A New Era in College Sports

[0] From the New York Times, I'm Michael Babara.

[1] This is the Daily.

[2] For decades, the NCAA has banned college athletes from earning money for their work, even as everybody else, from colleges to TV networks, has profited from it.

[3] Today, why that is about to change.

[4] Aestead Herndon spoke with our colleague, Alan Binder, about a new era in college.

[5] Sports.

[6] It's Thursday, July 1st.

[7] So, Alan, what's happening in college sports today?

[8] For the first time in the 115 year history of the NCAA, college athletes will be able to make money off their names, images, and likenesses.

[9] That's never happened in the entire history of the NCAA in college sports.

[10] Hmm.

[11] So what does that mean?

[12] What do we mean by name, image, and likeness?

[13] Well, essentially, you're going to have players who are able to capitalize, on their fame.

[14] They'll be able to sell autographs.

[15] They'll be able to monetize their social media.

[16] They'll be able to make endorsements.

[17] You know, for the 115 year history of the NCAA, the bedrock principle has been that student athletes should be amateurs, that students should be students first.

[18] They shouldn't be players first.

[19] They shouldn't be, you know, borderline professionals playing sports.

[20] They should be students who are on campuses to get an education.

[21] And they should at most play for scholarships and some living expenses.

[22] And look, for a long time, that was seen as a really great deal for a lot of student athletes.

[23] They'd come to a campus, they'd play a sport, they'd earn a degree, they'd go off into the world.

[24] And it worked out really well for generation after generation of student athlete.

[25] So what changes?

[26] So the easiest answer to that question starts with really the rise of cable television.

[27] So in the early 19th, 1980s, you had March Madness, the NCAA men's basketball tournament, pulling in about $16 million a year in TV revenues.

[28] But as the 80s progressed, and as cable became more popular, ESPN had just been founded a couple years earlier.

[29] There were battles about how college sports could be televised, a lot of legal fights, a lot of arguments inside the industry.

[30] With today's ruling, any team can now make any deal with any broadcaster.

[31] And that really opened the way for bidding wars as time went on.

[32] The kids grind out the yards.

[33] Television grinds out the money.

[34] And good evening, everyone.

[35] I'm Jim Nance.

[36] Welcome to CBS sports coverage of the NCAA championship.

[37] Great night in Miami, Florida for this most important game.

[38] We have the two finest teams in the land, battling for the time.

[39] So, you know, by the late 80s, the NCAA lands a $1 billion TV deal.

[40] The seven -year, one billion dollar contract to show the NCAA college basketball training.

[41] The $143 million a year was front -page news at the time it happened because it was that seismic for the industry and for American sports.

[42] You know, and as the 90s roar on, you've got more and more eyeballs coming on to college sports, more and more games people are watching and...

[43] Welcome to Bowl Day 93 at NBC Sports.

[44] Because of that, you have more and more TV networks trying to get in on it as well.

[45] Welcome to CFA Primetime here on ESPN.

[46] College football on ABC.

[47] Fox Sports Net.

[48] ESPN 2.

[49] TBS Sports.

[50] ESPN Plus.

[51] Now, if that doesn't wet your appetite, you're watching the wrong channel.

[52] The NCAA is rolling in money at this point, and they start branching off more and more into things that can bring in more money.

[53] Open your playbooks and get ready to kick off.

[54] So you get things like video games.

[55] This game has all the guts and glory in college.

[56] And that just fuels this fire and fuels the fire.

[57] this industry as it, you know, crawls toward being this multi -billion dollar juggernaut.

[58] But it's still not going to the players themselves.

[59] So even as more money is coming in, that broader system of unpaid amateurism is still holding in place.

[60] It barely budged, barely budged.

[61] The billions came in and the system really did not shift really much at all.

[62] So where was the money going if it went from 16 million to a billion?

[63] but not to the players.

[64] Who got the money?

[65] Well, it went to fund sports that aren't as popular, that maybe don't draw big crowds or big TV contracts.

[66] It goes to help fund women's sports, which have really exploded in popularity in recent years especially.

