NCAA paves the way for athletes to cash in on their fame

DALLAS — The NCAA cleared the way for athletes to profit off their names Thursday, the eve of legislation becoming law in several states that would allow for such compensation.

The expected approval from the NCAA Board of Directors came a few days after a recommendation from the Division I Council to allow athletes in every state to pursue compensation for their name, image and likeness without jeopardizing their college eligibility.

The NCAA’s decision to suspend restrictions on payments to athletes for things such as sponsorship deals, online endorsements and personal appearances applies to all three divisions or some 460,000 athletes.

The NCAA also is allowing athletes to enter into agreements with agents while encouraging them to keep schools informed. The NCAA said schools are responsible “for determining whether those activities are consistent with state law.”

“This is an important day for college athletes since they all are now able to take advantage of name, image and likeness opportunities,” NCAA President Mark Emmert said. “With the variety of state laws adopted across the country, we will continue to work with Congress to develop a solution that will provide clarity on a national level.”

The NCAA wants to have federal laws or its own permanent rules regarding the issue known as NIL, but was forced to seek a temporary solution rather than have athletes in some states eligible for compensation while others were not.

More than 10 states have laws set to go into effect Thursday that would have undercut existing NCAA rules regarding such compensation for athletes.

Without NCAA action, athletes in some states could be making money without putting their college eligibility in jeopardy while their counterparts in other states could be in danger of breaking NCAA rules.

The NCAA’s stopgap measure comes less than two weeks after the U.S. Supreme Court ruled against the association in a case involving education-related benefits. That 9-0 ruling is expected to impact issues related to compensation for athletes.

What does it all mean?

The companies that will connect college athletes with endorsement deals are ready. State laws are set, and where they’re not, the NCAA has given the green light.

It is go-time for college athletes across the country who want to cash in on their celebrity and fame.

Just how much of a market there might be for so-called “name, image and likeness” compensation is unknown, but the next few months will say a lot.

Even before Thursday’s grand opening — when a dozen state laws take effect allowing NIL deals without fear of NCAA rules violations — the jostling had begun:

In Nebraska, fast food chain Runza offered “compliant payment opportunities” to college athletes willing to promote an app to their social media followers. Wisconsin quarterback Graham Mertz unveiled his own personal logo. DePaul announced an “entrepreneurship and brand development program” for athletes eager to cash in on NIL — even without an Illinois law in place at the time.

Opendorse CEO Blake Lawrence, whose company works with dozens of schools on NIL programming and education and provides a service connecting athletes with endorsements (including Runza’s), said the change will be eye-opening.

“What I’m most excited about,” Lawrence said, “is that everyone is underestimating how deep and wide the opportunities are going to be in terms of athletes getting NIL opportunities on Day 1 and Day 101.”

Rick Karcher, associate professor of the sports management program at Eastern Michigan, said it is too early to predict what the market will be like for everyone from star quarterbacks to a Division III golfer.

“Economic theory would tell you that there’s a limited pie of money that’s going to spent,” he said. “There’s only so much money that’s going to be spent on college athletes in terms of endorsements. They’ll be competing for that money.”

Michael Rueda, head of U.S. sports and entertainment for the Withersworldwide law firm, predicted a flurry of initial activity.

“It’s going to be a bit of chaos,” he said.

Gopuff, a consumer goods and food delivery service operating in 650 cities, is offering athletes in any NCAA division a chance to make some money right away. An athlete with the Opendorse app will receive a pitch to promote the Gopuff brand on social media. Gopuff declined to disclose how much a participating athlete will be paid.

”Beyond the biggest stars and household names, there are countless student-athletes across the country who are pillars of their communities and appeal to broad, devoted fan bases,” said Marshall Osborne, Gopuff’s head of business development.

Platforms such as Opendorse and INFLCR make money off transaction fees and through NIL education programs, brand-building and compliance services they provide universities. At least 23 Power Five schools that responded to an Associated Press survey in May had contracts with those service providers. More schools have announced deals since.

Rueda said there is a wide variance when it comes to NIL preparedness for schools and athletes. Some are more than ready to jump right in.

“Over the course of doing this for many years, my client tends to get younger and they are very savvy and proactive,” Rueda said. “The ability to monetize yourself, the ability to build a brand, student-athletes of this generation are ready.”

But the nitty gritty of making a deal can be cumbersome, and he said athletes need professional guidance to navigate the fine print of contracts that could include, among other things, no-compete clauses barring them from promoting similar brands, morals clauses and copyright language.

Rueda said schools, if they aren’t already doing it, need to teach their athletes how to protect their rights and recognize and avoid bad deals.

“Some of the small deals are dictated by legal documents,” he said. “There are clauses in there that can trip you up, and you have to be aware of at least what it means. You may not be able to sort of dissect the nuances, but you have to understand what the impact is because brands are savvy enough to stick that stuff in there.”

Karcher remains uncertain on how much the rank-and-file college athletes stand to gain — beyond the right to make money off NIL. Most experts believe athletes stand to earn hundreds of dollars, not hundreds of thousands.

Karcher said in many cases, the athlete will be the one pursuing opportunities with brands, not the other way around.

“If an athlete can say I’m going to make 500 bucks a year, is it worth all the time and thought and effort trying to get it?” Karcher said

As for the well-known college athletes or those with a large social-media presence and a strong desire to build their brands, they might make some money.

“But I don’t know how you can predict today what they’re going to make,” Karcher said. “They’re competing, the companies are competing against each other to get the athletes what they want locally and at a national level. To me, the big question mark is how much are they willing to pay?

“How much is someone willing to pay for college athletes. We assume, ‘Oh gosh, they’ll generate so much money from whoever.’ To me the jury’s out on that.”