Throwing Out the Rule Book

Pull up a chair, sports fans. The past century’s paradigm—in which student-athletes compete in exchange for an education—is being upended. And where the ball will land is anyone’s guess.

September 2022

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Illustration of money and sports equipment falling out of a book being held by a referee

Illustrations by Alex Nabaum

Tara VanDerveer has been a women’s college basketball coach for 43 seasons, 36 of them at Stanford. She has won more games than any other women’s college basketball coach in history. She has led the Cardinal to three NCAA championships. VanDerveer has watched the sport grow from afterthought to phenomenon. She has watched intercollegiate athletics transform from sideshow to industry. She has watched over the past 18 months as liberalized rules have allowed players to reap thousands of dollars in payments, as they move from one campus to another without repercussion, as the rules known by all college sports fans—the ones that stipulate that student-athletes compete at an amateur level in exchange for a college education—have been rewritten.

And now she has a courtside seat as Stanford and its Pac-12 brethren seek a financially stable future following the shocking announcement on June 30 that USC and UCLA will leave the Pacific-12 Conference for the Big Ten, effective in August 2024.

“It feels like we’re in a little bit of a maze,” VanDerveer says. “It does feel like things are really challenging. I know there’s a way out. We just have to figure out what that is.”

She laughs.

“I like puzzles,” VanDerveer says.

At the dawn of a new academic year, intercollegiate athletics stands at the precipice. We are midway through the second year of a revolution on the sweaty side of higher education, and, as in year two of most revolutions, the old rules have been tossed aside and the new ones aren’t quite formed. In other words, we don’t yet know whether the next step off that precipice is into a new model that will succeed for decades or straight off a cliff.

When you see whats going on now, you wonder, “When is this whole thing going to blow up?” The amounts of money are staggering.

If you ask coaches, athletic administrators, agents, or anyone else in the business, their consensus about the future of college sports is that (a) the current situation is unsustainable, (b) someone needs to do something, and (c) no one knows what that something is.

In a matter of months, intercollegiate athletics has been unsettled by issues involving money paid to college athletes, both by their schools and by outside boosters and businesses; by the athletes’ newfound freedom to leave one program for another without the traditional penalty of “redshirting,” or sitting out a year of competition; and by the decision of the Los Angeles schools to decamp to the Big Ten. These changes have discombobulated those within the game and those who watch it.

• The idea that college athletes should be able to market their name, image, and likeness (NIL) has been percolating for more than a decade, fueled by both litigation and legislation. If a music student can sell her recording or play her gig, and an art student can show his work in a gallery, then, the reasoning goes, an athlete ought to be able to record a commercial, sign autographs, or stage a clinic. Once California passed a state law allowing NIL deals to take effect in 2021, other states rushed to match it. The sanctity of amateurism paled before the prospect of permitting USC, UCLA, Stanford, Cal, et al. a recruiting advantage. The NCAA, recognizing that it was no match for the state laws, allowed NIL deals everywhere. Its policy banned schools from using such deals as a recruiting enticement, a rule almost instantly ignored by football and basketball recruiters. 

• College players in search of greener grass enter the NCAA “transfer portal,” disconnecting themselves from their guaranteed four-year scholarship to seek a better opportunity. But only 54 percent of those athletes who entered the transfer portal in 2020–21 found a second home. Four in 10 either didn’t find a match or gave up the sport. That’s not an outcome that any educator desires. Combine the transfer portal with NIL, and you’ve got a recipe for reduced team loyalty: Booster collectives raise NIL money not just for recruitment but also for retention. Ohio State head football coach Ryan Day estimated this past spring that Buckeye donors needed to deliver $13 million to his 85-man roster to keep it together. 

• The U.S. Supreme Court voted 9–0 last year to allow universities to pay their athletes up to $5,980 per year for “academic achievement” (your definition here). The decision in NCAA v. Alston not only legalized direct payments over and above athletic scholarships from universities to athletes; it also fueled the idea that an athlete can be a university employee. Enter labor law, unionization, and all that comes with the employer-employee relationship, and intercollegiate athletics becomes something unrecognizable compared with what it was even a decade ago.