[67] It frankly goes to help pay for the scholarships for these student athletes.

[68] But at the same time, on the other side of the coin, you've got coaches who have started to make more and more money.

[69] You've got coaches making to five, $10 million a year in salaries.

[70] You've got coaches, you know, flying on private jets to go recruit future athletes.

[71] You've got an arms race among campuses to build bigger, better facilities to try to attract people.

[72] And at the end of the day, they could find places to spend a lot of money, but it never really trickled down in any meaningful way to the athletes themselves.

[73] I remember reading a fun fact once that in several states, the highest pay public employee is often the football coach at the large university.

[74] Absolutely.

[75] I mean, there's a running joke.

[76] You know, in some states that the head football coach at the big university is more powerful than the governor.

[77] There might even be some truth to that.

[78] Is that really a joke?

[79] I mean, that seems to be.

[80] Oh, yeah.

[81] I mean, look, there are a lot of people who write in people like Nick Sabin for president or for governor.

[82] I mean, they're cultural symbols as much as coaches.

[83] So if the industry is ballooning, and that's apparent to everyone from spectator to student athlete to colleges.

[84] What do the athletes themselves do about it?

[85] Well, there's only so much they can do within the system itself.

[86] I mean, the system is run largely by, you know, university presidents and chancellors, athletic directors, conference commissioners.

[87] But from time to time, we start to see more and more athletes speaking out.

[88] They might have a press conference.

[89] They might tell a report or something.

[90] You know, word starts to get out that there is some unhappiness in the ranks of college athletes.

[91] And then a guy named Ed O 'Bannon comes along.

[92] I remember him, the 90s basketball legend.

[93] How does he fit into this?

[94] So Ed O 'Bannon was one of the finest basketball players to come out of UCLA in the mid -1990s was an absolute star in the 1995 NCAA men's basketball tournament, went on to play in the NBA for a little while, but eventually O 'Bannon realizes that he's in a video game.

[95] Welcome to Ruff Arena for tonight's matchup.

[96] You know, I was at a friend's house, and his kid was playing a video game.

[97] And my initial thought, when I saw it, I was pretty fired up.

[98] I mean, who wouldn't be excited to see your face on your likeness on a video game?

[99] His likeness is in a video game, essentially, not with his name, but someone who looks like him, someone who played for UCLA, someone who resembles Ed O 'Bannon in every way.

[100] So I saw that and then came to the conclusion that there was a profit and I had no share in it.

[101] And O 'Bannon realizes that he hasn't seen a penny of money for his depiction.

[102] You know, I remember these video games.

[103] I used to play NCAA basketball, and I also used to play the football game, NCAA football.

[104] Yeah, I mean, I played all the time.

[105] My dad and I used to play when I was a kid.

[106] and my dad and I used to marvel over how realistic it seemed.

[107] You know, you'd see, I mean, very much a wink and a nod kind of thing.

[108] You know, there would be a player who would resemble an actual player in every way when they were playing, what their skills were, what they weren't skilled at for that matter.

[109] And they would be the spitting image on a video game.

[110] But the actual player, the living, breathing flesh version of that player, wouldn't make any money off of it.

[111] In Ed O 'Bannon's case, he didn't even know he was in it.

[112] So what did O 'Bannon do when he sees his likeness in this video game?

[113] Well, he went to court.

[114] Former basketball star, Ed O 'Bannon, is suing the NCAA and could change the future of college athletics as we know it.

[115] And becomes the face of a massive antitrust lawsuit against the NCAA and the video game maker EA Sports.

[116] and eventually a judge hands down a ruling that is decidedly unfavorable to the NCAA.

[117] Claudia Wilkin writing Friday that college players should be able to, quote, receive a limited share of the revenue generated from the use of their own names, images, and likenesses.

[118] And it starts to open the door to the idea that players should be able to make money off their names, images, and likenesses.

[119] The NCAA eventually decides that just getting, rid of the games entirely as the path of least resistance.

[120] So they got out of it.

[121] The game vanishes from store shelves all over the country.

