April DEI – Interview with Jeremy Evans Regarding NCAA Student Athletes

April 2024

Welcome to our interview with Jeremy M. Evans, where we explore the evolving landscape of NCAA student-athlete compensation through the lens of diversity, equity, and inclusion (DEI). At the heart of our DEI efforts lies a commitment to fairness, opportunity, and empowerment for all individuals, including student-athletes.

Mr. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. Jeremy is an expert in best practices and negotiations in entertainment, media, and sports. He represents such clients in contractual and intellectual property negotiations with a focus on dealmaking. His clients range from Fortune 500 corporations to entrepreneurs, advertising and production companies, studios, agencies, talent, and more. You can read his bio
here.

Jeremy’s insights into the changes in pay among college athletes and coaches provide a crucial perspective on how equity and fairness intersect within collegiate sports. As we navigate discussions around athlete compensation, it is essential to consider the broader implications for diversity and inclusion within the NCAA.

The O’Bannon v. NCAA case, as Jeremy highlights, serves as a pivotal example of how disparities in compensation can disproportionately affect certain demographics within collegiate athletics. By addressing these issues, we strive to create a more equitable playing field where all student-athletes have the opportunity to thrive, regardless of background or identity.

Furthermore, Jeremy’s examination of the legal evolution surrounding athlete compensation underscores the importance of inclusive policies and regulations that uphold the rights of all student-athletes. As we advocate for fairness and transparency, we remain committed to fostering an environment where diversity is celebrated and every individual’s voice is heard.

Join us as we engage in this important dialogue with Jeremy M. Evans, exploring how the principles of diversity, equity, and inclusion shape the future of NCAA student-athlete compensation and pave the way for a more equitable and inclusive collegiate sports landscape.

This interview was conducted by John Robinson, a member of NALA’s DEI Task Force.

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Can you please explain the change in pay among college athletes and coaches?

Sports is the one place that is always about performance.

The NCAA (National Collegiate Athletic Association) is not all bad. They are a nonprofit trade organization that brought together universities to organize sports. That was the whole intention. College sports are very popular. Folks wanted to watch on television, particularly men’s college basketball and football. College sports make a lot of money and not just from television and streaming. More money came in from what kind of tablet you used and what shoes and apparel you were wearing on the sidelines.

The Ed O’Bannon case was about gaming, and that was a real turning point. Most athletes think it’s a fair exchange to get a scholarship to play, especially since less than one percent of college athletes make it to the pros. However, money is being made by video games, jersey sales and apparel, and TV. “Part of that money,” the players thought, “should be mine.” In other words, “If I’m creating value, then I should be paid.”

NFL and NBA used to require players to go to college. That has changed. Now in the NBA draft, five to 10 players are coming from overseas or not from college. In the Overtime Elite League, high school basketball stars can play and get paid. The NBA used to have a rule that you had to play for at least one year in college to play in the NBA. The rule for the NFL is that you have to play college football until you are a junior.

(Underclassmen must be out of high school for at least three seasons before they can request the NFL’s approval for special draft eligibility per 2024 NFL Draft underclassmen tracker: Which college football players intend to enter?)

If you remove those rules and use other leagues like the United Football League, there could be a minor league. Then the athletes don’t have to go to college.

A lot of the money made by the NCAA is paid back to the schools per agreements. The money going back to schools goes back into other programs. Universities’ use of the money is not well managed. Coaches are paid more than the players because that is the market that is set for them. Amateurism is not a bad thing. What better system can we set up?

Most student-athletes that I have talked to are okay with not being paid. NIL (name, image, and likeness) provides an opportunity to get paid via the private market. Athletes are paid according to their social media and star value. Athletic departments are now taking over NIL management and using collectives to bring in money. Jim Harbough (former college football coach at Michigan) talked about splitting revenue, and legislators have also looked into this. If we’re going to pay 50% of the revenue, the sports need to be removed, and we end up with schools independent from the NCAA. The resulting mini-NFL and mini-NBA might not be the answer.

Realignment – schools going from one conference to another – is about keeping up with the Joneses and making sure that universities receive enough money from their contracts to do so. The pandemic hurt the universities because their contracts went down. The Pac-12 (now the Pac-2) was trying to get a media rights deal for $30M-$40M and had a chance to move down to $25M with the Apple deal. However, some universities from the Pac-12 decided to go to the Big Ten for $70M – of course. And you also get to play some of the biggest schools in the country in the Big Ten.