• USC and UCLA will exit the Pac-12 for the bigger media rights fees of the Big Ten. Currently, the Pac-12’s income is about 60 percent of the Big Ten’s, and without a member in the Los Angeles media market, it almost surely will fall farther behind. Were Stanford to try to take its record of academic and athletic achievement to another conference, it would have to deal with the same travel issues that await the Trojans and Bruins. Every conference road game (except against each other) will take place two or three time zones away.

Entropy increases

In the middle of revolution, it’s hard to know which side is winning.

From his perspective as a scientist, “there’s only so much entropy a system can handle,” says Jeff Koseff, MS ’78, PhD ’83, a professor of civil and environmental engineering and Stanford’s faculty athletics representative to the NCAA. “When you see what’s going on now, you wonder, ‘When is this whole thing going to blow up?’ I don’t know how long this can go on. The amounts of money are staggering.”

Some two decades ago, Stanford Alumni Association president Howard Wolf, ’80, had an impromptu breakfast with the president of the NCAA at the time, Myles Brand. As Wolf related it to me—I reported it for ESPN in 2013—Brand stopped him as he got up to leave the table. He had something to say.

The NCAA membership needed Stanford to win.

“It is vital that Stanford succeed athletically,” Brand said, “not only in the Olympic sports but in the marquee sports. If Stanford succeeds across the board, it shows the world of intercollegiate athletics that it can be done and done the right way.”

Argue all you like about which American university provides the best education. But there is no arguing with the fact that the Cardinal maintains a broad-based athletic program that has won 131 NCAA championships, more than any other school. The university and its alumni take pride in residing in the sparsely populated Venn diagram of academic and athletic excellence. Which means the changes roiling intercollegiate athletics have left university officials at least as apprehensive as their national peers.

Man holding scales with academics and sports equipment in them

Stanford’s approach, says athletics director Bernard Muir, is not one of “because everyone else is doing it, we just follow.” Instead, the university is weighing each decision carefully. “We are considering where we put the stakes and say, ‘Not this but this,’” he says. “That’s the exercise we’re going through right now. That’s really uncomfortable. We’re just not sure.”

Take so-called Alston payments. Were Stanford to make them to the 800 student-athletes on its varsity rosters, it could add up to $5 million annually. Three Pac-12 schools already have begun making Alston payments to their athletes—Oregon paid out a total of more than $2.6 million to 521 athletes in 2021–22—so the financial demand becomes a competitive exigency as well.

Yet both pale before the philosophical dilemma of providing money to athletes that is not available to the other 6,800 or so undergraduates on the Farm.

The differences in philosophy among schools may manifest in a breakup of NCAA Division I, the highest level of intercollegiate athletics. “We probably need two models for college sports in the United States,” says Notre Dame athletics director Jack Swarbrick, JD ’80. He sees a professionalized, minor-league model at one end of the spectrum and an Ivy League–style integration of athletics into the university at the other. “I think different students will pick different models and schools will pick different models.”

Amateurs’ hour

How did we get here? Can’t we just get back to what’s important, like beating Cal?

The premise of Division I intercollegiate athletics as it operated for the past century or so is that players—student-athletes in NCAA parlance—could receive a free or partially free college education in exchange for their hand-eye coordination. The definition of a scholarship generally included tuition, books, and room and board. Sometimes it included cash. In the mid-20th century, it was called “laundry money.” More recently, money has been provided to athletes through cost of attendance—a Department of Education formula that computes the total amount necessary to attend a school, including the cost of a computer and trips home—and Pell Grants, a federal program for low-income students.

The more years that went by, the more benefits accrued as part of an athletic scholarship. Today’s players may receive cost of attendance, Pell Grants (if they qualify), medical care, state-of-the-art athletic training, on-demand academic tutoring, an abundance of food, funds for emergencies, and travel expenses for their families to championship events. Yet the NCAA and its member schools continued to maintain that student-athletes competed as “amateurs.”

“We were screwing it up incrementally,” Swarbrick says, “and pursuing legal strategies that were just mindless to me. I could go on all day about how silly that was.”

Once upon a time, the NCAA served as the savior of intercollegiate athletics. In 1905, after 18 players had died in college football games in the previous year, President Theodore Roosevelt summoned the presidents of Harvard, Yale, and Princeton—the prevailing powers of the day—to the White House. He told them that if they didn’t fix the sport, the government would.

