NAIA becomes first to give profiting power to student-athletes

The national athletic association that represents small colleges will allow its players to earn outside money from their name, image and likeness and represent their schools
By: | October 6, 2020
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When the state of California enacted legislation last year to allow players to profit from their likenesses, it opened a potential world of opportunities for student-athletes.

It also put athletic governing bodies, including the NCAA and others, on notice.

Like it or not, college athletes in California will be able to get paid, sign endorsement deals and hire agents to represent them. Three other states have since approved similar measures and dozens more have legislation pending that will put power in the hands of college athletes.

With that wave of change looming – barring a federal law that could keep “amateurism” as we know it still in play – one association is accepting the new reality. The only question now: will the NCAA follow?

The NAIA, which represents 250 small colleges and universities, on Tuesday voted to allow its athletes the right to earn money from their personal brand and reference their schools in those deals, becoming the first college body in the nation to do so.

The new change specifically will allow student-athletes to receive compensation “for the use of name, image or likeness to promote any commercial product or in any public or media appearance.” It also allows them to be able to use their college’s name, logos or branding in endorsements, through social media spots or in TV and radio pitches.

With its endorsement, the NAIA believes it is not only empowering its athletes but also potentially setting the tone for other associations to follow.

“This is a landmark day for the NAIA, and we are happy to lead the way in providing additional opportunities for our student-athletes,” said NAIA President and CEO Jim Carr, who noted that the association had been working toward this day for four or five years. “The time was right for the NAIA to ensure our student-athletes can use their name, image and likeness in the same ways as all other college students.”

Why this matters?

The National Association of Intercollegiate Athletics (NAIA) represents 77,000 student-athletes across North America, where the average enrollment of institutions is 1,400. Teams compete for 27 championships in more than a dozen different men’s and women’s sports. It has been a trailblazer for diversity since its inception, particularly in college basketball where it led the way in integration and started the first men’s and women’s national tournament championships.

Though the NAIA’s student-athletes may not possess the same selling power as those from the NCAA, opportunities exist beyond national endorsement spots and deals, especially those within local communities and online.

That’s important because few NAIA players receive full-ride scholarships. The majority of the $800 million in scholarships handed out are partial ones. More than 80% of its members are private institutions. Offsetting the costs of tuition, room and board – not trying to make millions off endorsement deals – will be the benefit for most student-athletes. For example, a student-athlete could simply be paid for coaching on the side. For institutions, that extra blanket of support could mean the difference between being able to retain players.

“I do understand that there are some concerns, especially at the highest level of college athletics, that these kinds of things can be turned into advantages that the top programs are going to continue to separate themselves from others,” Carr said. “But I believe that having all of this above board and having rules around it and creating more free market would help more than it would hurt. I do think it will definitely allow some people to pursue things while they’re playing sports that they couldn’t have in the past.”

This is not the first time the NAIA has taken a progressive stance in the interest of student-athletes. In 2014, it opened the door to let its athletes earn compensation for their name, image and likeness, but they could not reference their institution. Last year, it increased the amount of “awards of a personal nature” they could earn.

The NAIA and other governing bodies such as the NCAA and even individual states still do not allow for athletes to be paid to pay by colleges and universities; receive “cost of attendance scholarships” that go beyond tuition, room and board; or be allowed to share in profits made by university athletic departments.

In any outside deal struck by athletes that references the institution, NAIA colleges and universities must be notified. A lot of questions still lie ahead, but Carr believes institutions still will have some leeway in ensuring their athletes are not out there linking deals that promote dangerous products, for example.

“Change is hard, and so we have a lot of folks who are thinking actively about what does this mean?” Carr said. “Are there’s still certain restrictions that the institution can require of student athletes? I think they’ll need to consult their legal counsel, but those are all, I think, fair game to be potentially implemented.”

What the approval does do, however, is definitively give a select group of small college student-athletes much more flexibility and freedom that hasn’t existed in the past.

What’s next?

The ball is in the NCAA’s court now.

College’s largest athletic governing association, which represents more than 1,250 institutions and oversees nearly half a million student-athletes, in the past sought to prevent players from earning compensation in the spirit of amateurism. At the same time, the NCAA has largely capitalized off of them, pulling in more than $1 billion in revenue in the past three years, mostly from lucractive TV deals and its March Madness men’s basketball tournament.

When California senators proposed the Fair Pay to Play Act (SB-206), NCAA President Mark Emmert said it would “alter materially the principles of intercollegiate athletics and create local differences that would make it impossible to host fair national championships.” Gov. Gavin Newsom signed it into law anyway.

Initially, the NCAA bristled at the stance and offered that California athletes might not be eligible to play in its national championships. But with Florida and others climbing aboard Pay to Play, that tangled web has gotten bigger for the NCAA. Now, Emmert says “the NCAA is uniquely positioned to modify its rules to ensure fairness and a level playing field for student-athletes.”

But not completely.

Though the NCAA says it has relaxed some of its longstanding regulations around athlete compensation – allowing for some name, image and likeness approval – it has stopped short of California’s Fair Pay to Play law. One notable omission is not allowing athletes to reference their colleges or universities or use their logos in commercial endeavors. Another is a potential cap on compensation.

The NCAA is seeking from Congress national regulation on the issue, pleading that the governance of tournaments and play are complicated by states who are either in limbo or enacting their own rules. For example, California’s athletes would not be able to profit until 2023, however Florida’s would … in 2021.

Politicians are listening. They agree that hosting national tournaments where rules over athlete pay differ from state to state could create imbalance, and they are also cognizant of boosters and recruiting. But they’re also wary of restrictions that might inhibit student-athletes from earning proper compensation. As the NAIA has noted, what is reasonable compensation and what isn’t?

Just last week, a bipartisan bill introduced in the House of Representations called the “Student Athlete Level Playing Field Act” aims to level the playing field. Where it ends up is anyone’s guess.

For now, the NAIA believes the smart path is to simply come alongside the states and give student-athletes as many opportunities and benefits as possible. And the likelihood that tournaments will be played without interference is good.


Chris Burt is a reporter and editor for University Business. He can be reached at cburt@lrp.com