I’m hoping that the NCAA will put the hammer down. NILs have to be privately done – it is better if there is no school involvement and management. I do not want schools to take a percentage. I do not want schools representing athletes. Athletes want private representation. If these are private deals and you set the parameters, it is a better situation.

The California Fair Pay to Play Act says you can sign any deal that you want, but it cannot conflict with the other aligned universities. For example, the issue with the University of Southern California (USC) and their current case over college athlete employment with the National Labor Relations Board (NLRB) is that there are people in the athletic department who claim they didn’t know that they could not have these competing deals.

The NCAA rules have been clear and pretty consistent. You can’t pay the players directly. The NCAA has not established itself as the authority in this space. It has been more reactive than setting policies and standards. It’s unfortunate. Most athletes have a good experience getting to play sports and having a scholarship. Most athletes do not go on to play in the pros. Getting paid to play is a foreign idea to most college athletes.

What is the legal evolution from student-athletes not being paid to how the student-athletes are being paid today?

Ed O’Bannon was a UCLA basketball star. He sued EA Sports for using his image in a college basketball video game. The game was stopped and no longer made, which was the first priority. The second priority was getting paid, but that was not substantial. The case set a precedent as to how college athletes should be treated.

The NLRB case with Northwestern was about the unionization of athletes. Ultimately, the case was not successful but put further pressure on the NCAA and the industry to make changes.

Then the states created fair pay-to-play acts, and California’s was the first NIL law. This stated that athletes can make money off of their name, image, and likeness. California moved their enactment date up, and that was the big launch. There are two interesting points. One, the launch only mattered if the NCAA allowed athletes to accept something of value and sign with an agent – two major prohibitions for a long period of time. Once that changed, the doors opened. Two, California already had name, image, and likeness on the books under the guise of rights of publicity. The NCAA forbade it until later.

The whole transfer portal thing that allows athletes to transfer more easily created the wild, wild west of transfer portals and collectives. Collectives are being used to pay athletes to come to the schools. They use NIL money to recruit athletes. Michigan just signed several players away from Alabama.

The Altman case was not the reason for NIL. It was really about scholarship money. Brett Kavanaugh, United States Supreme Court Justice, wrote in his concurring opinion that schools cannot limit scholarships. They cannot limit scholarships in a collective way. This will violate antitrust law. There are also questions about insurance and health coverage and how much will be provided.

The issue of transfers and the transfer portal is being litigated. Will the transfer portal be completely opened up?

The issue of collectives is being litigated. What are their purposes, and should they be allowed?

A players’ union for college athletes would be the next step. That is the short and cheap history.

What is the history of revenue and payments from the past up to now in terms of college sports, especially college football and men’s college basketball?

From 1900 through 1950, which was essentially prior to television, there was no big money, even with radio. From 1970 to 1990, college sports gained a lot more traction. It had always been popular, but the branding and the marketing made a difference. In the 1980s, college sports really started to become a business.

The University of Miami and their turmoil and championships drew a lot of attention, especially contrasted with the supposedly strait-laced Notre Dame. Then Southern Methodist University (SMU) received the death penalty – they were suspended for the 1987 and 1988 seasons for paying several of their football players. They were not the only school to pay players. More dollars led to more issues.

Colleges were looking for ways to have a competitive advantage. The mindset is, “We are going to pay athletes if we can’t compete otherwise. We are just going to buy the best team.” (Many ESPN 30 for 30s are great to watch – University of Miami and Marcus Dupree are two that come to mind.)

In every sport, it’s a balance between team chemistry, players, and leadership and that can’t be bought. ESPN started in the late 1970s and early 1980s. ESPN was looking for content. Their thinking was, “We should pay for this and sell these copyrights.” College football and men’s college basketball were really popular, so they provided programming opportunities. This led to changes in the conferences.

Conferences were thinking, “We should bring in more schools and organize more.” Texas A&M left the Big 12 to go to the SEC for the same reasons that UCLA and USC left the Pac-12 to go to the Big Ten.