From that forced genesis, the NCAA evolved into the standard maker and rule enforcer of college sports. Some of its role is essential—someone has to decide the size of the playing field. Some of its role is impossible—the NCAA has long attempted to make the playing field level, as if anyone could put Ohio State and Ohio University on equal footing. The micromanagement inherent in creating rules for several hundred universities and colleges of all sizes turned the Division I NCAA Manual into a bureaucratic thicket.

The NCAA began to flex its muscle after World War II, when television brought football into the American living room. In the early 1950s, the NCAA strong-armed its member schools into signing over their media rights as a condition of membership. The association televised a handful of games each Saturday and didn’t allow any team to be televised more than two or three times a season.

In 1984, the U.S. Supreme Court ruled that universities owned their media rights and that the NCAA couldn’t usurp them. That case opened the spigots of money (Division I football and basketball revenue in 1985, $963 million; in 2016, $13.5 billion) that transformed intercollegiate athletics from a loose confederation of mom-and-pop grocery stores into something more closely resembling Walmart. Schools signed their media rights over to their conferences. Conferences looked to expand their geographic footprint to gain larger rights fees—more viewers equals more money—which began the era of conference realignment. That’s why Penn State joined the Big Ten in 1993, why Utah and Colorado moved to the Pac-12 from the Mountain West and Big 12 conferences, respectively, in 2011, and why USC and UCLA will leave their geographical rivals of more than a century for the Big Ten.

The present round of realignment, which is expected to last into the 2030s because of existing rights contracts, could yield an unprecedented level of lopsidedness. In the 2018–19 academic year, Pac-12 members received $32.2 million apiece in media rights payments. Big Ten members received $54.3 million each; SEC members, $44.6 million. As they add teams, the Big Ten and SEC are pulling further away—the Big Ten just signed a $7 billion–plus, seven-year contract that should drive the annual per-school payout above $80 million within a few years—whereas the value of Pac-12 media rights could lag without the anchor of a presence in the Los Angeles market, the second largest in the country.

The money flowing into the game has also ramped up the coaching marketplace. It’s been only 25 years or so since the first head football coach received a seven-figure salary. In July, Georgia coach Kirby Smart signed a contract that will pay him $112.5 million over 10 years.

The narrative of coaches becoming wealthy thanks to the labor of their unpaid athletes has gained purchase in the public imagination. Associate Justice Brett Kavanaugh used it last year in his concurring opinion in Alston.

“[E]normous sums of money flow to seemingly everyone except the student athletes,” Kavanaugh wrote. “College presidents, athletic directors, coaches, conference commissioners, and NCAA executives take in six- and seven-figure salaries. Colleges build lavish new facilities. But the student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds, end up with little or nothing.”

Wait a minute, schools said. Little or nothing? Student-athletes receive a four-year college education, valued on some campuses at more than $300,000. “Statistics show that if you get a great education, your chances of greater success, upward mobility [are] higher,” says Muir.

NCAA members also pointed out, like Jimmy Stewart trying to stave off a bank run in It’s a Wonderful Life, that the money that came in wasn’t sitting in the athletic department vault; rather, it funded all the other sports in their intercollegiate program.

That argument happens to be true. “Revenue sports” fund “nonrevenue sports.” But the public has failed to accept the idea that football players should play so that wrestlers can wrestle and swimmers can swim.

The NCAA, rather than develop a plan to satisfy the growing call for player compensation, tried instead to maintain the status quo. It banked on the intrinsic importance of amateurism, the quaint 19th-century notion that one mustn’t be compensated for one’s athletic labors, itself a construct that fenced off sports for the educated elite.

The Olympic movement ditched amateurism years ago when it got in the way of having the best athletes. Universities, through the NCAA, continued to declare fealty to amateurism even as they stretched the meaning of the term.

“I think this situation was in many ways brought about by the greed of the NCAA—the greed and the shortsightedness in not recognizing that what they had was not amateurism at all,” Koseff says. “They used the pretense of amateurism as a shield or a reason not to share revenue.”

