Sports

March Madness, which stretched into April this year, is over. Let’s look at some bottom lines. And by the bottom lines, I mean money. The March Madness basketball tournaments generate substantial revenue.

I have long advocated that basketball and football players at “big-time” schools — primarily the schools in the big five power conferences — be paid since they generate millions of dollars for their schools and the NCAA. In other words, they should receive some of the income they generate.

About that revenue. The NCAA’s revenue in 2023 was $1.3 billion, comprised primarily of television rights ($929 million) with CBS and Turner networks, ticket sales from its championships and postseason tournaments ($222 million), and sponsorships ($16 million). The men’s basketball tournament is a substantial piece of all three.

In January, ESPN and the NCAA reached a new, eight-year, $920 million agreement that begins on September 1, 2024, for the NCAA championships media rights. The deal includes domestic rights to 40 NCAA championships – 21 women’s and 19 men’s events – and international rights to those same NCAA championships, plus the Division I men’s basketball tournament. Significantly, this deal includes the women’s March Madness tournament, and rightfully, after this record-breaking viewership year, the women are beginning to press for a much larger contract.

Several developments over the past few years have caused college athletes to begin to receive pay for their play. One effort started ten years ago. On August 8, 2014, in the court case O’Bannon v. NCAA, former UCLA basketball player Ed O’Bannon challenged the NCAA’s use of former athletes’ “names, images, and likenesses” (NIL) for commercial purposes. The federal courts supported the NCAA’s position that athletes should not be paid but held that the NCAA is subject to federal antitrust laws. That opened possibilities for reform of the operation of the NCAA. Recently, several lawsuits have chipped away at the NCAA’s amateurism stance.

Early 2019: California Senate Bill 206 — the Fair Pay to Play Act — was proposed. States began to act to protect their universities in the competition for players.

June 21, 2021: The U.S. Supreme Court ruled against the NCAA in the NCAA v. Alston case, holding that the NCAA could not limit education-related payments to student-athletes. The NCAA then deferred to state laws on NIL — and, in states that hadn’t passed laws, they deferred to the schools themselves. Per the NCAA, two things remained off-limits: no pay-for-play or quid pro quo. Athletes were not supposed to receive compensation tied to performance, and recruits were forbidden to sign deals contingent on attending a particular school.

July 1, 2021: Various NIL state laws went into effect, and a flood of athletes in various college sports began receiving NIL contracts from businesses similar to those professional athletes have with various companies.

February 2022: Collectives begin to talk openly about visiting with recruits. Collectives are companies typically founded by alums of a school. Financial resources are collected from companies and directed to athletes under NIL agreements. Collectives operate independently of the university and athletic departments.

March 2022: A five-star recruit in the Class of 2023 signed an NIL deal worth as much as $8 million.

April 28, 2022: University of Miami football player Isaiah Wong’s agent publicly announced that Wong would transfer unless his NIL compensation increases.

May 2022: College sports leaders met in Phoenix and announced an impending crackdown on booster-related NIL payments.

March 2024. The NCAA issued new guidelines to control boosters’ involvement in NIL-related payments to recruits. Collectives are considered boosters. This action may be too little and too late, as several reports have been made of collectives recruiting students to college teams, which the NCAA has prohibited boosters from doing.

The student-athlete model that the NCAA promotes may be collapsing under the weight of labor issues as well as NILs, and collectives. In 2021, the National Labor Relations Board (NLRB) ruled that using the “student-athlete” designation to deny players employment and labor rights is illegal.

This year, the NLRB determined that the men on the Dartmouth Collège basketball team were employees and certified their union. Meanwhile, an administrative law judge in Los Angeles considers whether USC football and men’s and women’s basketball players are employees of their school, conference, and the NCAA.

Several lawsuits have been filed against the NCAA amateurism claims in the last six months. Johnson v. NCAA challenged the prohibition against accepting prize money. House v. NCAA and Carter v. NCAA claim that players should be compensated for being on game broadcasts and should receive market-value scholarships.

Yes, changes are coming, and college sports may be changed even further.