly to NIL, or expand it to issues like health care, revenue sharing, and collective bargaining, student-athletes will further be restricted by the laws of their state and the policies imposed by their school.¹⁵

As one could imagine, NIL has the potential to, and already has begun leveling the playing field for student-athletes to reap the true rewards of their hard work and platform. It has given athletes across the country opportunities to prepare for life after sports or even financially support themselves and their families in a way they couldn’t have without risking eligibility or until/if they went pro. This growing area of the sports industry is incredibly young and has a lot of potential for growth, but just as much potential for corruption and scandal. It is up to the NCAA, university leadership, the government, student-athlete advocates, and the student athletes themselves, to work together in order to promote equitable practices in the NIL space.

¹ Keith A. Farner, SEC Becomes 1 of 2 Power 5 Conferences to Show Revenue Increases in Fiscal 2021, Saturday Down South, (May 20, 2022), https://www.saturdaydownsouth.com/sec-football/sec-becomes-1-of-2-power 5- conferences-to-show-revenue-increases-in-fiscal-2021/).

² Edward Sutelan, Nick Saban’s Salary & Net Worth: Here’s How Much Money the Alabama Coach Made in 2021, SPORTING NEWS, (Dec. 31, 2021), https://www.sportingnews.com/us/ncaa-football/news/nick-saban-salary-net- worth alabama-coach-2021/7v1yrapfp5lozin062r07cav.

³ John Riker, College Football Coaching Salaries: SEC, BUSINESS OF COLLEGE SPORTS, (Sept. 20, 2022), https://businessofcollegesports.com/coaches/college-football-coaching-salaries-sec/.

⁴ Ryan Hannable, Top College Basketball Head Coach Salaries: Highest-Paid Coaches, BETMGM, (Aug. 18, 2022), https://sports.betmgm.com/en/blog/ncaab/top-college-basketball-head-coach-salaries bm10/.

⁵ Samuel Stebbins, College Coaches Dominate List of Highest-Paid Public Employees With Seven-Digit Salaries, USA TODAY, (Sept. 23, 2020), https://www.usatoday.com/story/money/2020/09/23/these-are-the-highest-paid- public employees-in-every-state/114091534/.

6 SCOTT BUKSTEIN., THE BUSINESS AND GOVERNANCE OF COLLEGE SPORTS 185–194 (2018) (ebook)

⁷ Id.

⁸ Mark J. Drozdowski, Do Colleges Make Money From Athletics?, BESTCOLLEGES.COM, (Aug. 24, 2022), https://www.bestcolleges.com/news/analysis/2020/11/20/do-college-sports-make-money/.

⁹ Blair Shiff, The History Behind America’s Oldest Active Collegiate Sporting Event, ABC NEWS, (June 9, 2017), https://abcnews.go.com/Sports/history-americas oldest-active-collegiate-sporting-event/story?id=47852376.

¹⁰ James A. Morsch, et al., NCAA v. Alston Debrief: After Unanimous Supreme Court Sinks NCAA’s Limit on Educational Benefits for College Athletes, What Lies Ahead?, SAUL EWING ARNSTEIN & LEHR LLP, (June 25, 2021),https://www.saul.com/publications/alerts/ncaa-v-alston-debrief-after-unanimous-supreme court-sinks- ncaa%E2%80%99s-limit-educational-benefits-college.

¹¹ Michelle Brutlag Hosick, NCAA Adopts Interim Name, Image, and Likeness Policy, NCAA, (Dec. 28, 2021), https://www.ncaa.org/news/2021/6/30/ncaa adopts-interim name-image-and-likeness-policy.aspx.

¹² Andrew H. King, How US Federal and State Legislatures Have Addressed NIL, SQUIRE PATTON BOGGS (US) LLP, (July 13, 2022), https://www.natlawreview.com/article/how-us-federal-and-state-legislatures-have-addressed- nil.

¹³ Id.

¹⁴ Ross Dellenger, Republican Senator Reintroduces Bill That Takes Aim at NIL’s Recruiting Influence, SPORTS ILLUSTRATED, (Sept. 14, 2022), https://www.si.com/college/2022/09/14/ncaa-nil-federal-bill-congress-roger-wicker.

¹⁵ Andrea Brockway, et al., Nil Legislation Tracker, SAUL EWING ARNSTEIN & LEHR LLP, (July 2, 2021), https://www.saul.com/nil-legislation-tracker.