College sports in the USA: From amateur to employee

When one of the most successful football coaches in the United States retired at the beginning of the year, the decision came out of nowhere. Most Americans his age – 72 – are long retired. But Nick Saban, who had won the national college championship six times in his seventeen years at the University of Alabama with a constantly changing squad of young players between the ages of 18 and 22, never gave the impression of being a big shot on the verge of retirement.

Otherwise, he would hardly have signed a contract in 2022 that ran until 2029 and reportedly contained a clause guaranteeing that no college football coach in the USA would earn more than him. According to the business magazine Forbes, this meant that Saban earned more than 125 million dollars (around 115 million euros) in Alabama over time. This was supplemented by well-paid advertising contracts.

Why was he no longer interested in the position? He revealed this a few weeks ago at a hearing in the Washington Senate: “Everything I believed in over all those years as a coach no longer exists in college sports. It was about developing players, about helping people to be more successful in life.”

Amazing unreflective lament

Saban was faced with a new generation of talent that thinks differently. Their only concern was obviously how much money they could earn in college with their skills. And they were primarily basing their decision on this factor – in a very market-conscious way – as to which university and coach they would sign with.

For someone who earned twice as much in salary as all 85 scholarship players on his football team received in financial support each year at Alabama, the lament sounded surprisingly unreflective. But the greats of the country’s most popular team sport have never been happy when the status quo is challenged.

For a long time, the football establishment was the strongest opponent of equal treatment of girls and women in schools and universities, as introduced by law half a century ago. There were fears that resources would be redistributed in favour of female students, who had been largely ignored until then.

In the future, college players will also be paid.AP

Saban must have already suspected at the turn of the year what was in store for him as a coach. Last week, the National Collegiate Athletic Association (NCAA), the traditional umbrella organization that organizes national championship competitions in college sports, and five of the most influential and highest-revenue leagues – called conferences – agreed on a concept that had long been contested: students who represent the universities as athletes will receive a salary from 2025 onwards.

They will no longer be seen as traditional students, but as employees who will be paid in line with the market. The “turning point” and “new era,” as the New York Times described the news, was made possible because the NCAA was increasingly concerned that it could lose a class action lawsuit with massive claims for damages based on American competition law.

Old structures

The only way out: a solution like the one the professional leagues found a while ago, including players’ unions and collective bargaining agreements, to remove the reputation of the hundred-year-old system of college sports as an exploitative business idea with a straitjacket character for the players. The money is there.

According to statistics from 2019, this segment of American sport generates more than 15 billion dollars nationwide through television rights, stadiums with a capacity of up to 100,000 spectators and fan merchandise. Regardless of this, the image of the so-called student athlete, who as an amateur puts his skin on the line solely for the cause and honor of the university, was cultivated and romanticized until the very end.

The old structures stood like a bulwark until a recent landmark decision by the Supreme Court in the dispute over the personal rights of students paved the way for them to market themselves. Since then, more than a billion dollars (around 920 million euros) per year have landed directly in the pockets of athletes.

Be it women like gymnast Olivia Dunne or men like basketball player LeBron James Jr., the eldest son of the NBA star of the same name, who wants to join the pros next season. Their level of fame and the associated advertising value can be seen in the number of their followers on social media. Dunne reaches more than five million people on Instagram alone. James, nicknamed “Bronny”, even has more than seven million.

The out-of-court settlement for damages totaling $2.8 billion (€2.6 billion) will end the ongoing civil dispute if the responsible judge approves the arrangement. It describes a method by which the money is to be distributed through the universities belonging to the conferences in question.

Only 22 percent of total revenue

There is talk of 20 million dollars (18.4 million euros) per college. Some other things are still unclear. This not only affects the distribution of the compensation to students in esoteric sports such as lacrosse or water polo, golf or tennis, all of which can only exist because the football and basketball teams attract attention as pullers and popular figures. But above all, it also affects the employment law structuring of the relationship between the universities and the athletes who compete for them.

It is also unclear how the other, mostly smaller 22 conferences and their member universities will deal with the demand from the big companies that they should contribute 990 million dollars (830 million euros) to the pot. And this despite the fact that some of them called off the hunt for sporting glory years ago. Robin Harris, CEO of the Ivy League, which includes America’s most prestigious and oldest universities Harvard, Yale, Columbia and Princeton, could not hide his anger. Although no one is dragging them to court, they are now expected to bear the costs of those who have been sued. “It’s frustrating.”

There is also unrest among athletes who would benefit from the development. The compensation for the services of college athletes aims to pay out 22 percent of total revenue. This figure is far below what is now common in professional leagues, where around 50 percent of revenue goes to the players.


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