“The law of unintended consequences, often cited but rarely defined, is that actions of people, and especially of governments, always have effects that are unanticipated or “unintended.” Economists and other social scientists have heeded its power for centuries; for just as long, politicians and popular opinion have largely ignored it.” – Rob Norton, University of Pennsylvania Law of unintended consequences (upenn.edu)
Looking at the Issue First
It’s a nice neat concise opening definition. And it might just be the neatest and least complex thing that we will be talking about for this article. We already discussed the automatic waiver and rule changes to the Transfer Portal (The NCAA Transfer Portal and New Rules Mean Collegiate Money Ball Changes Everything - Gobbler Country) that have created the infant monster properly called collegiate free agency. We covered some of the major issues, and some are not particularly bad, by the way. In that article there was an aside that mentioned something that could very well end collegiate sports as amateur endeavors, forever; Name, Image, and Likeness Rights.
Here is a white paper from the official pages of the NCAA.ORG that gives a good overview of the official view of the issue. Name, Image, Likeness | NCAA.org - The Official Site of the NCAA or Right of Publicity. The operative current NIL standard is as stated;
“In general, to maintain NCAA eligibility, Division I student-athletes may not promote or endorse a commercial product or service, even if they are not paid to participate in the activity. Athletes may use their image to continue participating in non-athletically related promotional activities if they were initiated before college enrollment.”
In plain English this means that the current rules are strict, and the person can promote their own products and businesses as themselves, not as athletes and/or representatives of the sport or sport related ephemera; WITH permission.
Notice that the end of the white paper denotes the 2020 year as a period of investigation, negotiation, and proposal creation for review, debate, and approval/disapproval at this month’s NCAA Convention. Up until that time the flow of the debate has been behind closed doors with few leaks concerning the contents. That condition gives us a real opportunity to talk about the broader spectrum of the issue and potential pitfalls. There will be a full follow-up once the new rules are established, if at all.
The Expectation and the Possible Results
USATODAY managed to say not much of anything more significant than things might not match up between California laws that started this whole adventure back in early 2020, and the chart of events outlined in the NCAA whitepaper listed, above. It does, however, at December 7, 2020 seem to be the most current summary of the very sticky situation.
It does mention and link to a Florida law that will go into effect in July 2021 by Florida. and it mentions in passing a Nebraska law that will supposedly go into effect in mid 2023. Colorado and New Jersey have also managed to pass laws; but the regulations are all slightly different.
In all of these cases the implementation will be non-uniform and the regulations will slightly compete. What we can see from the NCAA rule summary is that the entire NIL issue is going to be serious legal pogey bait (chewing gum), for quite a while. It’s also pretty obvious that Congress will get involved at some point.
As is mentioned in the article, the implications for the lower divisions in the NCAA are still in a strange position. There is, also, nothing at all being said about high school and prep school athletics.
The Beef and the “Sandwich”
The result of this confusing layer of laws and regulations will end up being a serious loss of focus and lots of strange decisions, mistakes, and of course the inevitable law suits to follow. The reality is that a patchwork quilt of laws across all 50 states and even the territories will end up resulting in an equally confusing mess as the implementations begin, as early as this year, and as late as a few years from now.
The beef – meaning the fight, the problem, the issue… (Perhaps it shouldn’t be ‘beef’ maybe it should be plural, ‘beefs’?) will be the old Latin question Cui bono? (Who benefits?) The laws are supposed to help out the student athlete (regardless of sport, this will hit all collegiate sports, not just football) but might just make it nearly impossible for anything to be done in any direction.
The “sandwich” is made up of the proverbial “processed leftovers”. While it is all well and good to allow people the rights to their Names, Images, and Likenesses (NIL); under which set of circumstances are they in full control or shared control of that NIL? Remember their pre-collegiate images, likenesses, and names are potentially at question, here.
How is this going to figure into the recruiting equation? That’s a mess of its own density and smell. We are going to add lots of gas to that pile with this movement of “good intentions”.
What Happens If…?
The major question that will probably be adjudicated, repeatedly, until someone federal (Congress) gets involved is going to be the issue of who and how much image belongs to whom or what? The best way to look at the issue is to examine potential scenarios using theoretical examples. This can also risk erecting strawmen; so care must be taken to perform a hard plausibility check before looking at the particular situation. Remember both of these scenarios presuppose that the proposed rules regarding endorsements are passed. From the reading of the rules in place, currently the student athlete may not endorse a third party product or service that is in any way sports related and risks being classified as a professional. They probably won’t receive a waiver.
Scenario 1: Competing Endorsements
Joey “The Toe” is a high school football kicker and soccer player. He’s got the record for the greatest number of consecutive field goals over 40 yards in the state. He also holds the record for the most touchbacks in high school. Joey is also a travel soccer player who makes the big trips around the region when his local soccer club hits the spring to summer circuit. Well, the Big Euro Sneaker Company sees a big endorsement opportunity. Big Euro gets in contact with Joey’s parents (he’s only turning 17 as he’s a rising Junior). His parents are intrigued so they hire an agent, and sign a contract with Big Euro Sneaker for Joey to wear Big Euro socks and soccer boots. Along with do a couple of commercials for them for which he’ll get royalties, and of course any money from autograph signing and selfie sessions. It’s nice money that pays the tuition for Joey’s prep school education. Joey’s football and soccer acumen attracts several collegiate levels of interest. He gets Division 1 offers from several Power5 programs for football, and even more for soccer. The problem is that “The Toe” is a trademark now. He’s got royalties flowing in from Big Euro Sneaker, and his contract with them is exclusive. All of his Division 1 football offers are from schools with competing sporting equipment contracts, the best one being – Mega Sneaker and Jersey.