Money was being put into broadcasting and stadiums, and this led to more advertising and sponsors coming in. Michael Jordan started the shoe deals. He created huge deals for professionals, and then the universities followed suit. You can’t blame the universities because you have people throwing money at you. It’s the implementation of it that became an issue – how athletes are being treated, or whether or not they are being paid, and the fairness of it. The biggest issue has always been whether athletes would have a choice if those rules were not in place.

Mike Vrabell, the former coach of the NFL’s Tennessee Titans, once said that we (the NFL) do have a minor league system. It’s called the NCAA. It would be less of an argument to pay athletes if they had the option to go pro or go to college. You don’t see college baseball players asking to get paid, and the same thing is true for NHL and soccer. In the other sports, there are no established pro leagues, although volleyball and lacrosse are coming up.

President Nixon started Title IX, which states that there has to be equal treatment for women in college sports (Title IX of the Education Amendments of 1972 applies to schools, local and state education agencies, and other institutions that receive federal financial assistance from the US Department of Education). We can’t cancel women’s sports – it has to be even. Pretty much every school takes money from the federal government, so the schools have to follow Title IX. Now it’s a big issue because, when universities manage NIL, they have to do so in accordance with Title IX.

One argument is to give all the Division 1 athletes $30,000 a year to be held in trust. However, the college model is not built for that. It’s never been built for that. Now the college model is struggling because you have athletes who want to be paid. If there were separate divisions and rules set in place, that might be possible. Congress is concerned about what status the athletes have. Are they employees? This opens up another can of worms.

What is the future for college student-athletes, especially in terms of pay?

This may be one of the best questions that we have to think about.

There are three different pathways.

1. College football and men’s basketball separate from the other sports. Independent divisions are then set up and do what the College Football Playoff does (the College Football Playoff is a postseason event to determine college football’s national championship). This is a private entity that set up its own structure to see huge TV ratings.

Starting in 2025, twelve teams will be competing for the national championship. The market effect is we need to separate this from the NCAA, and the same thing for March Madness (college basketball’s postseason tournaments to determine men’s and women’s college basketball national champions).

2. Another option is we can pay salaries and set up a union. How does this connect to academics? Pay could be to scale like in the actor’s union. If you are an elite-status athlete, you get paid more money based on market share and then you still have NIL. Can Congress come to an agreement about this and whether they are employees? Two points on Congress. Congress is taking a long time to do things, and that is okay.

The problem is from a commandeering standpoint. The gambling act was overturned (forbidding gambling in some states), and that is the reason why NILs will not pass all states. College athletes are currently considered independent contractors versus employees. Not all states will legislate the athletes to be employees. For example, the federal government controls immigration.

However, it is difficult to do that with NILs. If states passed a NIL law and then the federal government came in and said you can’t do that, every state in the union would sue. The governor and the legislature not agreeing is another issue. The CFP is already independent so it does not have to agree with the NCAA.

Chip Kelly, offensive coordinator for college football’s Ohio State, talked about creating a 64-team conference with a tournament where you play each other. It was very informative. I haven’t heard that before. The problem will be with March Madness because they have trademarks and will not give that up.

3. NCAA comes in with an iron fist. These are the rules, you have to play by them, and those who don’t will be disciplined. They outlaw or limit the use of collectives. The NCAA will be very strict about paying players. Universities will no longer manage NILs but instead make sure they are compliant. NIL deals will be limited to those that reflect the market value of the player.

The way things are going, we are moving to the first point, which is basically a private entity. The reason is that the Power 5 (now the Power 4) already has significant autonomy from the NCAA. (The Power 5 refers to the five athletic conferences that are considered the most prominent in NCAA Division 1 college football – ACC, Big Ten, Big 12, and SEC – and the Pac-12, which is now the Pac-2, is no longer a power conference.) It makes more sense to have a National College Conference for football for Division 1 schools.

I doubt this would ever happen, but you could have a relegation system. At least you would have a process in place for Division 2 schools that move up to Division 1. Once they have a certain amount of money and success, a lot of schools move to Division 1. It would be like soccer, where teams that don’t perform are demoted to Division 2, and teams that perform well are promoted to Division 1. Either situation could probably work, but more privatized is probably the future. Even in an open-market system, there still needs to be significant rules, guidance, and requirements for players and universities to avoid under-the-table pay and illegal activity.