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NCAA Athletes Can Now Get Paid ft. WSJ Sports Reporter, Laine Higgins

Updated: Aug 2, 2021

Kriti: [00:00:00] Hey guys, welcome to WhyFI Matters. So over the week or so my TicTok has basically been hijacked to only show me videos relating to the Olympics. And honestly, I don't mind that. It's really great for me to keep updated with the games and what's going on. So. I'm sure many of you are keeping updated or even watching some of the sports.

And I love how the Olympics is every four years, because it really adds to the excitement and even hypes it up basically. And speaking of athletics, And sports today's episode is going to be more about college athletics, kind of part of a little series we're doing here. And it's specifically the fact that athletes in the NCAA can now be paid.

The NCAA is changing the rules. And this is extremely momentous because up until this point college athletes who, in my opinion, work as hard as professional athletes are even harder because they have to balance academics on top of their sports, they were not getting paid and. Able to get money through like deals and sponsorships and partnerships.

So this is pretty big, now the college athletes can be compensated. What exactly caused the NCAA to change after all this time, I'm super excited to speak to Laine Higgins, who's a sports reporter for the wall street journal, which pretty cool next week.

Next week however, make sure to stay too. Because we're actually going to talk more about the personal side of this whole change in the NCAA rules with a college gymnast. We're going to talk about her opinions and views about being able to finally make money as a result of her hard work and her athletics. This weekend interview is like a precursor to next weekend with our gymnast.

But yeah, I hope you enjoy today's interview. Yeah.

Hi Laine. Thank you so much for coming on WhyFi Matters today. I'm super excited to have you on the show and talk about the recent NCAA change and shift within college athletics. And I'm super excited to learn more about the future of this and why this even happen.

So thank you so much for coming on the podcast today.

Laine: [00:02:49] Yeah, thank you so much for having me. I really appreciate it.

Kriti: [00:02:52] So, can you, before we get into, um, what happened with the NCAA? Can we talk, can you tell us a little bit more about yourself and how you even got interested in sports journalism?

Laine: [00:03:05] Sure. I grew up in Minnesota and my father was a big Michigan football fan.

So, we grew up always watching games on Saturdays and I read sports illustrated growing up. I read the sports section of the Star Tribune and I had kind of had an interest in writing in high school. And I was on the newspaper there. But I didn't really put two and two together that I could do sports writing just because our newspaper came out once a month.

So it's not like we were really doing game stories. It was more of a, you know, here's how the season went for this team. Right. Um, and it wasn't until college. When I joined the newspaper there that I was able to actually start writing about sports and get a little more of an exposure to that. And once I did it, I really just kind of fell in love with it. Cause I, I joined the sports section, cause I was hoping it would be a way to meet athletes. I was a swimmer in college myself and I was like, oh great. I can make friends. Yeah. And then the first game that I ended up covering was the men's soccer team and they got absolutely whooped by Georgetown, nationally ranked at the time.

Yeah. So, you know, you're going up to them after the match saying, Hey, like, so tell me about that. You know, when they're upset and you know, a little bit sad. So it's like, you're maybe not going to make your best friends doing that. But it definitely was still something where it was really fun to be able to go to games and experience that. So I, throughout college, interned at several publications and knew that I wanted to do it after graduation. So, just worked my way towards that. And I had an internship at the wall street journal after I graduated. And , over the course of several months was able to turn that into a job there initially with the weekend business section. And I've now been with the sports section for little over two years, full-time.

Kriti: [00:04:53] So you did swimming, so you were a college athlete then?

Laine: [00:04:59] Yes, I was. Yeah. And granted I was a walk-on at a school, so I was not exactly a star athlete by any means, but I do sympathize with what a lot of these athletes are going through.

Cause I, swam all all four years as well. Yeah.

Kriti: [00:05:12] That's amazing. So I play tennis. So, great college athletics could be something in my future. I don't know exactly what I want to do yet in terms of that, but I love talking to fellow athletes. And like you said, when you were writing these articles, you could totally, probably sympathize and understand, what the athletes going through.

I didn't know that about you before, so that's really a problem. So I will actually be interviewing Leah Clapper in August, later on. So Leah clapper is someone who Laine, actually interviewed in her article about "It's payday for college athletes in the wall street journal". So I kind of wanted to focus more about more of his interview on the logistics surrounding this new era of collegiate athletics, where the states, not the NCAA can kind of call the shots as you wrote on athletes compensation.

So why had the NCAA not even allowed college athletes to get paid before? Like, I don't understand because they work so hard. It's a literal job.

