Framing The NCAA Name, Likeness, And Image Issue

BY ADAM GROSSMAN

The NCAA began the process to change its rule to enable collegiate athletes to profit from their names, images and likenesses "in a manner consistent with the collegiate model." My co-authors and I addressed this issue in The Sports Strategist: Developing Leaders For A High-Performance Industry (copyright 2015). The portion from the book on the topic is included in the post below.

Many ethical challenges in the sports industry touch on both competitive and business issues. Perhaps no example brings this to life better than the question of whether college athletes should receive compensation in addition to their scholarships. If schools continue to professionalize their amateur athletic programs, then who should be getting paid?

The O’Bannon v. NCAA lawsuit highlights the complexity of this question. Former University of California, Los Angeles (UCLA), basketball player Ed O’Bannon is leading a class-action lawsuit against the NCAA, contending that players no longer competing for their college or university should be paid when their likeness or image is used. The complaint by O’Bannon and other former athletes originally focused on their inability to receive royalties when EA Sports and Collegiate Licensing Company used their likenesses in its college basketball video game. In 2013, EA Sports settled lawsuits brought by these collegiate athletes for $40 million.

The larger issue of these lawsuits is the question of whether NCAA athletes should be paid for their performance for their schools’ teams. One of the primary reasons that the lawsuits against the NCAA are moving forward is due to the organization’s stance that student athletes are sufficiently compensated by receiving tuition and fees, room, board, and required course–related books. When agreeing to compete in college athletics, the NCAA requires students to waive their rights to all future revenue derived from their likeness and image. Financially, this benefits the NCAA, as it is not required to compensate current and former athletes beyond the terms of the athletes’ national letters of intent. Ethically, this has caused critics to question how someone could be a student athlete in perpetuity when he or she is not a student or athlete for most of his or her life. In addition, the judge in this case has allowed current student athletes to join the O’Bannon suit to contest whether they should also receive money for the use of their likenesses and images.

Concurrently, the NCAA has dealt with other ethical challenges to the organization’s position on paying college athletes. The NCAA received criticism for selling apparel with Reggie Bush’s likeness after the organization sanctioned the University of Southern California (USC) because Bush received money while in college. In addition, Johnny Manziel was reported to have signed thousands of autographs that dealers sold for profits. The NCAA suspended Manziel for the first half of the first game of the 2013 college football season for his alleged role in these activities, leaving many to question the consistency of its approach to this issue.

The issue of whether student athletes should be paid illustrates some of the problems at the intersection of competitive and business ethics. From a competitive perspective, critics argue that paying players would compromise the integrity of the game. Big schools with big donors would capitalize on this opportunity to recruit the best athletes. As a result, the schools with the most money to pay players would likely achieve the most competitive success.

Southern Utah University professor David Berri counters that argument by demonstrating that athletes’ ability to receive money could actually increase the competitive balance in college sports. Berri claims there is currently a significant amount of competitive imbalance in college sports. From 1950 to 2005, 10 schools were ranked in the top eight of the final Associated Press college football rankings. During the same time period, 45% of Final Four teams came from only 10 schools. Berri has found similar results in sports ranging from men’s volleyball to women’s softball. The essence of Berri’s argument is that schools that have achieved success in the past have been more likely to achieve success in the future, because players want to go to schools with the best track records of success. Without schools being able to offer some form of additional compensation to players, talent and victories will likely continue to be concentrated in a few programs.

From a business ethics perspective, paying athletes would likely be both cumbersome and filled with legal complications. Many collegiate programs could not afford these new costs, as their athletic departments already are losing money. As Big Ten commissioner Jim Delany at one point asserted, “The Big Ten’s schools would forgo the revenues in those circumstances and instead take steps to downsize the scope, breadth and activity of their athletic program.” Moreover, it is unclear exactly who would get paid, how much they would get paid, and what the Title IX ramifications of such payment would be, particularly in terms of gender equity.

There is a potential way for athletes to be compensated without amateurism being removed from college sports. The International Olympic Committee (IOC) originally prevented its athletes from receiving any money from “endorsements, memorabilia deals and other business opportunities.” President Jimmy Carter signed the Olympic and Amateur Sports Act in 1978, which created the United States Olympic Committee as the head governing body for amateur sports in the United States. One of the outcomes of this act was that it became easier for Olympic athletes to receive money for the use of their likeness and image through sponsorship deals. For example, swimmer Ryan Lochte has made millions of dollars through endorsement deals with companies such as Gillette and Gatorade but does not receive nearly as much from swimming in events.

The NCAA could adopt what is known as the Olympic model to allow college athletes to make money without schools having to pay any additional compensation. According to University of New Haven business professor Allen Sack, college athletes could then be allowed to “take control of their own marketing rights: to hire agents, sign endorsement deals and engage in other ‘entrepreneurial’ activities.” Therefore, college athletes would be able to earn money without having to receive this compensation from the NCAA or their schools.

Whether or not the NCAA decides to adopt the Olympic model, composite ethical issues are threatening the organization as a whole. While the student athlete compensation structure has been in place for decades, it is facing stronger attacks than ever before because of rising revenue, increased media attention, and concerns over fairness. The NCAA has to factor in these considerations as it moves forward with its relationships with different audiences.