[122] So Ed O 'Bannon's the reason why I haven't played that video game in 10 years.

[123] Ed O 'Bannon is definitely one of the reasons why you haven't played that game in a long time.

[124] And, you know, it's interesting.

[125] When there's a philosophical debate in college sports and it's being hammered out in boardrooms or in courtrooms and, you know, the conventions of the NCAA, it doesn't all.

[126] always resonate with people, you take a video game that's wildly popular off store shelves, and that was a wake -up call to people about the debate that had been happening inside the industry.

[127] You know, what you're describing feels true for me in my own life.

[128] When those games were taken away, I remember a couple things.

[129] One, being really sad because I liked playing those games.

[130] But also, it did make that issue of payment for college athletes and what is fair, just more tangible for the average fan.

[131] It was a dawning for people.

[132] I mean, this, look, the removal of the video game hardly sent people into the streets to protest name, image, and likeness rights.

[133] It wasn't like that, but it did make a lot of people, maybe pause for a second, and say, hold on, this is how the system works.

[134] And it sets the NCAA on a course that will totally change the nature and texture of college sports.

[135] We'll be right back.

[136] So, Alan, you said that things really begin to change in college sports after that court ruling that led to the end of the NCAA video games.

[137] What happened?

[138] So around the country, people start to pay more attention.

[139] But in, I guess it was 2015, there was a Rotary Club meeting in Oakland, California.

[140] And there was an economist who was speaking about all the NCAA rules that restricted student athletes.

[141] and a woman named Nancy Skinner was in the audience.

[142] And she told the times later it was like a light bulb going off.

[143] You know, she starts to see college athletics, not just as a sports issue, but as a civil rights issue.

[144] And what way?

[145] She starts to wonder how can an industry bring in billions and offer very little monetarily to the students who are doing the labor for the most part.

[146] And it strikes her as a fundamental breach.

[147] of civil rights in this country.

[148] Senator Skinner, please join us.

[149] You have been very patient.

[150] So she gets elected to the state Senate, and then she starts to write some legislation that changes college sports.

[151] Okay.

[152] Thank you, Madam Chair.

[153] Committee members, very happy to be presenting SB206 to you today as we wrap up or face the last weekend of March madness.

[154] The legislation is called the Fair Pay to Play Act.

[155] What this bill does is it does not require our colleges to hire the athletes or give them a pay.

[156] And it essentially calls for student athletes to make money off their fame.

[157] Rather, it puts our college athletes on the same level as Olympic athletes are allowed, which is that they can pursue sponsorships or endorsements or get an agent.

[158] So Skinner goes out with the idea that if the state of California, this enormous state with enormous sports and enormous colleges says the NCAA's rules don't really apply here anymore, then it could really change California and change college sports more broadly.

[159] So Ed O 'Bannon kicks off a lawsuit that really challenges the NCAA.

[160] Now you have this California politician, Nancy Skinner, writing legislation that challenges the NCAA.

[161] How is that received throughout the state?

[162] Oh, it just sails through the state.

[163] state legislature.

[164] It turns out the Democrats and Republicans both really like dunking on the NCAA.

[165] So it passes the legislature unanimously in 2019.

[166] And then not long after that, the governor of California, Gavin Newsom and I met in New York to talk about the bill itself.

[167] And it turned out he gave two interviews.

[168] He gave one to me and one to LeBron, which normally I just don't get to say that in a sentence.

[169] That was kind of cool.

[170] I'm sure you ask better questions.

[171] I don't know about that.

[172] Thank you for being with us.

[173] I want to start talking of sports about your own background in college sports.

[174] I understand you played a little bit of baseball at Santa Clara.

[175] Yeah, a little bit is the operative word, but it got me into college.

[176] So I'm quite literally sitting here.

[177] No small part due to baseball.

[178] So the governor was a baseball player when he was in college.

[179] But let me assure you, it was a. full -time occupation being a baseball player.

[180] And that helped make him think that the idea of student first was a totally absurd concept.

