By Luke Noé, MS
The debate over whether to pay or further compensate collegiate student-athletes has been a growing discussion in recent years, especially given staggering revenue associated with collegiate sport at the highest level.
In 2014, the O’Bannon v. NCAA case pushed for increased compensation for these student-athletes related to the use of their likeness, among other things (Webb, 2019). One of the outcomes of this litigation process was the cost-of-living stipend that these players are now able to receive outside of the customary tuition and room and board scholarship.
This past November, former Villanova football player Ralph “Trey” Johnson filed a class action lawsuit against the National Collegiate Athletic Association (NCAA) and 22 universities, arguing that student-athletes should be classified as employees and paid, at the very least, minimum wage for the hours in which they participate in their sport (Johnson v. NCAA, 2019). Johnson’s complaint alleges that student-athletes are not paid, even though they are supervised full-time and their total hours are logged, much like the students that work in the ticket office for the football games or those that work in the concession stands. Since work-study programs exist on college campuses, Johnson argues that playing football for the university is no different, and that he and his peers should be rightfully compensated as an employee according to the law.
To understand why Johnson is arguing to be classified as an employee, it is important to first examine a landmark bill that was recently signed in the state of California. S.B. 206, commonly referenced as the “Fair Play to Pay Act,” opens the door for collegiate athletes in California to be compensated for any use of their name, image or likeness (NIL), sign endorsement deals as long as the sponsorships do not contradict with their school’s contracts, and also sign with an agent, beginning in 2023 (Rizzi, 2019; Young, 2019). Following this landmark bill in California, as many as 20 states have drafted similar proposals, including Florida and New York (Young, 2019). The Florida proposal closely mirrors S.B. 206, but New York’s bill takes it a step further by requiring that all NCAA schools in the state budget 15 percent of their annual ticket sale revenue to compensate their student-athletes (S.B. S6722A, 2019).
In response to this push from the state governments to allow student-athletes to earn money for their NIL rights, the governing board of the NCAA conferred and agreed to modify the system so that the players could in fact be compensated, with a deadline of January 2021 to make these reforms. One of the provisions, however, was that student-athletes remain classified as students rather than employees of the university (Osburn, 2019). Shortly after this decision, Johnson and his team filed the lawsuit above, claiming that this move by the NCAA was not satisfactory and that student-athletes nationwide should be paid the minimum wage of the state in which they compete.
In my opinion, there are three possible outcomes from the aforementioned class action lawsuit. First, the court could declare that student-athletes are to be considered employees, thereby forcing the NCAA to establish a method for these players to get paid based on the hours that they work. Second, the court could rule against Johnson, meaning student-athletes remain students first and not employees, but S.B. 206 could still go into effect in 2023 and the players could earn income from endorsement contracts. Finally, if the NCAA wins this case and finds a way to stop these new bills at the state and federal level, players’ compensation levels will remain at the current status quo.
Outcome 1: Student-athletes are employees and Pay to Play bills pass
If Johnson were to win this class action lawsuit and the Fair Pay to Play Act were to go into effect in 2023, it would open the door for student-athletes to earn income from both the university they represent as well as any outside endorsement deals they sign. While this would be an ideal scenario from the perspective of a collegiate athlete, there are several questions that would arise in this scenario. Would student-athletes from every sport earn the same amount? As an administrator, would you pay the same hourly wages to a football or basketball student-athlete whose team generates millions of dollars of revenue yearly as you would an athlete from one of the non-revenue generating sports? From a recruiting standpoint, different states’ minimum wages could also be a factor, as a small increase in hourly pay is considerable when factoring in the number of hours student-athletes dedicate daily to their sport.
Outcome 2: Student-athletes are not employees, but Pay to Play bills pass
If the NCAA wins this case against Johnson and his legal team, but the bill in California and the other states mentioned earlier goes into effect, players will still be able to earn some income from the NIL rights. The main question in this situation is how many of the student-athletes nationwide will earn considerable income through outside sources? A select few will no doubt sign multiyear agreements with major endorsers, but how likely is it that players from non-revenue generating sports will sign these deals? From a recruiting standpoint, institutions that are located in the states that pass these bills will have a significant advantage over those that do not since the recruit will have to forego the option to sign these contracts or hire an agent.
Outcome 3: Student-athletes are not employees and Pay to Play bills do not pass
In this last scenario, the NCAA’s model of amateurism continues as the status quo. In Johnson v. NCAA (2019), the plaintiff argues that there is no act of Congress that has set parameters on how the NCAA dictates what is considered appropriate compensation for student-athletes. While these players do get cost-of-living scholarships today, this too affects recruiting as different cities and universities can offer different packages.
One interesting note from the state proposals discussed earlier is New York’s plan to have institutions put aside 15 percent of their ticket sale revenue for student-athletes. While some of the major Division 1 programs can afford to take this out of their budget, this plan is not feasible for every single university and will be a major topic of discussion if this proposal goes into effect.
The question remains: who should set the limits for these proposals? What is the balance between paying student-athletes their true value while preserving the positive aspects of amateurism and maintaining the differentiation between collegiate athletics and professional leagues? This case shows the ongoing discussions that must continue to find an equitable balance between the two. The decision from the states to pass these bills has only sped up this process by making the NCAA sit at the table to discuss it. It is now up to the NCAA board of governors along with state governors and lawmakers to find the best solution possible.
References
Johnson v. NCAA. (2019). E.D. Pa., No. 2:19-cv-05230.
Osburn, S. (2019). Board of Governors starts process to enhance name, image and likeness opportunities. Retrieved from http://www.ncaa.org/about/resources/media-center/news/board-governors-starts-process-enhance-name-image-and-likeness-opportunities
Rizzi, C. (2019). NCAA, 22 Division 1 universities hit with ex-NFL player’s class action over non-payment of student athletes. Retrieved from https://www.classaction.org/news/ncaa-22-division-i-universities-hit-with-ex-nfl-players-class-action-over-non-payment-of-student-athletes#embedded-document
S.B. 26722A, 2019 Parker, 2019 Leg. Sess. (New York 2019).
Webb, K. (2019). Electronic Arts wants to make college sports games again, but the biggest obstacle is still the NCAA. Retrieved from https://www.businessinsider.com/electronic-arts-ea-college-sports-ncaa-football-basketball-2019-10
Young, J. (2019). Florida and NY push bills to compete with California’s NCAA ‘pay to play’ law. Retrieved from https://www.cnbc.com/2019/10/24/florida-and-ny-push-bills-to-compete-with-californias-ncaa-pay-to-play-law.html
Luke Noé is a doctoral student in the Ph.D. in Sport Management program at Troy University. He has a background in college athletics, specifically NCAA football recruiting, and is currently working in education as an elementary and PE teacher. He lives in Ottawa, Canada.
