(intriguing music)
- [Narrator] When it comes to college sports,
there's no bigger money maker than March Madness.
In 2019, the National Collegiate Athletic Association
raked in $1.1 billion in revenue,
with most of the money coming from the men's basketball
tournament in the form of TV rights and ticket sales.
The revenue is doled out to conferences in universities,
but none of the money goes to the players.
That's because the NCAA bars student athletes
from being paid to play.
In recent years, this has sparked an intense debate.
- With the amount of money
that the athletes are bringing in,
in particular basketball and football,
they should be compensated something.
- It changes what's special about college football!
Can we turn it into the NFL,
or who has the most money?
That's where you go.
- [Narrator] A combination of court cases,
state legislation, and public pressure
culminating in a hearing before the Supreme Court,
have expanded the scope of what is acceptable
athlete compensation, potentially redefining
what it means to be a college athlete.
The influx of money into college sports
can be traced back to a 1984 Supreme Court decision.
At the time, the NCAA negotiated
broadcast rights with networks,
and it had rules that limited the amount
of football games each school could have on TV.
The Supreme Court ruled this arrangement violated
federal antitrust laws by fixing higher prices
for fewer televised games.
And as a result, universities were free to negotiate
individual contracts with cable networks,
increasing the number of college football teams on TV.
This meant that more teams could reach a larger audience,
increasing their national profiles
and elevating their brands.
This trend continued, and since the turn of the century,
revenue generated by college athletics
has grown significantly.
During the same period,
salaries in professional sports increased.
For example, a rookie in the NBA
made close to $900,000 in 2020.
But college athletes have been limited
to receiving scholarships that cover
the full cost of attendance.
All the money flowing into sports increased
the pressure on the NCAA to maintain amateurism,
a core tenant of college athletics.
- It wants to ensure that college athletes
are focused on their education as much
as they are their athletic talents.
- [Narrator] Laine Higgins covers sports for the Journal,
and has followed the ongoing debate
on college athlete compensation.
- On top of that, there's this broad fear
that if athletes are allowed to make money,
the most talented athletes
will go to the schools with the deepest pockets.
And that will forever tilt
the competitive balance in sports
towards the schools that are the wealthiest.
- This is not amateur athletics,
it's professional athletics and that's okay.
In America, we celebrate professionalism
in all walks of life, but somehow,
the NCAA's turned that word into a bad word.
- [Narrator] Ramogi Huma is a former UCLA
football player turned advocate for athletes' rights.
- You know, whatever they want to define amateurism as,
they have the power to do that in their eyes.
They see it as a moving target.
- [Narrator] A 2006 class action lawsuit against the NCAA
contended that athletic scholarships alone
did not cover all the costs of attending school.
The NCAA settled in 2008, agreeing to provide funds
to cover some other costs.
But as college sports revenues rose,
so did attention to the hardships felt by players
trying to make ends meet while competing.
- It may not have your last name on it,
but when you see a jersey for sale, things like that,
you know, to some credit,
you feel like you want something in return.
There are hungry nights that I go to bed and I'm starving.
So something, you know,
something can change, something should change.
- [Narrator] These comments made by 2014 Final Four
Most Outstanding Players Shabazz Napier
highlighted one of the NCAA's most controversial rules.
In addition to not being allowed to be paid directly,
student athletes are not allowed to profit
from their name, image, and likeness.
Like for example, by selling their jersey.
Another case brought by former athletes
challenged this rule around the same time.
The court decision paved the way for colleges
to offer around $5,000 annually in deferred money
to players for the use of their likenesses.
But it preserved the NCAA's power
to set limits on player compensation.
This was followed by a 2019 court ruling
that slightly expanded acceptable compensation
to include education-related materials,
like computers and musical instruments.
College athletes have found a successful legal strategy
in bringing antitrust cases against the NCAA,
arguing that the association engaged
in anti-competitive behavior by arbitrarily limiting
their compensation and market value.
- The NCAA believes that if athletes
are allowed to make money,
the majority of the dollars will flow to those
in revenue sports, such as football and men's basketball.
There is concern that sports that are lower profile,
such as soccer, swimming, or tennis
might be hurt as a result.
However, critics of the NCAA argue
that there are schools on the division two and three level
whose athletic departments sponsor non-revenue
producing football and men's basketball teams,
and still have those lower profile sports.
- [Narrator] And critics say restricting players' ability
to be compensated disproportionately
affects athletes of color.
- You look at the demographics, the coaches,
athletic directors, conference commissioners,
70, 80% of them are white.
If you look at the players that produced
the lion's share of the revenue,
which is football and men's basketball,
those forests are lined with predominantly black players.
And so there's, you know,
there's an underlying kind of racial question
as to how is it okay for money,
for individuals to profit that dramatically on one level,
but not on the player level? (intriguing music)
- [Narrator] In response to the 2019 court decision,
the NCAA has said allowing student athletes
to be paid for athletics performance would undermine
the balance between academics and athletics.
And that changing the rules would erode
the appeal for fans, alumni and students.
Despite the gradual moves of the NCAA,
six states, led by California, have passed laws
to allow some form of athlete compensation.
And the Bipartisan Congressional Coalition also supports
allowing players to earn money from endorsements,
as well as two thirds of the American public.
(intriguing music)
Here's Senator Chris Murphy of Connecticut
at a Senate hearing on college athlete compensation.
- To me, it's just pretty rich to listen to a coach
who's making $5 million a year
tell his athletes that they should be okay
with simply the cost of tuition.
- Public opinion has swayed in favor of allowing
college athletes to be paid in the wake of several scandals
in which the NCAA has barred athletes from competing
for infractions as small as receiving free tattoos.
And these scandals have largely
brought attention to how imbalanced
the economic optics of college sports are.
- [Narrator] In response to mounting legislation
and criticism, the NCAA has proposed
rule changes that will allow athletes
to profit from their name, image, and likeness.
The changes are expected to create
opportunities for financial gain,
large and small, for a wide range of athletes.
Athletes could offer paid lessons,
monetize a YouTube channel,
or be featured in a video game.
NCAA president Mark Emmert said in an interview
with the Wall Street Journal that the member schools
want to support students being able to monetize
their name, image and likeness.
But they also want to make sure that they're not
inadvertently being converted into being employees,
because the relationship with students is really important.
- The NCAA is terrified of college sports
turning into a pay for play model,
where athletes become employees
of their universities or athletic departments.
There is a broad fear that name, image, and likeness reform
would open the door for athletes
to eventually receive salaries.
- [Narrator] But with the Supreme Court
reviewing the 2019 decision,
the lines around acceptable compensation
may be redrawn yet again.
- The NCAA is a little bit like an albatross.
And at this moment, we don't know
who is going to be writing the rules
that govern this space.
It could be the federal government,
it could be state legislatures,
it could be the NCAA, and the Supreme Court
is also putting its finger on the scales.
- But advocates like Huma say they recognize the debate
will continue to be contentious.
- It's been 20 years to get incremental change.
That's been frustrating.
And in the meantime, generations of athletes
and being exposed to all kinds of injustices.
- [Narrator] Sports are defined by the idea
of winning at all costs.
And as the landscape of college sports continues to change,
the question of what those costs are
and who they get paid to will remain.
(intriguing music)