The United States Senate Judiciary Committee began hearings this week into the “future of college sports.” What is at stake during these hearings is not only athlete compensation but the modernization of rules surrounding the compensation of athletes who currently work within the scope of “amateur” compensation. During the two-hour hearing, members of the Senate, representatives from university athletic divisions, and delegates of the National Collegiate Athletic Association (NCAA) discussed the issue of athlete compensation, primarily within the realm of name, image, and likeness (NIL). NIL rules permit athletes to profit off their popularity and personal brand while still conforming to the rules of the NCAA.
These rules were established by the NCAA upon its inception in 1906 to maintain college (and Olympic) athletes’ amateur status (student-athlete) while attending a member university or college. The concept of “amateur” has evolved since the NCAA’s inception, especially concerning payment. In 1948, the NCAA enacted a new set of rules to “alleviate the proliferation of exploitative practices in the recruitment of student-athletes.” (Gaona “The National Collegiate Athletic Association: Fundamental fairness and the enforcement problem.” Arizona Law Review. 23 (1981): pg. 1065–1070) Known as the “Sanity Code,” it placed strict rules on paying athletes, forcing institutions to offer students payments for tuition and fees only. Students needed to demonstrate financial need for room and board. Athletes had to meet the institution’s admission requirements to be eligible for scholarships. With the rise of television in the 1950s, college sports, especially football, were drawn to the monies associated with broadcasting games. In 1951, Penn State signed an agreement with ABC to broadcast their games for $200,000 ($2.4 million in 2023). This amount blossomed to $873 million from broadcasting rights, $1.14 billion overall. With the continued growth of college broadcasting, university merchandising, and the advent of video games, annual income from college sports – predominately football and basketball – has grown into billions of dollars.
Nevertheless, with this growth, the NCAA continued to define athletes as amateurs and offered compensation of $2,000 and the cost of attendance. (Afshar, Arash (2014). “Collegiate Athletes: The Conflict Between NCAA Amateurism And A Student Athlete Right Of Publicity.” Willamette Law Review.) In 2014, Ed O’Bannon took the NCAA to court over the legitimacy of the rights associated with college athletes’ amateur status. This case focused on the rights associated with O’Bannon’s public image and the lack of compensation from an EA college basketball video game. (see O’Bannon v. NCAA) The judge, in this case, ruled in favor of O’Bannon but did not wholly remove the limits placed on student amateurism. Judge Claudia Wilken raised the stipend cap from $ 2,000 to $ 5,000. As a result, several class action suits were filed against the NCAA, not only challenging the restrictions associated with athletic funding but also antitrust and anti-competitive laws. In June 2021, the Supreme Court issued a narrow but potentially transforming ruling on student-athlete compensation. (National Collegiate Athletic Association v. Alston) In a unanimous vote, the court stated that the NCAA rules are not reasonably necessary to distinguish between college and professional sports. Justice Brett Kavanaugh stated, “The NCAA’s business model of using unpaid student-athletes to generate billions of dollars in revenue for the colleges raises serious questions under the antitrust laws. In particular, it is highly questionable whether the NCAA and its member colleges can justify not paying student-athletes a fair share of the revenues on the circular theory that the defining characteristic of college sports is that the colleges do not pay student-athletes.” (141 S. Ct. 2141 at 2168) This decision allows student-athletes to receive education-related benefits that rise above the cost of attendance. Endorsements, autographs, apparel, appearances, businesses, and much more are all things student-athletes can profit from that they could not previously. With the opportunity open, many states began to draft legislation to meet the NIL rules. California was the first state to create legislation that dealt with NIL in 2019. Today, the governors of 32 states have signed or will soon sign NIL bills into law. With the potential of a fractured landscape, the NCAA has urged Congress to pass federal legislation, even though there has yet to be a consensus on what the legislation would look like or what its powers would encompass.
This hearing comes at a time when the entertainment sector (including both music and sports) is grappling with creating either self-regulated rules or relying on legislators to create general rules regarding ancillary areas not covered under current federal law. With the rise of gaming and AI, traditional income streams and the role that artists/athletes have are evolving. As mentioned in last month’s article, “Record Labels Finally Accept AI,” the music industry faces similar issues associated with NIL. The song “Heart on My Sleeve” was written by AI but used the “likenesses” of Drake and the Weeknd. Although YouTube removed the song from its Platform, Alphabet (YouTube’s parent company) began working with the music industry to find ways to license an artist’s likeness, image, and sound. The work that continues today, between organizations and in Congress, could have implications on the use of AI and how the music industry brands and commodifies an artist’s talents. These changes may have implications directly for the music industry, but coupled with federal legislation associated with student-athletes, the role of artists, and, for that matter, athletes, will change to include a broader definition of intellectual property. These events also indicate the rapid change that is currently developing regarding technology and the intersection of human creation. We hope that our legislators will be able to design laws that encourage change rather than stifle development as we enter into this new era.
The Analytical Musician 