US student athletes compensated after rule change

A rule change is allowing college athletes to benefit from one of the world’s most lucrative businesses


College American football team the Clemson Tigers. Photo: @ClemsonFB

It’s been a year since university athletes in the US have been able to make money off their name, image and likeness (NIL) thanks to rule changes which enable them to potentially secure millions of dollars in endorsements.

College athletics in America is one of the most watched and highest grossing businesses in the world.

In the 2021 financial year the National College Athletics Association (NCAA) generated $1.16 billion in revenue.

Players competing in major NCAA sports including basketball and football attract television audiences of more than a million people each week.

But until recently the athletes have never seen the money.

Since the inception of college sports in 1906, competing students fell under rules governing amateur sport which stipulated that as athletes they could not receive any money or gifts exceeding their necessary college expenses.

From June 30, 2021, all states in the U.S. allowed students to begin profiting from their name, image and likeness (NIL) meaning these athletes were able to hire agents and cash in on their personal brands.

Luke Pace is head of commercial at The Hour Group Australia & New Zealand, an events and touring company which specialises in sports marketing and high-profile athletes.

As a result of the new NIL rules Mr Pace and his team are now able to access and promote major college athletes like never before.

“Australians love all sports, in particular the American ones where you can follow your favourite players all the way from high school to college and then ultimately to the big time,” he says.

“But before the new NIL rules came in we weren’t able to market any of those incredibly famous college athletes unless they got drafted.”

He says both international brands and companies can now sign up “…in some cases world famous athletes to promote their products and the players can accept as much money as they can negotiate through their agents.”

While a significant improvement for student athlete empowerment, the playing field is in no way equal.

“The big market schools are ultimately the winners here because they have enormous supporter bases both in the stadiums and on TV which allow them to collect larger revenue annually,” Mr Pace says.

“For athletes that means if they want the big money then they generally have to be recruited by the big schools… and unfortunately athletes will almost always look towards the team that can promise the most commercial value before considering whether it’s the right school.”


Author: Liam Jensen via Canva

The SEC is a football conference made up of schools from the south eastern states of America and it traditionally dominates college sports.

Teams such as Alabama, Ohio State and Michigan don’t occupy major cities and are therefore considered by their college towns as a professional sporting equivalent.

“The athletes recruited by SEC schools are instantly household names – they are treated like gods…They sign memorabilia, attend charity events and have links to alumni organisations that collect as much money as they possibly can and use it to effectively pay their players,“ Mr Pace said.

“It’s out of control.”

Whilst athletes are strictly prohibited from being ‘paid to play’, the infancy of the new NIL rules mean this regulation is limited.

Subsidiary groups lead by wealthy donors, alumni and supporters are legally able to get around the system by paying exorbitant endorsement fees and signing bonuses, to help attract the best talent.

“It’s astonishing what these groups can provide, you’ve got kids skipping senior year of High School so they can start capitalising on their earning potential,” Mr Pace says.

In September 2021, five-star recruit Quinn Ewers decided to forgo his senior year of high school and enter college at Ohio State.

Within months he secured an NIL deal with GT Sports Marketing worth $1.4 million over three years to sign autographs.

“With less than one percent of college athletes getting drafted, its fantastic to see them finally able to cash in…But the college competitions essentially now operate as an unregulated wild west that allows the rich schools to recruit via their alumni groups and make deals that are way beyond market value,” Mr Pace says.

The foundation of college sports was the promise of a free education in exchange for a student’s athletic ability…a fair deal in and of its time.

But as the sport grew into the all-encompassing commercial juggernaught it is today the rigorous amateur rules ended up enabling everyone except the athletes to profit from their skills.

“It’s certainly not a perfect system and I expect it to be altered moving forward but in terms of empowering athletes, it’s great to see them make serious money off their famous names…I think we will see lots of athletes join the six-figure club in the future,” Mr Pace says.