While the appeals court's decision "is of immense relevance to the student-athletes whose effort and sacrifice fuel the multibillion-dollar enterprise that is N.C.A.A. Division I football and basketball," according to the brief, it does not allow players to be paid in full. The plaintiffs had argued that doing so would undermine the market for college sports by removing one of its most important attractions: the chance to make money.
The court ruled that even if paying players was allowed under state law, it would still violate federal law because doing so would create an incentive for students to attend classes only when they have a game or tournament to play in. The court noted that many college athletes spend several months each year training and preparing for their sport and that some are required to do so without any payment. If players were able to be paid, the court said this would provide an incentive for them to study less than 40 hours per week, which would be inconsistent with their universities' requirements that they maintain certain grades or face expulsion.
In addition to the plaintiffs' main argument, they also claimed that allowing payments would not harm the market for college sports because other countries do so without issue. However, the court pointed out that the fact that other countries may choose to pay their athletes does not mean that America must follow suit.
Most collegiate sports programs in the United States do not produce any money, therefore most athletes would continue to be underpaid. Furthermore, the players would require a strong union to negotiate any revenue-sharing arrangement.
However, some schools have begun to shift their model to include annual payments to their athletes. These can take the form of cash bonuses or prize money and many schools are doing so for the same reason: to attract and retain elite talent.
Some universities have started to give out checks for winning the national championship. For example, the University of Georgia gave its football players $25,000 each after it beat Clemson to win the 2019 title. Oklahoma also did this and added a check for $100,000 to its roster of awards. Other schools including North Carolina, Ohio State, and Texas A&M have given out smaller checks but no less than $100,000.
The total amount of money that these programs are giving out annually is growing larger. For example, UGA's award total was second only to Florida State's ($125,800) in 2019. This trend will likely continue as more schools follow suit.
In addition to bonus checks, many athletes are being offered partial scholarships with the understanding that they will be awarded at the end of each season based on how they perform.
For many years, the NCAA has forbidden players from receiving any outside money. Division 1 athletes will have no major constraints on how they may be reimbursed for their NIL as of Thursday. Athletes might be banned or lost eligibility in the past if they broke the rules.
The new policy allows players to accept endorsements while still attending school. It also allows them to receive payments for autographs and photographs. Such gifts are considered "honorariums" and are not considered income.
Under the new policy, schools will be required to report all honoraria received by students to the Internal Revenue Service on a form that will be made available online later this year. The amount reported will be included in student aid packages; therefore, colleges cannot claim these amounts as additional expenses.
Athletes can receive up to $5,000 per year from sponsors without affecting their ability to play sports. If an athlete receives more than $5,000 in sponsorship deals in a year, he or she would be required to reduce their studies or training time to less than 10 percent of total hours spent playing sports.
Beginning with the class of 2021, every player will be given a monthly stipend that will cover living expenses while they're not playing basketball or football. The amount will be based on the salary of the highest-paid player at each school.
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