Last Friday, U.S. federal judge Claudia Wilken approved a seismic settlement that will send tremors through commercialized sport across the continent, okaying $2.8 billion US in retroactive pay to former NCAA athletes over the use of their names, images, and likenesses, and granting Division 1 college programs the ability to pay players directly.
That second detail matters most for this discussion. Name/Image/Likeness deals, after all, are standard in U.S. college sports now, with teams using them to funnel seven-figure paydays to star players while maintaining that those athletes are still, technically, unpaid students. But legalizing pay-for-play breaks college sports open along its oldest, deepest, most volatile fault line – the precarious distinction between amateurs and professionals in a multibillion-dollar enterprise.
Starting next school year, Division 1 teams will have up to $20.5 million in salary to spread among all their varsity athletes, a setup that, belatedly, brings the rules in line with the reality. Few sober-thinking people could watch the 2018 Rose Bowl and conclude, in good faith, that Georgia’s Kirby Smart, calling the shots from the sidelines, deserved money, but Nick Chubb and Sony Michel, who combined for 326 rushing yards and five touchdowns, merited only in-kind perks and pats on the back.
So in finally acknowledging that the athletes who drive a big-money industry are professionals, Wilken has delivered the shakeup that college sports needed.
But here’s the thing about real and metaphorical earthquakes:
You can feel them far away from the epicentre, and aftershocks from last week’s ruling will rattle elite sport in Canada, too. If Canadian stakeholders aren’t already plotting countermoves, they need to start today.
Keep two points in mind about that $20.5 million annual salary cap.
WATCH | $2.8B US settlement in 2024 opened door for future revenue share between NCAA, athletes:
A nearly $2.8 billion settlement agreed to by the NCAA and U.S. college athletes has opened the door for athlete back pay and future revenue sharing. There are still several details to be ironed out, and the agreement needs to be approved by a federal judge.
First, every NCAA athletic program that can afford it, along with many that can’t, will spend to the limit. That figure isn’t a commandment, but you’ll need to treat it like one if you dream of staying competitive in revenue sports.
Awesome news if you’re a 5-star football or basketball recruit from the U.S., but a big concern for anyone committed to playing or coaching the non-revenue sports that, until now, were a load-bearing pillar in the argument against pay for play. Football and basketball players couldn’t earn salaries, the logic went, because the revenue those sports generated paid for all the other varsity sports programs – golf, volleyball, wrestling, track and field, and on and on…
But now that a fat payroll is the expectation for revenue sports, what happens to everyone else?
I’m not the first person to raise those concerns. And I’m not the smartest to do it.
I’m just the one doing it this week, and wondering how it will affect Canada’s long-term prospects in sports like track and swimming, where NCAA programs are a vital link between high school potential and world class performance.
Vulnerability of non-revenue sports
Olympic sports are an easy target for budget conscious decision-makers looking to funnel money to other projects. Four years ago Clemson University in South Carolina announced the elimination of its men’s track and field program, which has produced seven Olympians, four of them Canadian.
The rationale?
It could reallocate track and field money to fund other Olympic sports.
It could result in a windfall if you’re a hotly-pursued, U.S.-born recruit in a revenue sport. Now you can add a salary to your NIL endorsement income, and if you stick around until you graduate, you can start your adult life with cash in the bank, even if you choose, as those NCAA ads remind us, To Go Pro in Something Other Than Sports.
The biggest complication for those athletes?
The I.R.S. If they don’t already understand the difference between salary and take-home pay, they will when they sign that college football contract and land in the head coach’s tax bracket. It’ll present a giant headache every April, when filing season lines up with some combination of mid-terms, final exams and spring football.
Canadian, international athletes left seeking loopholes
But for international student-athletes, and I’m thinking specifically of the 379 Canadian men and women who played Division 1 football and basketball in 2022 according to NCAA stats, getting paid at all will be a puzzle. The student visas that give foreign born students the right to enroll in a U.S. school also place severe restrictions on employment, and they certainly don’t cover professional sports.
The same obstacles exist for Canadians in the market for NIL contracts, but workarounds exist for the right athlete and sponsor. UConn basketball star Aaliyah Edwards, for example, dodged a U.S. work restriction by signing an endorsement deal with Adidas Canada. But if your employer is a football team, you might not have a loophole to scoot through.
The sensible move is to make varsity athletes university employees, because student visas permit international students to work at the schools they attend. And it’s the right thing to do, because when you join a varsity team in a revenue sport, you’ve signed up for a full-time job promoting your institution.
Except this is big-time, big-money sports, where decision-makers might not do what’s sensible and right when they can do what’s expedient. Maybe it’s the University of Kentucky turning its athletic department into an LLC, aiming to raise more money to pay players. Or it might be schools like Boise State inviting private equity firms to invest in their athletic department — even private equity’s quick cash comes with a long and harrowing list of pitfalls.
So under this setup, maybe Canadian players become the market inefficiency that this new generation of finance-minded sports executives love. An American quarterback who puts up numbers like Oakville, Ont.’s Kurtis Rourke did might command a million-dollar salary at a Big Ten school; the Canadian version might have to settle for a scholarship, freeing his team to spend more money elsewhere.
Teams move into the sport’s professional future, but threaten to strand Canadians students in its amateur past.