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Impact of the NCAA Division I Power 5 Autonomy Governance Model on Student-Athletes

The National College Athletic Association (NCAA) Division I Board of Directors recently adopted a new governance model giving the “Power 5” college athletics conferences (the ACC, Big 12, Big Ten, Pac-12 and SEC) autonomy to create their own rules regarding important student-athlete issues. The governance process for the 65 schools within the Power 5 will include three student-athlete representatives from each conference, who will first time vote on rule changes within those conferences.

The Power 5 will have authority to regulate the following student-athlete issues:

• a cost of attendance stipend (which could be worth between $2,000 and $5,000 per player),
• insurance benefits for players,
• staff sizes,
• recruiting rules,
• loosened restrictions involving contact between players and agents,
• pursuit of outside paid career opportunities,
• covering expenses for players’ families to attend post season games, and
• mandatory hours spent on individual sports.

The Power 5 will not have autonomy regarding transfer eligibility rules, enforcement and scholarship limits. All of these will remain under the control of a new body composed of all Division I schools called the Council that will take action through weighted voting. The Council will consist of 32 conference representatives (mostly athletic directors), four conference commissioners, two athletes and two faculty members.

This newfound autonomy will significantly change the landscape of college athletics among Power 5 institutions. Players and recruits will now have the opportunity to receive a form of compensation outside of scholarships in exchange for their service to these programs. One possible benefit of this autonomy is that players will be encouraged to complete their college courses and obtain their degrees. Currently, many players struggle with the decision of whether to return for their fourth year of eligibility and risk a potentially career-ending injury or make the move into professional sports. Under the new governance rules, athletic programs could now offer insurance coverage, which provides at least some form of compensation to players, who suffer injuries preventing a professional career.

In addition, loosened restrictions on contact between players and agents will create opportunities for athletes to seek third-party representation, while still involved in college athletics in preparation in preparation for their professional athletic careers.

It remains to be seen how the Power 5 will address authorizing compensation of student-athletes for a share of the revenue earned by the sale of licenses to use student-athletes’ names, images, and likenesses, an issue which was raised in an antitrust class action suit by current and former student-athletes. In O’Bannon v. National Collegiate Athletic Association¹ , the United States District Court in the Northern District of California held that the “NCAA violates antitrust law by agreeing with its member schools to restrain their ability to compensate Division I men’s basketball and FBS football players any more than the current association rules allow.” The court advised the NCAA to address other criticisms regarding the NCAA’s practices to be addressed as a policy matter by reforms to the existing rules. In reaching its holding, the court determined possible reforms could include using the licensing revenue generated from the use of their student-athletes’ names, images, and likeness to fund stipends covering the cost of attendance for those student-athletes or to hold limited and equal shares of that licensing revenue in trust for the student-athletes until they leave school.²

Similar questions relating to current NCAA restrictions on student-athlete compensation for autographs are also implicated by the new Power 5 autonomy and the O’Bannon ruling. Over the past 5 years, a number of student-athletes have been rumored to have received compensation for autograph signatures. Most recently, University of Georgia running back Todd Gurley was given a four game suspension by the NCAA following their determination that he received money for autographs in violation of NCAA rules. With the newfound Power 5 autonomy may come the opportunity to change these restrictions and open the door for student-athletes to profit from their likeness, whether in the form of television royalties or through autograph memorabilia sales.

The next year is an exciting time for all current and future Division I student-athletes. These changes will be transformative. Monitoring this legislation is important for any current and future student-athletes who may be subject to the rules.

For information regarding the NCAA Governance Model and compliance with NCAA rules, please contact Kristin Melton at kmelton@dgfirm.com.

¹ O’Bannon v. National Collegiate Athletic Association, 2014 WL 3899815 (N.D. Ca. 2014)
² Id. at 34-36.