What’s an NIL collective? What is revenue sharing? And why should I care?
The past few years have created a whirlwind with legitimate uncertainty on the future relationship between athletes, schools, conferences and the NCAA.
In a major development of this issue, the Dartmouth College men’s basketball team officially voted to unionize March 5, joining the university’s Service Employees Institutional Union Local 560 by a 13-2 vote.
A week later, a regional office of the National Labor Relations Board (NLRB) officially certified the union. Dartmouth plans to appeal the decision and is currently refusing to collectively bargain with the players — but if the NLRB denies the appeal, players could launch bargaining sessions for a salary with working hours and healthcare benefits.
So what does this all mean, and how does it fit into the broader context of compensation in college athletics?
The details of the ruling
The central claim from the NLRB is that universities control the basketball team’s work and that the athletes’ work is in exchange for compensation. Therefore, the players are statutory employees, “regardless of whether their employer is an educational institution or they are also students while employed,” per Laura Sacks, the NLRB’s Regional Director.
Dartmouth attorney Joe McConnell rejected this argument, claiming that “students’ primary objective is learning,” and the university’s policies reflect that student-athletes are “students first and athletes second.”
A likely reason the school is against this ruling is because Dartmouth’s athletic department does not make as much as those in the power conferences. NCAA President Charlie Baker proposed a new “D-I Subdivision” in December 2023 that enables only schools with the most profitable athletic departments to pay their players through a trust fund.
Baker also warned that with the possibility of unionization, 95% of college athletes could jeopardize their ability to play because many schools just don't have the consistent revenue streams to play their players. For example, the Duke men’s basketball team alone earned more than $33 million in 2020, but some entire athletic department budgets are less than $50 million.
Various student-athletes across the country want to be considered employees, stating that they are working akin to employees in both hours and commitment. Others worry about the implications of employee status, wondering if they could technically be fired for poor performance.
This question has many implications for college athletics and the timely issue of revenue sharing. The landscape of college athletics can be difficult to navigate, especially in understanding the current litigation and different proposed revenue models.
NIL vs. revenue sharing
College athletes have used two routes to try and push back on the NCAA’s claim that they are amateur student-athletes with sufficient scholarships. One is name, image and likeness (NIL) and the other is revenue sharing. Both are trying to accomplish the same goal of providing more compensation for college athletes, but through different paths.
NIL became the primary method for college athletes to profit off their talent after the NCAA legalized the practice in 2021. The majority of these payments come from collectives, which are frequently alumni-run and funded by key donors. Collectives work to sign deals and make athletes money from a variety of activities, ranging from autograph signings to commercials and social media appearances.
For example, Duke football’s collective, the Durham Devils Club, compiles multiple partner organizations in the Durham area to pool money for student-athletes. Notably, collectives are not directly part of a university or their athletic departments but play a significant role in advocating for the school’s sports teams.
However, most NIL funds generally only go to top players in the country. Dartmouth’s case is one step into the realm of revenue sharing.
Revenue sharing is money that comes directly from the university’s athletic department profits, rather than from outside donors like NIL collectives. If considered direct employees of the university, athletes’ salaries would come from revenue generated by things like TV deals and ticket sales.
As the dominoes continue to fall for revenue sharing in some form between institutions and players, the idea of pay-for-play could fundamentally change college athletics as we know it.
The NCAA’s legal troubles
Outside of the Dartmouth case, the NCAA is facing increasing legal challenges especially with antitrust cases. For instance, former Duke football captain DeWayne Carter is a plaintiff in a case in Northern California, where he and fellow athletes are trying to prohibit the NCAA from regulating player compensation.
The NCAA’s powers were further reduced Feb. 23 as a federal judge banned the association from regulating NIL collectives’ actions with college recruits. Now, prospective student-athletes are better able to assess their true market value by negotiating NIL contracts before officially enrolling in a university. In addition, collectives have the legal power to entice recruits with monetary packages.
In response to this ruling, North Carolina Gov. Roy Cooper recently rescinded some 2021 regulations around NIL to help the state’s universities remain competitive in this new world of college athletics.
Baker has called for federal legislation to help protect his organization from antitrust litigation and to reform college sports as a whole. Currently, Congress is working on a draft bill to rein in NIL by requiring transparency with deals and forming a non-governmental board to supervise the process.
Next steps in union cases
The appeal process by Dartmouth to the NLRB will likely take a long time. The university’s lawyers could continue to echo the NCAA’s rhetoric that college athletes are amateurs and student-athletes — “student” being the operative word. Congress is also currently debating the implications of players in unions and as employees.
“The increased costs of unionization and administrative headaches would threaten to make low-funded programs economically unviable … resulting in fewer teams, fewer scholarships, and fewer opportunities for young people,” said Utah Republican Rep. Burgess Owens at a March 12 congressional hearing regarding employee status.
On the flip side, other representatives argue that it is only fair to enact change now because college sports is an increasingly profitable industry.
“Unionization or the opportunity for unionization is not the end but the beginning for an equitable system and treatment for people who frequently get the short end of the stick especially in a multi-billion industry,” said Rep. Mark DeSaulnier, a Democrat from California.
Only private universities would be affected if the Dartmouth case is upheld. This would include some power conference teams, including Duke, but there is another key distinction: Dartmouth is part of the Ivy League, which does not offer athletic scholarships, potentially limiting the precedent.
However, the case that could truly be monumental for all universities is out West, where the University of Southern California is challenging both the Pac-12 and the NCAA. The case, which is still undergoing trial, is regarding a similar issue to Dartmouth’s about whether to treat college athletes as employees or student-athletes.
Even though the NLRB only deals with private institutions, it could rule that the NCAA and the Pac-12, which are both private entities, are also employers of student-athletes from public universities. This means that players from public schools, as well as private, could be given employee status with collective bargaining powers.
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Ranjan Jindal is a Trinity junior and sports editor of The Chronicle's 120th volume.