Laine: [00:06:27] That's the funny thing is that pretty much, since the NCAA was fast in the early 19 hundreds, their whole model has been on amateurism and they have defined that as not accepting money or payment of any kind.

And that is the hard red line they draw between college sports and pro sports. And, over the year, College sports has also ballooned. So it, you know, at one point it was maybe more of an extracurricular in the same way that joining like a speech and debate team would have been. But in the last 20 some years, it's definitely become something different.

Kriti: [00:06:58] So big it's like, so such a huge part of American culture. It's crazy. Like nowhere else in the world. Is it like.

Laine: [00:07:05] And part of the reason why it changed is because in the 1980s, there was a Supreme court case that gave college, the ability to broadcast their games. Because before that, the NCAA controlled all of the football games that were televised.

It was very few that were televised on college. And then once schools could and conferences could start to gain control of that. It opened the door for these incredibly lucrative television contracts to be struck. And all of a sudden you had these conferences schools that were able to distribute, you know, 40 million to every school, every year.

And with that money, it just became this arms, race of coaches being paid, incredible salaries and incredibly nice facilities. And it also exacerbated this difference of amateurism because money was going to literally everyone except for the athletes and the athletes labor is what's creating this product.

Right. Yeah. So then that is kind of what drew a lot of criticism and the NCAA was very resistant to change its model because it was currently working for them because, you know, they weren't the athletes. And it wasn't until there was a series of litigation and more Supreme court cases that, that started to change.

And the first kind of chip away at it. The Ed O'Bannon versus NCAA case. He was a former basketball player at UCLA and he argued that in a college basketball video game made by EA sports. There was a player that looked just like him was wearing a UCLA Jersey, but. Yes. Exactly. Exactly. And EA sports and UCLA were getting money off it and he wasn't, he's like, come on, that's me.

Like, this is not fair. So that decision led to two things. One EA sports is college video games went away because they figured it'd just be too much of like a legal headache to deal with that. Um, it allowed for colleges to pay athletes a little bit above the cost of attendance. So they have their athletic scholarship and then they would get a stipend that would maybe pay for like room and board or textbooks or things like that.

And this most recent Supreme court case "NCAA versus Allston" allowed for the expansion of those benefits to include additional educational related things. So for instance, if a college athlete had time in the summer to take an interest. You know, maybe a college could say, Hey, we'll give you a $2,000 stipend to pay for your rent while you're interning into New York city for a summer.

Um, but to rewind a little bit of like why the states were the ones that were in the driver's seat with this, um, when this wealth disparity between the schools and athletes started to really become on display, a lot of state legislators stepped in and were like, this is not right. We should change something.

And they tried to work with the NCAA and said, Hey, would you consider changing your rules, like name, image, and likeness, which is just the ability to promote yourself as your own brand, separate from the school is not a right that college athletes, hat based, you signed something, you know, when you enter college that basically forgoes that. Um, or used to. And they said, this seems like a good first step where athletes. You know, make money off of their own personal brands. And the NCAA was resistant and California who has been very progressive on a lot of areas of state legislation, but particularly in athletes rights, went ahead and pass something in 2019. And they were the first state to do it, but they didn't have an effective date for their law until January 1st, 2023.

So it was purposefully a long time to give the NCAA time to write its own rules. It basically said, you know, time is ticking. You better get your act together. And the NCAA, you know, sort of was plodding along. They formed task forces and committees, which they are very good at doing and more states than passed these laws.

And then it kind of took another step forward when Florida passed a law, that said on July 1st 2021, our law is going to take effect. And that was last year. So then the NCAA is kind of in this crunch mode where it has essentially a year, at this point from last summer to have some sort of rule that goes into effect, because if your biggest fear is, if you have some states where athletes can make money and some states where they can't, the whole point of having a governing body, where you can have equal rules to make it a level playing field kind of goes away.

And, it gets a little bit of complicated, but the NCAA was targeting January for a long time to redo its roles. But then the department of justice was like, Hey, by the way, NCAA, we think that maybe your rules are a violation of antitrust rules. Like we think that you should maybe take a second and reconsider.

So that led to the NCAA, just like pushing this off until June of this year. So, literally less than a month before the Florida law. And now I think seven other states laws take effect and. During this time, the Supreme court also surprisingly announces it's going, we hear this Allston case and that one won't directly affect the name image and like this, but the ramification of Allston is that it would affect how the legal system would see the NCAAs, need for an antitrust exemption.