For instance, athletes did not receive royalties when their schools sold jerseys with their numbers on them or when their schools licensed their likenesses to video game makers. The popular EA Sports game NCAA Football 12 included a brawny Stanford tight end wearing No. 86 who caught every pass thrown near him. EA Sports made money. Stanford made money. Zach Ertz, ’13, did not. A class action on behalf of student-athletes convinced EA Sports to discontinue the game. The company intends to sell it again in 2023, this time paying royalties to the players.

On the money

The idea of student-athletes being able to profit from what is obviously theirs—their name, image, and likeness—is unassailable. Muir estimates that 90 of Stanford’s 800 student-athletes have made about 200 NIL deals since July 2021, when they were first allowed.

It also has a clear benefit for world-class athletes who want to compete in college. Had NIL been in place at the time, Katie Ledecky, ’20, could have remained a Stanford swimmer after she signed a $7 million deal with TYR sportswear. Instead, she turned professional after two seasons.

One of our high school signees said to me,  “Wow! I signed a  big NIL deal.”  What is big to a high school kid?

In case you haven’t noticed, though, there aren’t many Katie Ledeckys in the world. Based on the imperfect data available, consensus is that the average NIL deal is likely in the low four figures. “There could be some seven-figure deals; I don’t know. Call me a skeptic,” says Oliver Luck, a former university athletics director and NCAA executive who now does NIL consulting for schools. He says the marketplace “will continue to be unsettled” until there’s a nationwide registry of NIL deals. “It’s important for kids too,” says Luck, three of whose four children—All-American quarterback Andrew, ’12, volleyballer Mary Ellen, ’14, MBA ’22, and soccer player Addison, a Yalie—competed in college. “It will set their expectations: ‘Oh, the average deal is only $1,200.’” 

NIL has captured the imagination of recruits, not all of whom are aware that they could be signing away rights for years. “Athletics is about a 15- or 16-year-old mind,” VanDerveer says. “This is who you’re recruiting. This is interesting to me. One of our high school signees said to me, ‘Wow! I signed a big NIL deal.’ What is big to a high school kid?” 

The most significant problem, though, isn’t the individual arrangements between companies and athletes. It’s the systemic warping of NIL to recruit and retain players. In football and basketball, the most lucrative and highest-profile college sports, NIL has overrun any semblance of decorum.

Schools and their boosters have a long history of allowing competitive desire to overtake the NCAA Manual, especially when it comes to providing money to prospects. One popular view of NIL is that it has brought deals over the table from their long home under it. But there is considerable frustration among coaches and administrators with how the one condition that the NCAA attached to the NIL rule—don’t use it to entice recruits—was so roundly and immediately ignored.

“What NIL is supposed to be is not necessarily what is happening right now,” Stanford head football coach David Shaw, ’94, said earlier this year. Rather than a typical business transaction—an athlete is paid to meet and greet, or to endorse a product—NIL is providing quid without asking for quo.

“So much of the money is, ‘Hey, you want to come to school here? Here’s how much you’re going to be making,’” Shaw said. “‘We’re going to hand it to you. You don’t have to do much for it.’”

Donors have established “collectives,” which only sound socialistic. In theory, collectives, operating independently of their schools, use economies of scale to make better NIL deals available to student-athletes. Some provide a marketplace of commercial opportunities; some pool boosters’ funds directly; some do both. In reality, many of the 120 collectives operating to date make a mockery of the wall that is supposed to exist between an athletic department and NIL deals.

“No one’s enforcing the rules,” VanDerveer says. “If you say, ‘You own your name, image, and likeness,’ great. Just like a music student could sell their music. But is the music department at Stanford calling all the [donors] and saying, ‘For every music student, we’re going to have a fund’? They’re not doing that. But that is the collectives, and that is what’s happening with athletics” at some schools.

Stanford recruits athletic prospects by pointing out that college is not a four-year decision; it’s a 40-year decision. That pitch assumes that athletes understand the value of a college education in general and a Stanford degree in particular. But many elite college prospects now view college as a financial end in itself. It’s getting more difficult to convince them that education will pay dividends over a lifetime, especially when recruits see money dangling in front of them in the here and now.

Alabama head football coach Nick Saban, who has been among the most vocal critics of NIL without enforceable rules on recruiting, takes pains to say that he is all for his players being able to make NIL income. When you make $9.5 million annually (before incentives), you take those pains, especially as you lay out a version of the 40-year-decision argument.