[181] I mean, did any of these people honestly, do any of these coaches, especially in football and basketball, and say that they abide by the rules of the NC2A on the amount of hours of practice, give me a break.

[182] Everybody knows what they have to do if they're going to compete.

[183] So he has all these views about the NCAA and how the system really works for students, but he also, like Nancy Skinner, sees the issue at hand as a civil rights issue, not just a matter of business.

[184] Look, the money has perverted the entire system.

[185] I mean, we've professionalized college sports, where we've monetized the hell out of it.

[186] Coaches are making a fortune.

[187] Let's go back to the racial lenses here, the dominant, especially in Division I, basketball and football, dominantly white coaches that are making millions of dollars a year and can continue to make more with endorsement.

[188] deals, predominant least majority, Division I men's basketball, majority black, and a plurality in football, black, putting their mind and quite literally their body on the line to make millions and millions, hundreds of millions of dollars for others.

[189] So the governor seems to be saying that the concept of unpaid amateurism, that bedrock that you mention of the NCAA's operations, that it's not this altruistic gifting of an education.

[190] But that more that it's a cover to not provide compensation, particularly to people who come from disadvantaged neighborhoods or trend to be black, they're not getting the money that they deserve.

[191] That's totally what he was saying.

[192] It's what a lot of people have said about the NCAA over the years, that amateurism is this nice cloak.

[193] It's a focus group tested kind of idea that makes people feel all warm and fuzzy about college sports.

[194] but when you strip away the veneer, you see an industry that pulls in billions of dollars and really it's a business at the end of the day.

[195] Unless we force their hand, they're not going to reform.

[196] If we just let them do it voluntarily, they'll come up with some window dressing, a nice thing here, a nice thing there, but they won't fundamentally reform.

[197] So the governor just says he's going to sign this bill, and he says, Consider the consequences of other states following suit with variations.

[198] and then the patchwork that that would create in terms of challenge to the NC2A that would force them to go farther and deeper to address the issue of remuneration and equity.

[199] He expects that other states will start to follow to challenge the NCAA more often and more aggressively.

[200] Is he right?

[201] Did that happen?

[202] It absolutely happened.

[203] We start to see states all over the country crafting their own walls to try to challenge the NCAA.

[204] and these laws look almost exactly like the California measure.

[205] Well, what states are we talking about here?

[206] Because the argument coming from the governor, coming from the state senator, that seems to be a particularly liberal argument, making explicit civil rights justification for the law.

[207] Is that the same justification that other states are using?

[208] Well, it depends on the state, because you had a whole variety of states start looking at these types of proposals.

[209] And look, there were a lot of people who agreed with the civil rights argument that we saw in California.

[210] There were also a lot of people who agreed with kind of this free market capitalism argument that Republicans embraced in California.

[211] And what was that capitalism free market argument against the NCAA?

[212] The biggest argument they make is that the NCAA's rules are unfair restraints on business, that the free market doesn't really work as well as it can if the NCAA has its thumb on every part of a college athlete's experience, that the NCAA, this nonprofit organization is essentially choking the free market.

[213] So you see some states like Illinois past these kind of walls, but you also see them pop up in places like Alabama, Florida, Georgia, Mississippi, Texas.

[214] They really start to take root all over the country.

[215] Alabama, Florida, Georgia, this strikes me as also real hubs of particularly college football.

[216] Absolutely.

[217] So is there any self -interest here for these states?

[218] I mean, I imagine if I was a player and I had to change, to make money in California but couldn't make money in Alabama, then that might sway some of my decisions.

[219] Are we seeing some of these bills move through these states purely because they don't want to lose out on the top talent that has helped those football programs?

[220] I'm not sure you could say that the laws move through only because of that, but I think in the heart of hearts of some legislators, that was totally a factor.

[221] You don't want to see some hot -shot quarterback go to a different school.

[222] if you can help it.

[223] So yeah, there was a worry that the landscape of college sports might look a little less fair if one school in one state had an advantage over another.

[224] So what does the NCAA do in response?

[225] So you see these states passing these laws and they have an effective date of July 1st.

