SAN ANTONIO- New laws in several states, including Alabama, Connecticut and Texas, took effect on July 1, allowing student-athletes to sign sponsorship deals and make money off their name and image.
Collegiate athletes are now able to back up their talent with cash and professional sponsorships. This move from the National Collegiate Athletic Association (NCAA) is quickly reshaping how schools are now competing for these prized athletes.
The NCAA gave its member institutions their discretion to set the rules that allow players to make money from product pitches to autograph signings after a Supreme Court loss damaged the association’s player pay restrictions.
Collegiate athletes are being prohibited from being compensated while in college has been an extremely debated and ongoing issue. With the old policy, the NCAA restricted what athletes would earn outside of their already determined scholarships for years.
According to the National Bureau of Economic Research study, the “Intercollegiate amateur athletics in the US largely bar student-athletes from sharing in any of the profits generated by their participation, which creates substantial economic rents for universities.”
The top Division 1 NCAA schools earn approximately $8.5 billion in annual revenue, 58% of that revenue coming
from their men’s football and basketball programs. Less than 7% of the income produced by these two sports go to the athletes themselves in the form of stipends for living expenses and scholarships.
The NCAA ultimately gave in to the public pressure and took a forward step by announcing the new interim Name Image Likeness (NIL) deal policy, which allows athletes to be compensated for using their names, images, and so forth. However, all deals must come from a third party, as the universities are still not allowed to pay the athletes directly, so that athletes will not be considered university employees.
“This is an important day for college athletes since they all are now able to take advantage of name, image and likeness opportunities,” said NCAA President Mark Emmert. “With the variety of state laws adopted across the country, we the NCAA will continue to work with Congress to develop a solution that will provide clarity on a national level.”
As for the athletes themselves, many, such as Sam Estrada, who plays for Southern Methodist University, feels immense gratitude and excitement about being an endorsed athlete.
“It honestly feels so surreal,” Estrada said. “It honestly doesn’t feel real. It’s crazy cause you to have to think about your actions more than ever.”
Estrada also said that she is excited for the new future and opportunities this rule creates for her and all other NCAA student-athletes and their careers.
“I do think this policy will help athletes progress to the professional level because it can lead to bigger endorsements for bigger companies,” Estrada said. “For example, professional female athletes don’t make as much money as their male counterparts, so they can rely on these endorsements to get paid more and make a lot more money.”
There is still a long legal battle to smooth out all the creases and corners in this complicated issue, but this is a massive step for student-athletes to further their careers and create their own image and brand for themselves.
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