Top Public Policy Issues Facing Governing Boards in 2023–2024:
Navigating changes in college sports.
An athletic director once famously likened collegiate athletics “to the front porch of the university. It’s not the most important room in the house, but it is the most visible.” This is especially true for Division I universities that compete in men’s football and basketball, where teams appear regularly on national television, pack 100,000-seat stadiums and 15,000-seat arenas, and pay head coaches multimillion-dollar salaries. But it is true, too, for institutions that compete at lower levels and where sporting contests forge one of the strongest bonds with alumni, attract new students, and help shape institutions’ reputations.
As the Top Public Policy Issues 2021–2022 report noted, college athletics often intersect with both legislative activity and legal decisions, including Title IX policies and over the issue of compensation for student athletes. The latter of late has been much in the news—and on front pages as well as in sports sections.
Updated May 4, 2023.
Name, Image, and Likeness
The debate over whether college athletes—or at least some—should be compensated is over. It is already happening. The once imperious National Collegiate Athletic Association (NCAA), under pressure from a spate of state laws, changed its rules in 2021 to allow athletes to reap the financial benefits from marketing their own name, image and likeness (NIL). Once limited to meager allowances on top of full scholarships, student athletes now can hire agents and make a cut from sales of jerseys and posters, as well as appear in television ads for casinos, car dealerships, sports drinks, and more. Congress has not yet jumped in to impose federal regulation on this NIL marketing free-for-all, but more than 30 states have enacted variants of California’s 2019 Fair Pay to Play Act, which just took effect.i
Charlie Baker, a former Massachusetts governor, Republican career politician, and businessman, is succeeding Mark Emmert, a former University of Washington president and Louisiana State University chancellor, as president of the NCAA—a change that is likely to increase the possibility of passage of bipartisan federal legislation to supersede the state statutes and, as the departing Emmert put it, “provide clarity on a national level.” The NCAA also relaxed a rule that required athletes to sit out a year after transferring higher education institutions, so now the recruiting wars are endless.
NIL compensation can be serious money. LeBron James’s basketball-playing son attracted $7.5 million in sponsorships while still in high school. Louisiana State gymnast Olivia Dunne pulls down $3 million from streaming photos to 10 million followers on Instagram and TikTok, and another social media “influencer,” University of Texas track star Sam Hurley, pockets over $1 million.ii Meanwhile, football powerhouses are lining up groups of donors, called collectives, to promise lucrative deals to recruits. A high school quarterback from California was reportedly in line for $10 million-plus pledged by University of Miami boosters before that deal fall apart.
And while the biggest money to be made by athletes is at the powerhouse universities and in top divisions, athletes at every college, small or large, now control their name, image, and likeness. Some may be a credit to their institutions—and some a discredit. And, of course, only a fraction of the half-million college athletes will actually benefit from NIL sponsorships—just as only a tiny few will make it into the pros.
iThe states include Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas and Virginia, according to the law firm Saul Ewing’s legislation tracker. https://www.saul.com/nil-legislation-tracker.
ii “NIL Valuations and Rankings,” On3, https://www.on3.com/nil/rankings/.
Classifying Athletes as Employees
Meanwhile, the National Labor Relations Board (NLRB) office in Los Angeles in December 2022 found merit to a complaint by a players’ association who want college athletes to be classified as employees with the right to unionize and bargain. NLRB General Counsel Jennifer Abruzzo reiterated her 2021 guidance that athletes do have the right to organize and were employees, not “mere student athletes.”i The National College Players Association brought the complaint against the University of Southern California (USC), the PAC-10, and the NCAA. The NCAA has long insisted athletes are amateurs and should be treated as such.
The University of California, Los Angeles, and USC decided their football teams weren’t making enough competing in the venerable PAC-12. Both decided to bolt to the storied Big Ten to play the powerhouse universities in the Midwest and on the East Coast. While the move leaves the PAC-12 without two of its biggest draws, the Big Ten expects each of its institutions to garner $60 million to $70 million a year from its new television contract,ii double what they would make playing late night games with lower ratings on the West Coast.
The switch means repeated transcontinental flights throughout the fall semester, thereby imposing a greater burden on the student-athletes. UCLA Chancellor Gene D. Black and Athletics Director Martin Jarmond said that they now can afford “more efficient transportation options” with the added revenues from Big Ten membership. To secure the University of California Board of Regents’ approval, UCLA agreed to pay several million dollars to rival University of California at Berkeley for its revenue losses and to spend additional millions on expanded academic support, mental health, and other services for all its athletes (As a private university, USC could make the jump to the Big Ten of its own accord.) The move could further expose the vulnerabilities of big-time collegiate sports to political or judicial scrutiny.
i “NLRB General Counsel Jennifer Abruzzo Issues Memo on Employee Status of Players at Academic Institutions,” NLRB, September 29, 2021, https://www.nlrb.gov/news-outreach/news-story/nlrb-general-counsel-jennifer-abruzzo-issues-memo-on-employee-status-of.
ii “U.C.L.A. is allowed by California Regents to join Big Ten,” New York Times, December 14, 2022, https://www.nytimes.com/2022/12/14/sports/ncaafootball/ucla-big-ten.html.