- If he chooses to play football, he can’t fulfil the terms of his contract and wear the Euro Sneakers and boots. He also can’t sport Euro Sneaker socks or other gear. He can’t be seen in Mega Sneaker equipment without violating the terms of his Big Euro Sneaker contract.
- If he chooses to play soccer, all of the biggest schools attracting the attention also use Mega Sneaker products. There is one school that does use Euro Sneaker equipment but it’s in a smaller market and doesn’t even have a football team. He is also risking foregoing a much more lucrative deal in the NFL as a place kicker should he decide to turn pro.
The proposed NCAA rules say that he can endorse those products if he does not represent the school or the sports programs, but without the sports programs his name is less marketable over time. So, in effect Joey is being steered to the less lucrative sport, or forced to violate his contract and risk some form of contractual violation that could result in monetary damages paid out to Euro Sneaker.
Meanwhile there is the issue of the agent – which is theoretically a no-no under current amateur rules of the NCAA, and the contract was signed when he was a minor on his behalf by his parents. Since he is just turning 18, that contract is up for a renegotiation. It’s time for him to accept and sign as an adult.
Now you see where the ‘unintended consequences’ begin to filter in, and then deluge the situation. Joey did what made him money from his NIL product, but opening that door began the process of systematically freezing him out of options that he thought that he had. What’s worse is that there could be tort/civil liabilities involved in breaking a contract.
Scenario 2 – Endorsement or Not
Joey’s problem is a bit different from Darnell’s. Darnell is a wide receiver with a talent for getting to the ball. He’s also a poor kid from the projects in an area of the state where life can be really tough and bad habits can be difficult to refuse. Darnell has been a star, and spent a good deal of his high school career avoiding those entanglements. He’s lived a tough life, in and out of foster care, and then finally adopted by a set of parents who set him on the road for success. He attended a good high school, worked his way through several summers of football camps and the usual array of part time jobs that many high schoolers take. His parents even were able to spring for a big-name football camp in the summer between his junior and senior seasons. That’s when he attracted the attention of a coach who he connected with, and worked well with. This coach just so happened to make him an offer as camp closed, and Darnell was excited. BUT there was a problem. This college program that made the offer was a Division II FCS Program with an excellent record, and a superior academic reputation. It just didn’t have any big-name endorsements hanging around. Darnell was a year behind and his adoptive parents had arranged for an extra year at a private prep-school, that his favored coach recommended. Besides, Darnell really wanted to pay his parents back. A NIL deal would go a long way to helping them recoup the money that they spent on Darnell’s prep-school tuition and camp fees. He does have an offer from an FBS Power 5 team, and two Group of 5 teams, all of which he thought were fine. Though, he really liked the coach from the FCS Program. Of course, the NIL offer that cooperated with the P5 program’s equipment endorsement contracts was very lucrative. What’s he supposed to do?
- There would be pressure to take the P5 offer and sign the big NIL contract. It’s all about the Benjamins after all, and if he’s that good he’ll only be in school for a few years, anyway. It’s three and out to the Pro draft… maybe even two if he plays as a true freshman.
- There will also be the strain on the parents. Depending on their situation that NIL money could be very important. There could also be the friction induced on a personal level by a player eschewing a college diploma for a risky shot a professional football. Tying the added pressure of making some level of bank on narrowly defined lines of remuneration are legal and accounting headaches that most people are going to need help with. That fact set means finding an honest agent/legal help to manage contracts beyond the normal college letter of intent.
This situation is a powerful hypothetical example of the potential for an indirect form of steering. Darnell is legitimately offered several opportunities but the one that he really wants is the one without the best level of potential NIL remunerations. His good intentions might steer him into taking a decision that isn’t the best for his personal and collegiate prospects. His choices are going to depend on what is more important to him. Either way he isn’t particularly well served by the increased complication of the situation.
Wrapping it Up Even Though There is More
To be sure, both of the scenarios are fictitious but they are also something, minus the NIL complication, that I have seen high school football players and their families struggle with. That’s the point of this, there are many Joeys and Darnells out there. Young men and women with the potential for some level of collegiate stardom where their personal endorsements or marketing will create pressures and imbalances in the relationships between themselves, their families, their teammates, and their coaches.
There is a potential third scenario to consider, imbalance in the compensation level for endorsements between players on a team? One can only guess as to how many players will get paid for their NIL marketing. There won’t be huge number on most non-top 20 schools, and certainly not as many as the top 10 programs. This situation can only shove the talent balance over the edge. “Alabama player NIL” is going to be worth more than “Wyoming player NIL”. It certainly will be better than, say, “Georgia Tech player NIL”. Clemson’s Tiger Paw will garner more name recognition than Wake Forest’s Demon Deacon. And of course, the organizations/programs are all going to want some sort of share of any “post Letter of Intent NIL”. Even if not directly representing the team or school, the player is still potentially an image product of that system. There will be pressure to balance that contractually. If Darnell became a Heisman Trophy Candidate his NIL would go through the roof, but all of that would be attached to his program. Whose hand will be in whose pockets?
If you are a college athlete and get your name and face on the Wheaties box, do you get all the money, or have to share?
Permanent Change to a Quicksand Field
We come back to unintended consequences, again. What we are seeing unfolding is a hodge-podge of laws, rules, and regulations. We don’t know how complete or thorough they’ll be, nor do we really understand the potential impacts on players and programs along the decision and remuneration chain. The concept of “Collegiate Money Ball” with the newest iteration of the Transfer Portal is going to change the business of the ‘game’. The addition of the Name, Image, and Likeness factors will push the “Ludicrous Speed” button.
We will be updating and talking about this more as the new regulations are introduced and voted on by the NCAA Congress later in the month. It’s a really important issue and there will be many dissatisfied people out there.