[226] And the NCAA is really backed into a corner.

[227] So just this week, the association decided to essentially waive the white flag and let student asses.

[228] across the country start making money off their names, images, and likenesses, whether they live in a state with one of these laws or not.

[229] Wow.

[230] So that 115 year history, that bedrock of amateurism that the NCAA has founded on, it seems to be completely upended with this virtual surrender to these changing laws.

[231] When you talk to NCAA officials, when you talk to commissioners, when you talk to athletic directors, they all acknowledge that there would not have been this kind of action, this kind of activity without the state governments, really pressuring the NCAA to change the rules.

[232] I don't think there's really any question of whether we'd be at this point without those state laws.

[233] This is an enormous change, I imagine, for the athletes themselves.

[234] Have you talked to any of them about their new ability to make money off of their name, image, and likeness?

[235] Yeah, how are you?

[236] I'm Alan.

[237] Good to meet you.

[238] So a couple weeks ago, So I flew down to Miami to see D. Eric King, a quarterback at the University of Miami.

[239] A quarterback at the University of Miami, a famed football school.

[240] I imagine he's one of the players who stands to gain from this in a big way.

[241] Absolutely.

[242] He is a quarterback who very easily could go into the NFL once this time at Miami ends.

[243] And he's someone who, because he's the quarterback now, draws a lot of attention, has a lot of prominence and could easily stand to gain from these changes.

[244] They're closer to you so it can pick up the audio a little bit.

[245] And we start to talk about whether he ever thought he would make money as a college athlete.

[246] At the time you're in high school, are you thinking it all about is there ever going to be a way for me to make some kind of money while I'm in college?

[247] See, I thought it would happen when my kids were in college.

[248] You know what I mean?

[249] Like long time from it.

[250] I didn't know what happened as quickly.

[251] You know, NCAA, they have so many rules and so many things.

[252] plays for us not to make money.

[253] And it's finally here now.

[254] I'm just grateful for that.

[255] We see all these speculative figures out there right now.

[256] There are some guys who make millions.

[257] Do you buy the idea that some guys will make millions while they're in college?

[258] They make millions away in college.

[259] That's insane.

[260] You know, I don't know.

[261] Like I say, I mean, I definitely, I think some guys would have to make six figures 100 % within these next highway long.

[262] But millions, I don't know about that.

[263] And, you know, he's not entirely sure.

[264] how much he'll end up making, but his goal is, you know, maybe a six -figure haul if he gets lucky.

[265] I mean, six figures is a lot of money, particularly when you were starting from zero.

[266] How are these athletes navigating this new world?

[267] Are they doing this alone?

[268] Do they have advisors?

[269] How are they talking to each other?

[270] What did he say?

[271] Well, they can hire folks to help them work through these deals.

[272] In, you know, his case, he's been relying on his mom and his brother to help him sort through what is to come.

[273] a lot of folks have been taking classes, they've been working, you know, to figure out what their tax implications might be for that.

[274] You've got to pay taxes on this money.

[275] So you've had a lot of athletes relying on family, relying on outside advisors, relying on their schools, relying on each other to try to come up with, you know, the ways to really maximize the opportunities.

[276] So what are y 'all talk about?

[277] I mean, you talk about the best ways to make money, you know, what are y 'all kicking around at this point?

[278] One of my teammates was like, let's build each other's social media.

[279] We all can help all each other's brand.

[280] Another one of my teammates is going to do a podcast.

[281] It's a bunch of ideas floating around.

[282] In a lot of ways, it sounds like what he is planning on being is capitalizing on what we would call in other fields being an influencer.

[283] That's exactly what he's planning to do.

[284] And, you know, that's an argument I've heard from a lot of college athletes over the years.

[285] They've said, look, you know, a guy in my chemistry class or a woman, you know, in my history, class could be a social media influencer and cash in, I was never able to do that because I was a student athlete.

[286] That was the only thing that held them back.

[287] They're seeing this as very much a leveling of the playing field so they can have comparable opportunities to what other students have.

