College Sponsorships in the Spotlight

College athletic departments and the NCAA are under pressure, and it’s not because of nail-biting games during March Madness.
Player compensation and the status of the student athlete is under scrutiny after the National Labor Relations Board approved the Northwestern University football team to form a union, effectively declaring scholarship players employees of the college. Though the university still plans to appeal the ruling, Northwestern players are planning a unionization vote for April 25.
The issues at play are complicated and could redefine how a college athlete is characterized.

“This can really turn the entire paradigm of student athletics upside down. We’re on track to see a possible future where students can have their own shoe contracts or endorsement deals,” said Matt Powell, an analyst at SportsOneSource. “Of course, that will run into conflict with team licensing and brand deals, but student athletes who want a piece of the endorsement puzzle and pay may be able to get it. It’s still too early to know what’s going to happen. The student union is going to have to clear a lot of hurdles.”

While brands such as Nike, Adidas and Under Armour often shell out big bucks to sponsor teams, college athletes are prohibited from accepting their own endorsement deals.

Robert McCormick, professor emeritus at Michigan State University College of Law, said the decision by the regional labor board was not surprising given the increased scrutiny on the NCAA, which brings in nearly a billion dollars a year. He said that should the students ever reach collective bargaining, it’s uncertain if they would pursue compensation or other issues that might jeopardize the team’s NCAA standing. But, he added, sponsorships and endorsement deals most likely are on the students’ minds.
“A restriction on sponsorship rights is a question of compensation, so if the union wanted to pursue that statute, it would be within their rights and the university would have to bargain with them about it. It doesn’t mean [Northwestern] has to agree, but they would be obligated to talk about the issues,” said McCormick.

The decision to unionize follows a February ruling by a federal judge allowing the Ed O’Bannon class-action antitrust lawsuit against the NCAA to proceed to trial. O’Bannon, a former UCLA basketball player, sued the NCAA for use of his name to promote a video game. The lawsuit aims to remove the restriction on players being paid for the use of their name and likeness.

While the NCAA isn’t directly associated with the Northwestern case, the organization’s chief legal officer, Donald Remy, released the following statement: “This union-backed attempt to turn student athletes into employees undermines the purpose of college: an education. Student athletes are not employees, and their participation in college sports is voluntary.”

Alan Cubbage, Northwestern’s VP of university relations, said in a statement, “Northwestern considers its students who participate in NCAA Division I sports, including those who receive athletic scholarships, to be students, first and foremost. We believe that participation in athletic events is part of the overall educational experience for those students, not a separate activity.”

But these issues aren’t going away anytime soon.

“The NCAA is under a tremendous amount of pressure,” said McCormick. “They’ve pushed to be more lucrative and commercial. In my view, it’s very hard for them to say this an amateur enterprise when there are billions of dollars floating around.”

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