“College is supposed to be about creating value for your future, not to see how much money you can make in college,” Saban says.

While NIL advocates were working state legislatures, a group of former student-athletes including West Virginia running back Shawne Alston sued the NCAA for violating antitrust laws by limiting compensation. The Supreme Court affirmed the decision of a lower court that removed restrictions on education-related benefits, which allowed schools to begin making Alston payments of up to $5,980 per year for academic achievement. Those payments are philosophically different than NIL money. NIL grants rights to athletes that every other student enjoys. Alston money is provided to student-athletes because they are student-athletes. Music students, art students, future historians and engineers don’t have the opportunity to receive the same. That clangs against the academic sensibility.

There is a fear that the road from Alston payments to an employer-employee relationship is a short one, and it’s a road that many universities don’t care to traverse. The National Labor Relations Board general counsel wrote a memo last year taking the position that students who receive athletic scholarships at private colleges should be considered employees with the right to unionize. Justice Kavanaugh’s concurring opinion in the Alston case last year practically begged to strike down the remaining NCAA rules that prevent schools from paying athletes.

“The NCAA’s business model would be flatly illegal in almost any other industry in America,” Kavanaugh wrote.

And so, a new world order. Universities are confronting it with the understanding that Alston isn’t the end of change but the beginning.

Its not amateurism anymore. But what is it  moving forward? Thats what the leaders of college athletics need to decide.

“Maybe institutions can adapt. But it’s going to be met with a lot of resistance,” Muir says. “The notion for generations has been student-athletes are in this along with the student body. They’re going to classes. They’re trying to get an education. And then they do get to compete. Now we’ve provided a little flexibility for them to earn dollars, just like the general student has that opportunity as well. That sits well. That plays well. It’s a bit choppy, but overall it plays well. Going beyond that, where [athletes are] just a cordoned-off group that can now be, in a sense, employees of the university? That’s a real struggle, because then the focus is not even on education.”

Now what?

“It’s not amateurism anymore,” says Missouri head football coach Eliah Drinkwitz. “But what is it moving forward? That’s the question. That’s what the leaders of college athletics need to decide.”

There are as many models of the future of intercollegiate athletics as there are predictors. There is the spectrum to which Swarbrick referred. At one end is a Premier League model, in which the top 30 to 50 programs agree to continue to spend to their hearts’ content. There is a version of that model in which universities license their trademarks to programs that are collegiate in name only—in other words, professional—in the belief that, say, Georgia fans care more about beating Florida than they do about whether actual students are wearing the red and black.

At the other end of the spectrum are various versions of the Ivy League model, in which education and athletics remain partners. (The Ivy League does not provide athletic scholarships; further along the spectrum, other schools might continue to do so but discourage collectives or decline to make Alston payments.) There is a significant portion of the intercollegiate athletic community that believes that athletics and academics must continue to coexist because of all the good that athletics has done, even if it has been done imperfectly.

Athletics administrators believe in the lessons that college sports provide. So many administrators learned those lessons themselves.

“To be able to test yourself individually, collectively as a team, against other programs—there is something that you walk away with that certainly affects who you are,” says Muir, who played basketball at Brown. “I think if you polled many who have worn the uniform, they would say such, and that’s why we’re so protective of this model—because we know there’s great benefit.”

Moreover, “college sports have allowed thousands and thousands of young people this chance for upward mobility,” he says. “And students have taken full advantage of it. We think that’s a good thing. If we go to any other model we’re talking about here, they might not get that chance.”

Stanford has been unmatched in combining academic and athletic excellence, and has done so with exquisite understanding on campus of which is the dog and which is the tail. The road ahead, to put it politely, is uncertain. Each school will weigh its values and make trade-offs: whether (and how much) to pay student-athletes, to encourage or discourage collectives, to compete regionally or chase the biggest piece of conference-revenue pie. If the athletes have to fly across the country several times a season, their academic life and student life will suffer. There are games to play.

One general rule pertaining to the state of intercollegiate athletics is that the older you are, the more the new order rattles you. We’ve come a long way from laundry money. We’ve come a long way from two years ago. And there is a long way to go.

Ivan Maisel, ’81, is the vice president of editorial and a senior writer at On3.com. Email him at stanford.magazine@stanford.edu.

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