The mission of Issues in Perspective is to provide thoughtful, historical and biblically-centered perspectives on current ethical and cultural issues.

The age of amateur sports at many American colleges and universities is apparently over.  Year 2024 is the last year where the College Football Playoffs will be played by amateur athletes. Next year they will all be pros. It is pretty clear that the NCAA has embraced some form of “pay for play” that enables schools to pay players for their athletic skills. Leonard Armato of Forbes magazine writes, “The NCAA is hoping that this will stave off the onslaught of legal challenges and be far more cost effective than if the student athletes were ruled employees and eligible to collectively bargain. However, no matter what the result there is no question that amateur sports at the collegiate level is a thing of the past. Welcome to the world of college pro sports and the last CFP game played by amateur student athletes.”

This profound change in college football is a result of an important 2015 court case, O’Bannon v. NCAA. The case was a landmark lawsuit where former UCLA basketball player Ed O’Bannon sued the NCAA, arguing that the organization violated antitrust laws by prohibiting college athletes from profiting off the commercial use of their names, images, and likenesses (NIL), essentially preventing them from being compensated for their likeness used in video games and broadcasts, despite the NCAA making money from these uses.  The case ultimately led to a ruling that the NCAA’s rules restricting athlete compensation were partially unlawful, paving the way for changes in how college athletes can utilize their NILs.

As a result of O’Bannon, a number of other class-action lawsuits filed by student athletes against the NCAA and colleges followed, challenging other restrictions on educational funds as being anti-competitive. These were combined into a single suit, which ruled against the NCAA in March 2019 and required the NCAA to allow students to obtain other non-cash scholarships, internships and other support beyond the full cost of attendance for academic purposes. Some of these benefits include private tutoring, advanced class selection and access to exclusive college benefits. The court worried that allowing college athletes to profit off their name and likeness would allow large schools with large fanbases to offer more money to players.

The US Ninth Circuit Court of Appeals upheld the ruling on appeal, which the Supreme Court affirmed in a unanimous decision in June 2021 in National Collegiate Athletic Association v. Alston.  “That ruling opened up a can of worms.”  Thus, on 1 July 2021, the NCAA announced that the board had agreed to new rules that removed restrictions on college athletes from entering paid endorsements and other sponsorship deals, and from using agents to manage their publicity.

Armato summarizes other major changes in how college football and other sports are changing:

“Immediately, boosters of universities formed Collectives designed to lure athletes to their favored schools with promises of NIL deals. At last count there were 140 such collectives established by NCAA college programs hoping to entice student athletes to their programs. These Collectives had to perform a delicate dance since the NCAA still prohibited schools from offering “pay for play” incentives for a student athlete to attend their schools. The work around was that Collectives often formed a tax exempt charitable organization and made it publicly known that certain athletes attending the school would be given NIL deals in return for engaging in certain charitable activities.”  The fine line between permissible NIL deals and “pay for play” promises that are prohibited by the NCAA have been all but eliminated.

Mitch Daniels, former governor of Indiana and president of Purdue University, summarizes the triumph of pay for play in college athletics:  “The College Football Playoff National Championship game on Monday, with Ohio State beating Notre Dame, 34-23, concluded a season in which the sport of Knute Rockne and Bear Bryant completed its metamorphosis into a top-to-bottom, money-driven commercial enterprise. By court order, players can now be paid salaries, and they are free beyond that to rake in as much money in name, image and likeness (NIL) payments as a jillionaire booster or a shoe company offers them.  The new league is even more athlete-friendly than its NFL parent; players are free agents every year, and thousands of them use the ‘portal’ to jump from school to school in search of a bigger payday. In the NCAA’s highest division, more than 3,700 players changed teams in 2024.”

Daniels poses these relevant questions:  “Whether one likes it or not, the revolution, which has been gaining force over the past half-dozen years, is based on seemingly inarguable premises. Shouldn’t an 18-year-old athlete have the same right to profit from his skill or fame as his musician classmate? Shouldn’t the performers drawing millions of customers to stadiums and TV channels share in the enormous proceeds? Hard to disagree.”  But, with players’ average salaries in the tens of thousands, star players’ and coaches’ salaries often in the millions, and television contracts in the billions, this is plainly a business and not an amateur activity we’re talking about.  And, even as revenue has burgeoned into the billions—$3.55 billion in 2023 for the NCAA “Power Five” conferences alone—schools don’t pay taxes on that money, relying on the time-honored exemption offered because these activities further their educational purpose. “That exemption no longer matches reality.”