[288] But not everyone's going to get a shoe deal.

[289] For a lot of athletes, you know, especially folks in lower profile sports, it might be something like, you know, an endorsement of a local restaurant it might be you know taping a video for a fan for 50 bucks or whatnot the vast vast majority of student athletes are going to be earning hundreds of dollars a few thousand dollars they're not going to be making six or seven figures so yeah there are going to be people who make a ton of money money that is unfathomable in so many ways but for a lot of athletes this is going to be a much more modest change in their lifestyle it's a brave new world yeah All right.

[290] Appreciate it.

[291] Yep.

[292] You mentioned how the money that's generated from the most profitable sports go to a lot of different things, not only the coaches and the schools, but go to supporting other sports and go to supporting the growth of women's sports, for example.

[293] Does any of that change with this new landscape?

[294] Well, that's one of the great things that we're still trying to figure out, to be honest.

[295] It's one of the most important things we're still trying to figure out.

[296] I remember a couple years ago I had a conversation with an athletic director of a Power 5 school.

[297] And this athletic director used, for sake of argument, a pizza company, and said that that pizza company has a marketing budget.

[298] The marketing budget is not necessarily getting any bigger because the NCAA has different rules for how athletes can profit off their fame.

[299] The worry I hear most consistently from athletic executives and administrators is that the money that companies spent marketing with them will now go to these athletes and that the pie is not actually going to get any bigger.

[300] It's just going to be going to different people.

[301] So there's a worry that, yeah, there will be shortfalls and athletic budgets because companies are spending, you know, money they would have spent with a school with an athlete instead.

[302] It seems as if, while there's still a bunch of unknowns about the future, that what there has been a big agreement on, whether from a state level or from an athlete level, was that the status quo as it existed, that 115 -year tradition of the NCAA and amateurism, that that was just unfair and had to change.

[303] So from the very beginning, the NCAA's business model has been based on the idea of unpaid labor by student athletes, and that has been a wildly successful model for a whole lot of people.

[304] I mean, billions and billions and billions of dollars have come through because of that model.

[305] Now, with name image and likeness, it's a test of that model, and it's going to be the start of maybe a slippery slope, the NCAA thinks.

[306] You know, the more and more the model gets tested, the more and more players have a chance to make money as college athletes, the more strain it puts on the system.

[307] And the big question is whether that system could eventually come crashing down.

[308] No one can really say at this moment, whether it will, whether players will, you know, one day be able to make salaries or if that line between the professionals and the college, players will get blurred even more, but the name, image, and likeness debate and what we're seeing this week is one of the single most transformative steps in that entire debate in the history of the NCAA.

[309] Thank you for your time, Alan.

[310] You bet.

[311] My pleasure.

[312] Alan, does this mean we get our video game back?

[313] Actually, they've already announced it's coming back.

[314] Oh, really?

[315] Did I miss that?

[316] We'll be right back.

[317] Here's what else you need to know day.

[318] On Wednesday, the death toll from the collapse of a condominium tower in Surfside, Florida, rose by four to 16, and officials put the number of those still missing at 147.

[319] In an interview with the Times, the mayor of Surfside, Charles Burkhead, said that the effort to rescue and recover the missing will persist for, quote, the indefinite future.

[320] And on Wednesday, the Pennsylvania Supreme Court, has unexpectedly overturned the three -year -old sexual assault conviction of Bill Cosby and released him from prison.

[321] The court found that a prosecutor involved in investigating Cosby had persuaded him to make incriminating statements in a civil case by promising that the statements would not be used in a criminal case.

[322] Later, a different prosecutor broke that promise and used the comments to prosecute Cosby.

[323] That, the court found, violated Cosby's right against self -incrimination.

[324] Today's episode was produced by Daniel Guimet and Rob Zipko.

[325] It was edited by Rachel Quester and Lisa Chow, engineered by Marion Lazzano.

[326] And contains original music by Dan Powell.

[327] That's it for the Daily.

[328] I'm Michael Mabarro.

[329] See you tomorrow.