Medical and Gender Protections for Athletes
An NCAA “transformation” panel recommended a raft of changes for Division I schools, including a requirement to provide at least two years of medical coverage after college for injured players and funds to complete their degree if they leave college without a diploma.iAnd as discussed in a previous section, new Title IX regulations also are being finalized that would add gender protection for LGBTQ students and the Biden Administration has proposed a rule specifically addressing transgender students’ eligibility to play on male or female teams. Eighteen states bar transgender students from playing on teams other than the sex listed on their birth certificates.
i “Final Report,” NCAA Division I Transformation Committee, January 3, 2023, https://ncaaorg.s3.amazonaws.com/committees/d1/transform/Jan2023D1TC_FinalReport.pdf.
The explosion of legal sports gambling across America presents complications for colleges and university, in part due to a dizzying array of state rules. Two-thirds of states legalized sports betting after a 2018 Supreme Court ruling allowed it in New Jersey.i And today, some states permit betting on college teams but not on in-state teams, with exceptions for March Madness. Some allow wagers not only on outcomes, but on point spreads, half-time scores, and other so-called “props.”
An unholy alliance is forming between state legislatures that allow betting on college sports, online betting companies and casinos that sponsor on-line betting, and university athletic administrators that benefit from the large sums to promote gambling on their campuses (even on their own teams and by their own student body) saying that it provides needed revenues for their athletic programs.
But history offers a cautionary scandal. Players on the City College of New York basketball team, then reigning national champions, and six other colleges and universities were caught up in a notorious point-shaving scandal in 1951, the largest since the infamous “Black Sox” baseball players conspired to throw the World Series in 1919.
A related issue emerging as cause for concern is gambling addiction. How many students will be affected? A photo accompanying a recent New York Times article on collegiate gambling showed a massive digital message scrolling below a prominent Big 10 institution’s football stadium scoreboard just above the student section that said, “Download the Caesars Sportsbook & Casino App” and “Official Sports Betting Partner of Spartan Athletics.”ii
In response, federal and state lawmakers and regulators are taking action. Sen. Richard Blumenthal (D-Conn.) has threatened legislation to regulate advertising on sports betting on or near college campuses. The introduction of bills in Massachusetts, New Jersey, and Maryland—as well as regulatory actions in Ohio and New York that prohibit certain advertising. ban betting on in-state teams or require full transparency on any contracts or partnerships between gambling companies and universities—suggest other states, awakening to new-found concerns, will follow suit.iii
Elected leaders are proud graduates of their alma maters, and many are strong supporters of those with Division I athletic programs. Nevertheless, the large dollars involved—
in NIL compensation, in the courting of sports betting to attain more revenue, and in skyrocketing coaches’ salaries increasingly comparable to those offered in professional sports—force the question whether big-time athletics can continue to sustain the amateur athletics model before policy makers or the courts determine that model is no longer viable or defensible.
i “Americans Bet $125 Billion on Sports in 4 Years Since Legalization,” Associated Press, May 18, 2022, https://www.usnews.com/news/sports/articles/2022-05-13/americans-bet-125b-on-sports-in-4-years-since-legalization.
ii “A Risky Wager: How Colleges and Sports-betting Companies ‘Caesarized’ Campus Life,” New York Times, November 20, 2022, https://www.nytimes.com/2022/11/20/business/caesars-sports-betting-universities-colleges.html.
iii “Maryland, New York Latest to Examine College Sports Betting Partnerships,” Legal Sports Report, March 1, 2023, https://www.legalsportsreport.com/105019/maryland-new-york-examine-college-sports-betting-partnerships/; “Colleges and Universities are Betting on Sports Gambling,” 1A WAMU 88.5 FM March 13, 2023, https://wamu.org/story/23/03/13/colleges-and-universities-are-betting-big-on-sports-gambling/.
Associated AGB Resources
- College Athletics: What’s New, What’s Next? (March 2023)
- Name-Image-Likeness: Are You and Your Foundation Ready? (January 2023)
- AGB Policy Alert: Supreme Court Rules against NCAA in Student-Athlete Compensation Case, and the NCAA Votes to Allow Athletes to Benefit from Their Names, Images, and Likenesses (July 2021)
- AGB Board of Directors’ Statement on Governing Boards’ Responsibilities for Intercollegiate Athletics (September 2018)
Questions for Boards
- Has the board considered the implications related to compensating our student-athletes for their name, image, or likeness?
- Is our university considering a financial relationship with an online gambling company? If so, has the board been engaged in discussions regarding, or been made fully aware of, any pending contract?
The AGB Perspective
Board members are fiduciaries first, and fans second. In keeping with fiduciary duty and recognizing that boards should delegate administrative responsibility for intercollegiate athletics to the institution’s chief executive officer, institutional governing boards are ultimately accountable for athletic policy at colleges and universities. Boards of institutions that choose to offer these enhanced educational benefits to athletes must accept responsibility for upholding the integrity of the athletics program and ensure that the program continues to advance the institution’s educational mission.