The issue of compensation for college athletes is a minefield that President Trump has decided to run straight through.
In recent years, university sports has already gone through major changes from litigation and the world of name, image and likeness (NIL) deals, but the president has signaled he wants to reshape the already fragile system.
His most recent action on the subject was an executive order that, though it has little legal force, could drive the conversation going forward. In the order, which boldly proclaims it “saves college sports,” Trump seeks to ban “pay-for-play” deals with third parties, as well as calling on schools to dedicate scholarships and money to women’s and Olympic sports.
Trump also wants the secretary of labor and the National Labor Relations Board to clarify the employment status of student athletes and the attorney general and Federal Trade Commission to examine relevant antitrust laws.
“It’s very clear that President Trump is very interested in the sports issues, and it’s very clear that he has inserted himself into this debate, and that’s really the background of that executive order,” said Mark Conrad, director of the Sports Business Concentration and a professor of law and ethics at Fordham University’s Gabelli School of Business.
Currently, student athletes have snagged multiple wins for revenue streams, particularly through endorsements and pay-for-play to participate at a specific school.
In his order, Trump targeted third-party pay-for-play, when an outside entity tries to pay an athlete for their sports participation, sometimes disguising it as an endorsement.
Arch Manning, the quarterback for the Texas Longhorns, has the highest current NIL evaluation of any college athlete at $6.5 million, earning money from partnerships with companies including as Uber and Red Bull.
Students saw a major victory in June after a landmark anti-trust ruling known as the House settlement said universities will be allowed to directly pay their athletes, with an annual cap of $20 million per school.
But all of these wins have been controversial, Conrad notes, with critics unhappy about pay-to-play and new rules that allow players to transfer between colleges without a penalty in play time.
The dissatisfaction has led to fresh lawsuits against the House settlement.
“Basically, to sum this whole thing up, is that we’re in a still in a period of uncertainty, and we probably will remain in the period of some uncertainty until” there is national legislation, sport conferences create their own rules or players unionize, Conrad said.
Advocates have begun to fear a small number of well-compensated students could jeopardize other sports.
“Waves of recent litigation against collegiate athletics governing rules have eliminated limits on athlete compensation, pay-for-play recruiting inducements, and transfers between universities, unleashing a sea change that threatens the viability of college sports,” Trump’s executive order reads.
“While changes providing some increased benefits and flexibility to student-athletes were overdue and should be maintained, the inability to maintain reasonable rules and guardrails is a mortal threat to most college sports,” it added.
Many of the sports that feed into the Olympics, such as swimming, track and gymnastics, do not generate nearly the revenue brought in by NCAA football or basketball.
“It’s a concern that’s compounded by the fact that we don’t really know yet how Title IX is going to be interpreted in connection with the payments permitted under the House settlement. So, right now, there is this concern that schools are going to start cutting programs to make up their budget shortfalls,” said Callan Stein, a lawyer who advises higher education clients in the area of college athletics for Troutman Pepper Locke.
While the executive order does not have the backing of law, Trump threatened the loss of federal funding over the issue. And it wouldn’t be the first time he has withheld federal money from universities for sports-related issues after previously hitting institutions over transgender athletes in women’s sports.
But legislation with Trump’s backing could have a far greater impact.
“Given President Trump’s leadership over the party, over the entire Republican Party, which is the majority in Congress right now, it seems unlikely to me that any law or bill would progress through either chamber, really, if it wasn’t consistent with the policy, the policies that are stated in this executive order,” said Stein.
The legislation on the issue currently working its way through Congress is the SCORE Act, which has many of the same characteristics as Trump’s executive order.
The SCORE Act would give some antitrust protection to the NCAA, among other things, but is unpopular among Democrats due to concerns college athletes will not be compensated fairly, meaning it would be difficult to overcome a Senate filibuster to pass it.
“If SCORE becomes law, there will be practical implications. It won’t go back to the pre-2000 era, but it will certainly go back. You’re not going to see this movement to treat students as employees,” along with creating stability for schools, Conrad said.
“It will certainly help the NCAA. It’ll help, arguably, stabilize the system, but not necessarily in the best interest of many students,” he added.
And there may even be colleges rich and powerful enough to feel like they no longer need to be part of the NCAA or beholden to its rules.
“If we’re talking about just law that relates to the NCAA, remember, the NCAA is just an organization. Schools don’t have to be part of the NCAA. There’s long been concerns that the big money schools don’t need the NCAA anymore, and could just form their own entity and do their own thing, and at a certain point, if the money’s enough, why would they, and if you start passing laws to restrict how they operate in the framework of the NCAA, why wouldn’t they just say, ‘Bye, bye, NCAA,’” said Michael Lowe, an attorney in the higher education and NIL space for Troutman Pepper Locke.
