Compensation In Collegiate Sports, A Big Win Or Loss For Brand Value?

 

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With the National Football League’s (NFL) current troubles with misbehaving players, the importance of protecting the brand is getting a lot of attention once again. The NFL, known for being on the cutting edge of everything to do with marketing, finds itself in an unenviable position when it comes to player conduct. The league is once again floundering, demonstrating some significant uncertainty when dealing with terrible player behaviors which threaten to damage the league and teams’ all-important brand value.

The NFL is not the only valuable sports marketing powerhouse experiencing challenges to their brand value. Those old enough may remember when college sports programs were little more than an extracurricular activity, where physically-gifted amateur athletes earned college tuition through scholarships. They may also remember when those programs began generating millions of dollars colleges and universities.

The Texas Longhorns, now reported to be worth in excess of $139 million, is at the top of college football’s most valuable brands. The top 20 university football programs brands have an average value of $85 million and earn in excess of $1.2 billion each year. Obviously, college sports are far from being an extracurricular activity any more. Once, many decades past, college sports programs were funded and supported primarily by the academic side of the higher learning equation and aided by some rabid, well-heeled alumni supporters. Today, many of our most famous schools of higher learning would be hard-pressed to survive without the riches generated by student athletes. So there is debate as to why such riches can be generated for the institutions, while the players are still forbidden to profit, over and above the tuition assisting scholarships, from their talents.

The college gridiron and hardwood courts have become little more than a training ground for aspiring players who have their sights set on lucrative careers in the NFL or the National Basketball Association. It may be one reason why student athletes, many whom will never graduate with a degree, are so willing to suffer through four years of hard, dangerous work-play without compensation for their generous talents. But just last month, a federal judge ruled that the NCAA’s decades-old rules barring payments to college athletes were in violation of antitrust laws.

The decision will permit universities to offer football players in the top 10 conferences and all Division I men’s basketball player’s trust, funds that can be tapped after graduation. The move will give amateur college athletes an opportunity share in the billions of dollars in television revenue they help generate for their colleges and the NCAA. Compensation will not only be paid for playing talents, but for the use of their images as well, both before and after their scholastic career.

How much each player will be paid and who among the thousands will be eligible to receive the compensation is still not clear. North Carolina (N.C.) State athletics director Debbie Yow, said, “So far it seems that everyone has the same questions, and we don’t have any answers yet.” Meanwhile, school administrators are consorting to determine where the money for the new financial assistance programs will come from, acting as if the millions presently being earned and shared with coaches and administrations are not sufficiently large enough to share with the players.

The new ruling could become the biggest shake-up in college sports history, causing much consternation in the university board rooms, administrative suites, and marketing departments on campuses all across the country. But with the popularity of college sports at an all-time high, the wrangling and hand- wringing is not likely to dampen the enthusiasm of the millions of fans in the stadiums and tail-gating parking lots. Unlike the player misbehavior and criminal activity which threatens professional and collegiate brands, compensating the players may just strengthen the collegiate brand’s value among the millions responsible for generating the pot of gold.

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