Finally, Mitch Daniels summarizes the profound way in which college athletic programs are morphing into professional athletic programs:

• Stanford and other schools are appointing “general managers” of their football programs. The most famous professional football coach of recent years just took a college coaching job. In hiring Bill Belichick, the University of North Carolina was described by the Wall Street Journal as “finally willing to up its investment and professionalize its football program.” Sensing business opportunity and a need for massive new investments, “private equity firms are beginning to sniff around for ways to enter the sector, as they have with a number of professional leagues and teams.”
• Competing at the highest level now requires massive fundraising, to outbid others for the talents of star players. Ohio State stunned the sports world when its football coach said he needed $13 million simply to maintain its roster, and the program was rumored to have ultimately spent $20 million. “Now they’re national champions.”
• But Ohio State is not an outlier; NCAA figures show that at least 20 schools raised $10 million or more through their so-called collectives in the past year. These entities are sometimes presented as a way to help charities, but, as one athletic director was candid enough (anonymously) to admit, “Let’s be honest, we are all money laundering.”  “Twenty million dollars is now just table stakes, and it isn’t one-time money. It will have to be raised every year if a program wants to keep up. It cannot possibly all be incremental to the money schools raise for genuine academic purposes; inevitably, it will cannibalize funds that could have been raised for tuition support, or a new chemistry lab.”
• Nonprofits collecting revenue not contributing directly to their mission are supposed to declare it “unrelated income” and pay taxes on it. How long will colleges be able to maintain the fiction that their sponsorship of professional football is for the purpose of advancing education?  The argument that athletic success boosts either enrollment or other, nonathletic fundraising has never been persuasively demonstrated, and it was refuted in a 2019 study of the topic.  Here is the abstract from that study:

Abstract: For the 65 colleges and universities that participate in the Power Five athletic conferences (Pac 12, Big 10, SEC, ACC, and Big 12), the football and men’s basketball teams are highly visible. While these programs generate tens of millions of dollars in revenue annually, very few of them turn an operating “profit.” Their existence is thus justified by the claim that athletic success leads to ancillary benefits for the academic institution, in terms of both quantity (e.g., more applications, donations, and state funding) and quality (e.g., stronger applicants, lower acceptance rates, higher yields). Previous studies provide only weak support for some of these claims. Using data from 2006–2016 and a multiple regression model with corrections for multiple testing, we find that while a successful football program is associated with more applicants, there is no effect on the composition of the student body or (with a few caveats) funding for the school through donations or state appropriations.

Mitch Daniels laments that “A few years ago, in a presidents-only Big Ten meeting, I floated the idea that we all commit some percentage of the money from an impending new TV contract to academic purposes. Every head nodded, but it quickly became clear that most were terrified to take such an idea back to their boards or athletic departments. The absurd notion was never heard of again.  The new professional league is a fact of life and already a tremendous success. But the lucky schools at this trough can’t have it both ways. They have entered a business, one that is not merely ‘unrelated’ to the purpose of educating young people but to an extent in direct competition with it. It was fair that they share some of the proceeds with the participants; they should also share some with their taxpaying fans.”

With online educational opportunities exploding, with the AI phenomenon fundamentally changing almost everything, and with declining enrollment realities, higher education is fundamentally changing—and to some extent in crisis.  Residential, four-year college programs are not thriving, to say the least.  In fact, smaller colleges and universities are closing—both public and private.  Today, basic baccalaureate programs in America are increasingly starved for cash, while college athletic programs are flush with cash from advertising and sponsors for athletic equipment. And their athletes are in effect professional athletes making huge salaries.  Given these realties, it is hard to be optimistic about the state of much of American higher education.

See Mitch Daniels, “College football has turned pro,” in the Washington Post (25 January 2025);  “The Impact of College Athletic Success on Donations and Applicant Quality” by  Benjamin Baumer  and Andrew Zimbalist , Program in Statistical and Data Sciences, Smith College, Northampton, MA 01063, Published, 1 April 2019; Leonard Armato, “College Football Will Have Pro Not Student Athletes Next Year” in Forbes (11 January 2024).