And in order for them to write sweeping rules about how much money out things could make with name, image, and like this, that basically means that they would need some sort of exemption that says, like, we can cap your earnings. Because, you know, if there is not some sort of exemption given to the NCAA, that basically is exactly against the Sherman antitrust act. It says that in a free market, you can't. You know how much someone can make arbitrarily, which is essentially what the court found the NCAA to be doing. So when that happened, the NCAA at the last minute scrapped all of the rules and it spent the last two years making, and this is I think June 21st or 23rd at this point, so, you know, less than a week. And, um, at this point, and, um, The NCAA said, all right, we're going to have an interim policy. And the interim policy is don't violate recruiting rules. So don't have boosters pay athletes directly. They maybe shouldn't use their school intellectual property when they're doing this.

And then everything else is just up to the individual universities. So it went from the nightmare scenario of having 50 different state roles to having potentially a thousand different rules for this because every university in a state. Exactly that every university can set their own policy. Um, the one caveat is that if you were in a state that already had a law on the books, then you have to follow your state law.

But if you were in a state like New York, for example, where I am, where there wasn't a state law yet, then that means that every university can just do whatever they want. And it basically creates this situation of chaos where it's not, I don't think that the rule making is done yet because the NCAA is still pushing for some sort of uniform, federal mandate.

And it's possible that the NCAA could come out with its own rules, but you know, Congress has got a lot on its plate and it always does. And they're not exactly fast moving with some of this stuff. It will be interesting to see how this does evolve, because we're certainly not done with roles changing yet, but the biggest hurdle and, you know, block that was preventing athletes were making money has now been removed.

It's kind of a long answer, but this has been a long, long time coming. So it's a, it's hard to get into the nitty gritty of this without going back, you know, honestly to the eighties.

Kriti: [00:14:20] What if the school is?

Laine: [00:14:21] Private? I believe that because state laws like, yes, they definitely affect public institutions because they're taking public money on to run them. But, a private school in a state is still subject to a state's laws. So they would have to follow those. And then I believe that say if I have, you know, Laine Higgins university in New York, and there's not a state law, I could set my own law in the same way where like a public school in New York would be setting it.

Kriti: [00:14:47] Okay. I see. Yeah. I didn't realize this was years in the making.

So, what is the NCAA? Um, what is, what are they going to do? How are they going to get the money to pay all these athletes? Like, where is that coming from?

Laine: [00:15:05] That's the thing is. With name, image, and likeness, the schools in the NCAA aren't paying athletes.

It's actually coming from basically them signing endorsement. So it's businesses and part of the reason why schools are pretty resistant to this is that, say you have like a donor pool of, I don't know, a hundred or 200 donors. They have a finite amount of money. And if they are really big supporters of the women's gymnastics team, maybe they really care about balance beam. So they're going to sign in, like if they own a sandwich shop, they're going to have the balance beam specialists be their spokesperson, and they're going to give their $5,000 that might've just gone to the athletic department before maybe earmarked for gymnastics, but for the athletic department, it might go to the athlete instead. It's hard to say if the total pool of money in college athletics will grow or shrink, but definitely it's way to flow in different directions.

Kriti: [00:16:00] Okay, and it's kind of like saying a basketball player is part of a team, but they aren't getting paid. Like say if I live in Chicago, so I'm going to use the bulls out there.

It does suck. But, um,

Laine: [00:16:15] just now at one point, yeah.

Kriti: [00:16:19] Um, so I'm playing for the bulls and the, so basically the bulls don't pay me anything. It would be like Nike or Adidas or whatever's endorsing you basically. That's what I'll get the money from.

Laine: [00:16:36] And that was a hugely important piece of this is that with name, image, and likeness, it does not establish these athletes as employees of the university.

So they're not owed a salary by their teams, by their schools. Something, that's also been a huge subject of debate and name, image, and likeness is seen as maybe a baby step towards that, because it does kind of break down some of the barriers for athletes receiving a salary or income of some kind. Um, and it is interesting because the NCAA is not asking Congress to change the status of athletes, but a lot of the senators and congressmen that are currently debating these have bills on the table that do include provisions that would give athletes additional rights and reclassify their status as an employee of the university.

Right. And it's unclear if that's going to make it through. My guess is it'll maybe get bargains down or weekend, because not everyone favor something that progressively. But by the NCAA not writing their own rules and waiting for Congress to do them. They kind of see, this is how they seeded some control is that if these rules that Congress enacts end up going to be, you know, far more sweeping and add more reform to college athletics than what the NCAA was planning well, too bad, they have to, they have to.

