As Legislation Changes, Universities and Athletes Must Prepare for New Financial Responsibility
Over the past decade controversy surrounding college athletes and their rights to earn money has grown, pushing forward legislation, and creating new stress for student-athletes.
The tide began to shift in 2009 when former student-athlete Ed O’Bannon sued the NCAA, on behalf of Division 1 athletes, over the name, image and likeness rights of athletes featured in an NCAA licensed video game. Since this lawsuit, the conversation concerning NCAA players’ rights to profit off of their celebrity status has opened up, and recently, state and federal legislation has been introduced to diminish the NCAA’s power over their student-athletes.
Previously, NCAA athletes were unable to profit off of their name, image and likeness until they graduated from college. Now with federal legislation introduced such as the College Athlete Economic Freedom Act, and other states signing bills into law, the path to the money is looking clear for college athletes.
What still remains unclear is how these athletes will learn to manage the money that they will be making at such a young age. While these athletes may be at top universities across the nation, most universities are unable to prepare them to manage their finances. In a 2019 Everfi Survey only 53% of college students stated that they were ready to self-manage their finances after graduation. This was already an issue for athletes who began earning money post-grad, but now with new laws, athletes will be able to earn money during their freshman year, when most are just 18 years-old. This new level of financial freedom will benefit athletes, but only those who can properly manage their money.
There have been countless stories of those who have come upon big money but were not able to manage it correctly. Raghib “Rocket” Ismail, Notre Dame wide receiver and presumptive #1 pick in the 1998 NFL draft, instead chose to sign an $18 million guaranteed contract in the Canadian Football League. He followed the money but did not know how to manage it. Years later at age 39, Ismail was sat in a boardroom discussing his bankruptcy options. Ismail is not alone, as after 2 years of retirement 78% of former NFL players are experiencing financial stress due to bankruptcy, divorce, or joblessness.
Not only will this issue affect the top-tier athletes, but athletes at every level of college sports, due to the new social media landscape. With the advent of Tiktok and other forms of social media, almost anyone can become famous and earn sponsorship deals, not just the top college athletes. Take University of Michigan basketball player Adrien Nunez who, despite meager playing time, has built a following of 1.4 million on Tiktok. Nunez and others can now profit off of celebrity gained not from athletic skill alone, but also creative content.
Name, Image, and Likeness legislation will benefit the athletes that are ready to self-manage their money, but could spell disaster for the unprepared. It is up to universities to ensure that their athletes can manage their finances, but they need help.