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Experts consider potential pitfalls of student-athlete moneymaking rules

Valley News Staff Writer
Published: 7/24/2021 9:46:02 PM
Modified: 8/4/2021 9:30:57 PM

HANOVER — New rules opening up student-athletes to make money from their name, image and likeness (NIL) may also open up a host of problems for recruiting, budgeting and overall equity in college sports.

And at a small-market Division I school like Dartmouth College, one of the most worrisome could be further widening the wealth gap that already exists in college athletics.

“There are certain conferences and programs that benefit from so much television exposure or from their markets and the interests of their fans that kids that play at those places just inherently are going to have some opportunities that other kids might not,” Dartmouth interim athletic director Peter Roby said. “But you don’t want this to get to a point where boosters and others are making commitments or promises to kids about their ability to cash in that tips the scales.”

With limited guidance to go with the new rules that took effect at the beginning of July, schools and student-athletes are still figuring out exactly what the impact will be. But some outcomes seem more predictable than others.

Will Norton, a professor of sport management at the University of Massachusetts Amherst, pointed out that recruiting advantages are inevitable with the added financial opportunities that come with massive audiences and increase moneymaking opportunities.

Bryce Young, quarterback at SEC powerhouse Alabama, was reportedly already nearing $1 million in endorsement deals as of last week. But even within the Ivy League, Norton said, Columbia could gain an edge because of its location in the New York City market. The same would apply for Penn in Philadelphia and Harvard in proximity to Boston.

Less of a concern for Roby, but an aspect of NIL he wants to ensure Dartmouth student-athletes are aware of, is its potential impact on financial aid. The Ivy League doesn’t give out athletic scholarships, so any student-athletes not paying full tuition are receiving a need-based financial aid package, which is determined by total household income.

Anything a student-athlete would earn from NIL opportunities would factor into that income and could alter the financial aid package they’re receiving. That could potentially result in a net zero for student-athletes if they make more money but have to pay it back to the college.

Roby made a similar point regarding international students, whose visas may not allow them to have a job. He wondered if NIL would count as a job that would put their visa status in peril.

“It’s all those kinds of questions that we just want the students to be thoughtful about,” Roby said. “We’re not telling them that they can’t go and engage. We want them to make sure that they have all the answers to these types of questions before they enter into it, so that they’re making the decisions with as much information as possible.”

Steve McKelvey, another professor of sport management at UMass Amherst, pointed out an entirely different angle that could still be relevant for Dartmouth — the business side of NIL could stir up trouble for schools.

McKelvey and Norton discussed the possibility of ambush marketing, where a competitor of an official school sponsor could give an endorsement deal to a student-athlete to undermine that official sponsor. The NCAA rule change doesn’t restrict that possibility — state laws could, and do in some states, but New Hampshire has not yet adopted an NIL law.

That scenario would cause obvious problems for the NCAA, its member schools and their official sponsors.

“I think the NCAA has really punted a lot of the granular details of how this is going to be governed,” Norton said. “They’ve kind of kicked it down the road a bit. And that’s going to create arbitrage opportunities for people, without question.”

In some cases, these conflicts have already begun playing out. Norton referenced a mixed martial arts gym in Miami that offered endorsement deals, at a fixed-fee model of $500 per month, to all 90 scholarship members of the Miami Hurricanes football team. He said he didn’t know who the official gym sponsor is at Miami, but he imagined they aren’t happy with that development.

While deals like that may benefit the student-athletes in the short term, they could negatively impact the value of the official sponsorship deals with the schools. Norton called that a worst-case scenario for the administrations and athletic sponsorship departments.

“In 10 years, this could look totally different, where schools’ sponsorship departments are just not the same for the smaller tiers of schools,” Norton said. “They’ll be fine at Ohio State, but even at UMass Amherst, frankly, that would really upend the way that the school goes to market with its sponsorship rights.”

The professors acknowledged the possibility that none of these scenarios could occur. It’s conceivable, they said, that the aggressive movement for NIL deals early into the new legislation could settle down if data eventually shows low return on investment.

But should these NIL pitfalls get out of hand, it’s unclear who will get things under control.

“I think we’re more than likely to see a new entity emerge in the next decade than we are to see the NCAA really try to reshape the market that’s already taken off with NIL,” Norton said.

“To me, it feels like the horse has left barn here,” McKelvey added. “I don’t know how you reel some of these things back in. It’s going to be tough to put the genie back in the bottle.”

Seth Tow can be reached at stow@vnews.com.




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