Kriti: [00:17:51] So, before this role was taken place, would it be like, say if I was a college athlete, but I also did YouTube on the side. So would I not even be allowed to make money off of my YouTube channel?

Laine: [00:18:04] Well, yes, I know. Basically the short answer is you would not. But the long answer is that the NCAA does have a waiver process, where for very special circumstances, you might be able to get a waiver and get permission to do it.

But, so say you were a basketball player and your YouTube channel was about dribbling skills, you definitely. Most likely to do that because it's based on your sport. But, if your YouTube channel was about like weaving friendship bracelets or something completely random, you could probably find a way to justify it.

And there have been a handful of athletes that have done that, but getting a waiver is also this long process that's very involved. So oftentimes the easiest thing is just to completely out of it.

Kriti: [00:18:45] And this is for only NCAA D1 athletes, correct?

Laine: [00:18:50] For all athletes.

Kriti: [00:18:52] Yeah. Okay. Because I know that in some schools, like D3 schools, there's still big, you know, they have fans and everything, you know?

Laine: [00:19:00] Yeah. In small towns. Yeah. And it's definitely. You don't have to be, you know, at Ohio state university or Alabama playing football to make money off of it. Really could be anyone depending on, you know, what you're willing to accept and what you're willing to do.

Kriti: [00:19:14] So, do you think that NIL "name image and likeness" policy is fair? Because I feel like it's a popularity contest. I just about who's the most charismatic or who can sell this better? Who can promote themselves better?

And obviously that's a skill itself, to be able to do those things and make connections, but I guess it's hard for me to sort of change my thinking of, I can't, I have to stop thinking about it as like a salary, like almost they're discriminating against the other players.

You know what I'm saying?

Laine: [00:19:46] Yeah. I mean, that's certainly an element of this is because there's no provision that says everyone's going to make the same amount of money. Um, there could be some deals where I am. This is actually something that's happened already at the University of Miami, where there's a donor that basically, every single person on the football team, I'm giving you $500 a month. That's regardless of how much playing time you get, how charismatic you are, et cetera.

But what's interesting about NIL, right? There might be an athlete. That's a complete bench warmer, but they are a total ham. Like they're just hilarious and they have a great personality, so brands might want to work with them more so then the starting quarterback, if he's shy, right? So like it, doesn't always jive a hundred percent right. With how good you are. So I think there is because of that, it is kind of a weird space. There's a lot of opportunity for a lot of different types of people.

And like say you come from a really small town. Like, they're really passionate about your sport and they really love following your journey. You might have more opportunities than someone that's from a big city where they're just like another person topically. Right? Exactly. So it's hard to say how exactly it will shake out. And I think it's kind of the people that want to hustle the most on this are going to benefit the most, um, You know, it's, it's hard to equate what's fair. I think having the opportunity in front of you is what is fair and you know, how much you take advantage of that is totally up to you.

Kriti: [00:21:13] So, the Supreme court's basic reasoning that the NCAA was being unlawful and prohibiting athletes were making money. Was that it violated anti-trust laws?

Laine: [00:21:26] Yeah. So it wasn't athletes making money. It was prohibiting, schools from providing additional educational related benefits. So it basically said the NCAA had capped the market for those benefits. And it should have been open to athletes because it was open to every other college student. And it basically one of the biggest things about it is it said the NCAA.

From this Supreme court case in the eighties had this antitrust exemption and that it was, and for a long time in court, you know, over decades, the NCAA has argued that people only watch college sports because college athletes are amateurs. Amateurs, by definition, it means that they're not getting paid. So if college athletes were getting paid, people wouldn't watch that doesn't matter. Exactly. And that's what all the justices said that

Kriti: [00:22:13] doesn't make any sense,

Laine: [00:22:15] but that's what they've argued for years and years and years. So it's, this was the first time in the highest court that, that defense has just completely fallen.

Kriti: [00:22:24] Yeah. I mean, it's good it did.

So a lot of people now are, I mean, they consider the NCAA to be on their heels. Could you give us a little bit more of an like context for why this is the case now?

Laine: [00:22:39] Yeah, it's mainly that the NCAA, you know, they have this like 500 page rule book. They're very good at dealing with minutia of competitions in terms of like how many seconds of pitcher should get between pitches or like during a mound visit or how much, how many practices and hours of things you can do before practice officially starts during the preseason.

