With NIL rule changes on the horizon, some Penn athletes may be in line for a payday

Sooner rather than later, Penn students may see their athlete classmates in advertisements on social media and around the city of Philadelphia. 

The NCAA outlined a timeline for its planned Name, Image, and Likeness (NIL) legislation – one that projects the completion of “initial legislative proposals” by August, and final drafts by October 2020. The passing of this legislation would put the debate to rest, and Penn athletes may soon have the opportunity to receive compensation from third parties for their NIL.

To be clear, the proposed legislation would allow NCAA athletes to receive compensation in the form of endorsements from third parties, but not from their own university. 

Thus far, the Ivy League has not been affected by state NIL legislation, as laws have only been passed in California, Colorado, and Florida, though New York and Pennsylvania lawmakers have expressed some interest in passing similar laws. 

In late September 2019, California passed its Fair Pay to Play Act, becoming the first state to establish such a law. Prior to this, and as remains the case in most other states, universities in California could deny their students the right to profit from their name, image, and likeness.

By October 2019, the NCAA’s Federal and State Legislation Working Group, which was created in summer 2019, advised the Board of Governors that NCAA policy should be amended to allow student-athletes to gain NIL compensation. 

The Board agreed. This working group continued to provide recommendations to the Board of Governors until April 2020. 

Colorado established similar legislation this past March. Like the California law, Colorado’s law will not take effect until January 1, 2023. Most recently, Florida Governor Ron DeSantis signed a bill in June that will allow athletes to profit from endorsements as early as the summer of 2021. 

If the NCAA’s legislation is approved and passed by January 2021 – which it is expected to – it would go into effect before the 2021-2022 academic year, long before the California and Colorado laws were to be enacted.

As for why the NCAA did not address the issue of NIL legislation until recently, it said in a statement, “After taking action to improve academic support, provide the cost of attendance, guarantee scholarships and strengthen health and safety, among many changes, the NCAA membership determined that exploring this issue was an important next step to support student-athletes.”

Federal NIL legislation would apply universally to college athletes, so while some athletes may be more likely to earn endorsement deals, all athletes would have the opportunity to do so. This means that Penn athletes are legally just as eligible as athletes from every other school. 

“Most of the opportunity will [exist for athletes in] the Power Five football and basketball programs,” Wharton Sports Business professor Robert DiGisi said. “But even the star player on the Penn football team is going to have to comply just like a lacrosse player on Alabama or Notre Dame’s women’s lacrosse team. Penn is going to have to have those opportunities.” 

“It’s really [a question of whether] those opportunities will be there for Penn athletes. Is there a reason why [businesses are] going to want to sign up a women’s crew member or a men’s golf member [...] for promotional purposes?” DiGisi said. 

DiGisi suggested a few ways by which Penn athletes might be able to take advantage of these opportunities. Under new NIL legislation, Penn athletes could earn money from providing individual instruction or lessons, or from curating sponsored Instagram posts. 

As for which Penn teams or athletes would be the most profitable, the answer is fairly clear. 

“The ones who are the most visible because they have the biggest audience,” DiGisi said. “That’s the real answer. Then the obvious next step is, well, that means basketball and football. It means women’s basketball, too.”

It is estimated that national college athletics stars such as UNC's Cole Anthony or Clemson's Trevor Lawrence could earn nearly half a million dollars per year as a result of new NIL rules.

And while Penn does not have any bona fide stars, that doesn't mean that Penn athletes won't get paid.

The industry standard for professionals hovers around $0.006 per follower per post, meaning that several Penn athletes would be in line for considerable, albeit smaller, paydays. 

For example, Penn quarterback Ryan Glover has a sizable following of nearly 18 thousand on Instagram, and someone like him could be able to benefit from these new rules. A FiveThirtyEight study found that athletes with similar followings would be able to make as much as $10,000 per year off of social media alone. 

When the NCAA board made its announcement about proposed NIL changes in October, it listed a number of principles by which it would stand, including “ensuring student-athletes are treated similarly to non-athlete students unless a compelling reason exists to differentiate.” 

According to Wharton Sports Law professor and former Daily Pennsylvanian sportswriter Marc Edelman, NIL legislation would do just that. Edelman is of the mindset that college athletes should be allowed to earn money from sponsorship and endorsement deals, and that by preventing them from doing so, schools are interfering with their students’ free market opportunities.  

“When I was a freshman at the University of Pennsylvania, [actress] Elizabeth Banks was a senior at the College. There was nothing that prevented Elizabeth Banks from being involved in anything related to drama at the University, even at the same time that she may have been making money as an actress,” Edelman said. 

Star musician John Legend was a freshman at the same time as Edelman, and similarly was not barred from participating in a cappella groups just because he could have been earning money from endorsements outside of Penn.

“So the notion that a college athlete is not allowed to use [their] fame to sign endorsement deals while playing a sport at [Penn], but an actor or actress or musician is, seems to be a complete miscarriage of justice,” Edelman said.

DiGisi echoed Edelman’s sentiment.

“When you think about the reasonableness [of NIL opportunities], you think [...] how could this have been prohibited for so long,” DiGisi said.

Furthermore, the schools in the Ivy League all have, arguably, comparably attractive attributes in the college recruiting process. They are all recognized as elite institutions with large endowments, and have proven to provide their students with immense academic and professional opportunities. 

Edelman believes that men’s basketball has served as a factor to differentiate Penn from the rest of the Ancient Eight. 

“If the University of Pennsylvania wants to be honest with itself, one of its biggest marketing tools over the past 30 years to recruit students away from other Ivy League colleges has been the popularity of its men’s basketball team, especially during the period in which Fran Dunphy was head coach,” Edelman said.

Because of this, Penn has profited from its athletes’ success and fame, to the extent that its athletes help to draw recruits and money to the school. Specifically, Penn men's and women's basketball combined to bring in $3,207,833 in revenue for the school during the 2018-2019 fiscal year. 

One argument in favor of NIL legislation is that it would help athletes earn money to fund their college educations, especially in instances where schools like Penn recruit low income students to play for their teams. 

“To the extent that state legislators want to get involved, they are not only helping to preserve fairness for college athletes, but at the same time, they are removing an impediment that disproportionately harms low-income and racial minority students, who help bring in great sums of money to certain universities through football and men’s basketball,” Edelman said. 

Federal NIL legislation would create uniformity across the country in the realm of recruiting, where states with NIL laws may currently have an advantage over other states.

DiGisi noted that the NCAA is considering other ramifications of NIL legislation. 

“The NCAA is particularly concerned about the fraud aspect of it,” DiGisi said. “They want to make sure that a student is being compensated for their notoriety or their promotional efforts. They don’t want someone to make one appearance at a car dealership and get paid $75,000 to do that, because that is really an NIL deal disguised as [a] payoff.” 

While the debate over NIL for college athletes has been a long and bitter one, pretty soon it won't be a debate any more.