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Are NIL Deals Good for Amateur Sports? The Good, The Bad, and the UGLY of Paying ‘Amateur’ Athletes

In 2013, Dylan Dethier was suspended indefinitely from the NCAA just eight days before taking the tee in the Division III Golf Championships. Effective immediately, the junior golfer was no longer allowed to practice with his team, and the Williams College Ephs (which is a purple cow) were forced to select another person to take his place.

Here’s the real kicker: his book, 18 in America, which chronicled the year he spent between high school and college living out of his car while golfing around the country, hadn’t even come out yet. In essence, Dylan was expelled from competition for hypothetical book sales.

Around the same time that Dylan was having his eligibility unfairly stripped, I vividly remember debating with friends that college athletes should be paid. As coaching salaries soared and NCAA profits reached levels of absurdity, it was almost impossible to watch a college football or basketball game without the topic surfacing. And there was fervor on both ends of the argument, with one side yelling that free tuition was justified compensation for athletes, while the other side highlighted the imbalance of organizations profiting in billions from the performance of amateur athletes.

The Facts

According to the National Collegiate Athletic Association (NCAA), Division I athletics generated $15.8 billion in revenues in 2019. In just over three weeks, March Madness alone generates approximately $1 billion dollars per year for the NCAA. The current average salary of head football coaches in the Division I Football Subdivision (FBS) is over $3.5 million, along with considerable perks and bonus provisions.

Yet, at the overwhelming majority of Division I programs, athletic expenses surpass revenues. In 2019, only 25 of 130 FBS schools whose members are large, mostly public universities (with some exceptions such as Notre Dame, Northwestern, and Stanford) reported positive net revenues.

And where do athletic scholarships rank on the NCAA balance sheet?

Of the NCAA’s $15.8 billion in revenues, only $2.9 billion — 18.2 percent — was returned to athletes in the form of athletics scholarships, while a mere 1 percent was spent on medical treatment and insurance protections. In contrast, 35 percent was spent on administrative and coach compensation and 18 percent on lavish facilities.

The Problem

Athletes have not had the ability to capitalize on the financial explosion that college sports has cashed in on over the past two decades. While a free college education is an incredible benefit, some college athletes can command exponentially more because of their talent and brand identity.

It wasn’t meant to be like this. Amateur sports were supposed to be an extracurricular activity to supplement and enhance the educational experience. No one could have anticipated the passionate and eventual obsessive craze of the American sports fan. But we all should have known there would be people ready to exploit that passion for dollars.

It’s our fault.

Because we can’t consume enough sports, we’ve turned the purest form of amateurism into a multibillion dollar industry. We just couldn’t help ourselves. For better or worse, college athletes have needed to be paid for a long time.

“But they get free college tuition! Isn’t that enough?”

Even more troubling than the amount of money college sports compiles is the myth that every college athlete is getting a free college education. The vast majority of college athletes only have a small portion of their tuition paid for by means of an athletic scholarship, and nearly half of all Division-I athletes are not receiving any athletic financial assistance at all. In fact, there are only 74,000 scholarships available for over 139,000 Division-I college athletes. Because of this, partial scholarships are much more common for the majority of college athletes.

So what can we do?

While I was having those vigorous debates with my friends, I remember humbly admitting that I did not have a good solution for how to compensate college athletes. I just knew that it was wrong and needed to be fixed. My strongest argument was that other students were able to profit or work in college. Why was the earning potential of athletes being unfairly limited when the colleges, themselves, could profit from their performance? Non-athletes in college were free to make money in any number of ways. A musician on scholarship could play a gig on Friday night or sell his or her music on iTunes. If a student started a business, or drew a painting, or wrote a book, nothing would stop them from making money based on their skills. However, if an NCAA football player sells his own championship ring, he loses his eligibility.

“So what’s the answer?” my friends would challenge.

How do you pay college athletes? How do you objectively justify the worth of a star quarterback versus a swimmer or gymnast? The fact was that a very small number of Division I college athletes produced billions of dollars of revenue every year for their schools, and almost all of this revenue came from football and men’s basketball. The disparity between those two revenue-generating sports and every other athletic program in college made the situation almost impossible to fix. Someone would always feel they were underpaid and under-valued.

The Solution

If colleges cannot afford to pay the athletes what they are worth, how can we create a system where a female gymnast could be paid as much (if not more) than a star quarterback? Welcome the era of Name, Image and Likeness, or NLI, where the marketplace determines the value of each individual athlete.

It’s been nearly two years since the NCAA was forced to give up their undefined “principle of amateurism”, suffering a unanimous defeat at the hands of the US Supreme Court. Born from that loss was the NIL era, allowing student-athletes to profit from their Name, Image, and Likeness. This move has brought both positive and negative outcomes to the world of high school and college sports. Let's take a closer look at the good, bad, and ugly of NIL in athletics.

The Good:

The most obvious benefit of NIL is that student-athletes can now profit from their hard work and dedication. Prior to NIL, college athletes could not earn money from endorsements or sponsorships, even if they were household names in their sport. This change allows athletes to monetize their social media presence, merchandise, and any other income-generating opportunities. This has given student-athletes more financial stability and independence, allowing them to support themselves and their families while pursuing their dreams on the field or court.

It’s also fair. You are paid based on your value. It’s not partial to one sport over another. Individual athletes are able to make whatever someone is willing to pay them.

You don’t play a revenue-generating sport? You’re a volleyball player, cross-country runner, or gymnast? So what. You can still make millions if you build a brand that garners enough attention and is demanded by sponsors.

Additionally, NIL has created opportunities for athletes to use their platforms to support causes they are passionate about. Many athletes have already used their newfound fame to raise awareness and funds for various social justice initiatives and charitable organizations.

The Bad:

While NIL has opened up many opportunities for student-athletes, it has also created a new set of challenges. With more money involved, there is a risk of exploitation by third-party agents and boosters. The NCAA has put guidelines in place to protect athletes from predatory practices, but it's important to remain vigilant.

Moreover, NIL may also create an uneven playing field for college sports. Some universities may have more resources to attract top recruits with lucrative endorsement deals, while others may not have the same level of support. This could potentially widen the gap between larger, well-funded programs and smaller schools.

The Ugly:

One of the most significant concerns with NIL is the potential impact on the amateur status of college sports. Critics argue that paying student-athletes will blur the line between amateur and professional sports, fundamentally changing the nature of college athletics. This could potentially impact the integrity of college sports, leading to questions of fairness and competition.

Another potential downside of NIL is the impact on team dynamics. If some athletes are earning significant amounts of money while others are not, this could create tension and resentment within teams. It's essential to maintain a level playing field and ensure that all athletes are treated fairly.

Bottom Line

In conclusion, the introduction of NIL in college sports has brought both benefits and drawbacks. While it's important to address the potential negative outcomes, there's no denying that allowing student-athletes to profit from their Name, Image, and Likeness is a step in the right direction towards empowering and supporting college athletes. And although we may lament that this will change the landscape of amateur sports forever, we also have to remember who is truly to blame for this inevitable outcome.

We are.

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