So there's lots of minutia. And like championship administration that they're very good at administrating. But the bigger picture changes, they're very reluctant and slow moving on. And that's more what it means on their heels because when the states went forward and acted, and also when the Supreme court entered the fray with this, and when all of these athletes brought these lawsuits against the NCAA, they were right.

They were the ones that was pushing and the NCAA is just kind of reacting to all of these things and the NCAA had a chance January when they initially were going to put out their new roles. And also earlier in June, if they had wanted to, to ratify new rules before the state laws went into effect. But they didn't, and that's, they're kind of in this pickle where they're really not in control of how exactly the space has governed because policies can vary by state, by school itself.

Um, and that's kind of a situation that they got into because they didn't come out more forcefully ahead of this. If, I mean, even ahead of California in 2019 to say either don't do this, we're going to do it now. Or since then being like, okay, we're going to put in something in place before the effective date.

Kriti: [00:24:07] Do you see the NCAA? Do you ever think. Go away like, or do you think, do you think it's necessary in order to make college athletics? Because it does help, you know, navigate and organize everything.

Laine: [00:24:22] Right. I think that there will always be a need for some sort of rules making authority. In the same way that, you know, there is in professional sports and there is for global sports.

Like, you need someone to say you get three outs in an inning, like in order to make things fair. But I do think that maybe what we're moving towards is like another segmentation. So the NCAA didn't use to have divisions. And then as more colleges joined and the, you know, missions of those changed and grew more diverse, we got 3.

And even within the top division of sports and D1, there's two halves for football. There's, you know, championship series and bowl series. And then within the top one 30 schools and the bowl series, there's five conferences that are the power, five and five that are the group of five. Okay. Power five conferences also known as the autonomy five conferences are the ones that are the biggest schools and make the most money primarily from football, but also men's basketball. And, they have a lot more sway in terms of what the organization does just because they are responsible for fielding the teams that makes the NCAA a lot of money during the March madness tournament.

That is to say, what works well for Alabama and Clemson might not work well for the university of Cincinnati or like VCU. So there's plenty of schools that are, you know, still D1 have great sports programs, but they maybe are not making the same magnitude of revenue.

And that changes how they would view certain rule changes. Yeah. Things like that. So it trickles down all the way. And I think that maybe we could see some of the autonomy five schools either form a separate division. That's a little bit more siphoned off. Cause they already have a fair amount, more power than a group of five schools do.

And there's actually a college reform group called the Knight commission that is suggested as much and says that, you know, maybe there should be further splintering and the NCAA should no longer run football or sports as we know them. But again, there is a huge incentive for these schools to stay in the NCAA.

Um, because even though the athletic conferences and this other entity called the, um, college football playoffs, run football, which is the most lucrative sport. The NCAA runs March madness, and that tournament brings in a billion dollars a year and they've sent 60% of that back out to the schools. So that's a big payday and that's a big reason to stay involved with the NCAA.

And they also handle all the logistics for tournaments and gifts for every other sport. So. I think it would take something pretty sizable and pretty dramatic to totally get rid of the NCAA and get these schools to leave and start their own thing. And name, image, and likeness could be maybe a step that pushes them towards that.

But I think, based on the one week or so that we've had it so far, we're not there yet.

Thank you so much, Laine, for coming on the podcast today. This was really great. I didn't realize all of this was happening behind the scenes, but, um, you never know. Maybe when I got to college, a lot of different things will change.

Oh my gosh. It might be a totally different, completely different. Yeah. Yeah. I mean, even in just the two years that I've been covering college sports, they, this whole space has changed so much and it's been a really exciting time to be following it and writing about it just because it is so kind of all over the place. Yeah, you're right. Maybe you'll be able to call yourself an employee or whatever university have a salary and benefits.

Kriti: [00:27:51] That'd be cool! Um, yeah. Thank you so much lane for coming on the podcast. It was great to talk to you today.

Yeah, thanks so much for having me.

Laine: [00:28:00] I really appreciate it. So that's the

Kriti: [00:28:01] That is end of the interview and it was so much fun to speak to Laine and I definitely gained a lot of insight and I honestly feel a little bit smarter now that I know how the NCAA had operated, might potentially operate, uh, as we progress into the future.

Because, this information is very important, especially because there's just so many young athletes who need to understand their personal finances, become more financially literate, now that they have the potential and the ability to get paid, because of the NCAAs change in their rules. We're going to talk more about this sort of personal side of what happened in the NCAA with our athlete next weekend. So definitely stay tuned for that. Thanks for listening. And I can't wait to talk to you next time.

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