The NCAA likes to say that all its student-athletes are “students first, athletes second.” And there’s a great deal of truth to that. Largely due to academic reforms enacted in 2003, graduation rates for NCAA athletes have risen from 74% in 2002 to an all-time high of 88% in 2018.
But it’s also true that NCAA athletes are the talent that fuels a multibillion-dollar entertainment industry. In fiscal year 2017, the NCAA reported revenue of nearly $1.1 billion, almost 90% of which came from the sale of men’s basketball March Madness TV and marketing rights and championship ticket sales.
And that’s just the NCAA’s slice of an enormous pie. College sports in America is a $14 billion industry, with 38 Division I athletic departments bringing in more than $100 million a year in gross revenue.
Of those 38 schools, Texas has bragging rights to the No. 1 and No. 2 highest-grossing athletic departments, both of which brought in more than $200 million in 2017-18 — the University of Texas ($219,402,579) and Texas A&M ($212,399,426).
Not surprisingly, the Aggies and Longhorns also top Forbes 2019 list of college football’s 25 most valuable programs, earning average annual profits of $94 million and $92 million, respectively, between 2015 and 2018.
With revenues and profits margins that high, it was only a matter of time before the “amateur” athletes that make this industry possible began demanding their slice of the pie. That’s just one of the reasons why we support California’s Fair Pay to Play Act, signed into law this week by Gov. Gavin Newsom, allowing the state’s college athletes to hire agents and strike endorsement deals.
The main issue here is fairness. For far too long the NCAA, its coaches and their athletic departments have benefited monetarily while the athletes on the court or gridiron — often from low-income areas or families of modest means — were prohibited from monetizing their skills and hard work in the form of product endorsements, signing autographs or selling memorabilia. In an age when monetizing social-media feeds like Instagram or Snapchat can potentially earn athletes millions of dollars a year, the need was clearer than ever.
Importantly, the law still forbids colleges from paying athletes outright. Yet by relieving some of the financial pressures on student-athletes that have contributed to so many past and present recruiting-violation scandals, the law could help clean up the murky world of college-level product endorsements and kickbacks while providing much-needed funds to financially struggling athletes and their families.
The NCAA lobbied hard against the legislation and released a statement after it was signed into law saying “changes are needed to continue to support student-athletes, but improvement needs to happen on a national level through the NCAA’s rules-making process.”
With the California law not taking effect until 2023, the NCAA has plenty of time — and motivation — to improve that process. Until then, we agree with Newsom who said the new law will “initiate dozens of other states to introduce similar legislation” and ultimately “change college sports for the better.”