Since 2021, college athletes have been able to profit off their name, image and likeness (NIL) through brand deals and endorsements. However, starting July 1, 2025, due to a legal settlement with the NCAA, athletes will be able to be paid directly through their universities. This brings up a lot of new questions about the business of college sports.
In this episode, George Headley speaks with journalist Laine Higgins about the future of college sports as she sees it. Higgins has been covering the NIL era of college sports for the Wall Street Journal for the past few years and has closely watched the myriad of changes in real time. Here is what she has to say about her experience and what other reporters can expect to see moving forward.
Transcript
George Headley: Welcome to “We Mean Business.” This is “Drive to Work with George Headley.” In this series, I talk to people about what drives them to work on highlighting the issues they believe are important. College sports are changing, or more specifically, how its athletes profit. Since 2021, college athletes have been able to use their name, image and likeness (NIL) to profit off of brand deals and boosters, who are alumni or individuals involved with a university’s athletics program through donations or endorsements. However, starting July 1, 2025, NIL deals between boosters and athletes are now going directly through universities, per NCAA after a legal settlement. Additionally, universities are now directly paying their athletes through legal damages. Laine Higgins, a journalist with the Wall Street Journal, covered the dilemma. I spoke with her about the future of college sports, what journalists should take away from the settlement and what the situation is like for booster groups. This is “We Mean Business: Drive to Work with George Headley.”
Headley: I really want to talk about your story that you did with Rachel Bachman, which was The billion-dollar question looming over college sports. And I was wondering, from your perspective, what is that billion-dollar question that’s looming over college athletics in this current state?
Higgins: The billion-dollar question, possibly more, is how enforceable is the salary cap that’s being instituted? How are the new rules going to work, basically. So as part of the House settlement, obviously, schools are able to share revenue with athletes and as part of the settlement language, there was a lot stricter language around what NIL deals could constitute. And there’s a clearing house for those now. And the idea that the College Sports Commission and the defendant conferences sort of came to is that, “All right, we want to get pay-for-play out of it.” So their idea for that was just trying to cut collectives out of this entirely, because collectives were a thing that sprang up in 2021 once NIL became legal, and it took some of the control over the money and the flow of this away from athletic departments, and it was being operated by third parties. But there was a big disagreement between the lawyers representing the plaintiffs, who have the same view as the collectives, and the College Sports Commission and the defendant conferences over what constituted a valid business purpose. And they were basically arguing, if you have an athlete show up and sign autographs, and people are paying for those autographs, that’s a valid business deal that should work.
But they agreed that this was going to be a new era, and that you’re probably not going to be able to just pay a linebacker $100,000 because you want him to come to your school. So basically, the money is being redirected, in theory, and it’s these boosters that were suddenly tapped on to spend all this money on college sports being told that they can’t spend money in the same way anymore, and it seems kind of anti-free market if you’re going to be instituting that sort of cap. So even though this is something that everyone agreed to, the devil’s kind of in the details. And the question is, not just based on what these rules are, what’s going to happen, but it’s the question, okay, so then what happens if you break the rules? And that was one of the biggest downfalls of the NCAA over the last few years, is that enforcement was very light, and people weren’t afraid of a punishment if they broke the rules. So people were kind of doing that left and right, and that’s why pay-for-play, even though that’s technically always been illegal, was happening all the time in college sports. And if the College Sports Commission (CSC) actually does have some teeth and some enforcement ability, then things might change. but up until that point, it’s only been around for a month, I think people are sort of cautious, and they’re kind of waiting to see what happens with all of this.
Headley: Could you walk me through that timeline of athlete pay and athletic salaries in college sports? Because I know that we’re entering a very new state. I know in the past, we’ve seen a lot of different developments over the course of these past five years, where athletes were considered athletic students, and now they could be considered employees by universities.
Higgins: The 10,000-foot view of this is that from the beginning of the NCAA, athletes were considered to be amateurs, which means they play for the love of the game, they’re not getting compensated. And the clear bright line was that you can make $0 from doing this. And the know used to be pretty draconian, where you couldn’t have a bagel with cream cheese because that was considered a meal, but you could have a bagel without cream cheese because that was considered a snack. And all of the benefits that athletes got were very, very strictly monitored by the NCAA. And in the last 20 years, that started to change, where initially the compensation that you could get was your scholarship, and then they added on grants and stipends for the cost of attendance. And then as a result of the NCAA vs. Alston ruling, you also could get academic awards up to like $5,300 a year. And that case didn’t specifically allow for NIL, but it raised a lot of questions about the NCAA rules and whether they would stand up to antitrust scrutiny.
And two years before the Alston case was ultimately decided, there were a couple states, California, the first among them, that passed laws saying, “Hey, we actually think that athletes should be able to sign endorsement deals and be able to profit from their name, image and likeness.” And they set a very long effective date, so several years into the future, to try to say, “Okay, we’re putting pressure on you, NCAA. Figure your stuff out. You need to try to change your rules so that this is legal before then.” And there was a lot of pressure, the NCAA was studying this, it looked like they were going that way, they had all these rules laid out, but then when the Alston decision came down, they kind of just said, “Okay, whatever works, and we’re not going to really enforce anything,” because they were so afraid of getting sued in the event that they actually did have some sort of rule that limited athlete compensation. So, from July 1, 2021, onward, athletes were able to sign endorsement deals. And that could be for the local pizza shop on campus, or it could be for a car, or it could be, you know, multi-million dollar deals for Gatorade like you’re seeing, Bryce Young and the Heisman House ads, or Paige Bueckers with Gatorade ads. That is all new.
In the backdrop of all this, while all this is happening, there’s other lawsuits about player compensation and the status of players. So the big question that remains to be resolved is, what exactly is the legal status of athletes? Because as part of the House settlement, which dealt with some NIL back pay, but also had a forward-looking revenue sharing piece, so athletes can be paid directly by their schools for the first time, starting as of July 1 of this year. There’s a question of like, “Okay, so if you’re getting a check directly from your school, does that make you an employee?” And athletes have always had a slightly different status than work-study students at college, in that any old student that’s going to ASU could potentially have a job through the university and get paid and still have their scholarship. But athletes, there was different rules around that for a while, and now the question is, “All right, well, if there’s a settlement or a judge that kind of arbitrarily set this cap for what compensation is, should athletes have any say in being able to negotiate that?” And can you negotiate that if you don’t have some sort of representative body, and is that representative body a collective bargaining agency, like a players’ union? And can you have a players’ union if you’re not employees?
So there are other cases that are currently working their way through the courts about the athlete employment status. You’ll notice in the executive order that President Trump just signed, there was also a clause basically tasking the National Labor Relations Board to figure this out, because the NLRB under Biden was a little bit more labor friendly, and that’s why you had a group of athletes at Dartmouth trying to unionize and trying to actually challenge that employee status. Ultimately, that was pulled back and obviously in this administration, it’s a little bit less union friendly of a climate, so things are kind of on pause going through that route. That’s a major question that remains to be seen, because I think people in college sports do want there to be some sort of way for athletes to have an input in this, but they don’t want to have them be employees. And that’s sort of where the line in the sand has moved, and where the clear, bright line is like, instead of it being “You can get paid nothing,” it’s like, “Well, you can get paid something, but what is your title?”
Headley: In your article, you mentioned that in the past, booster groups are kind of viewed as pariahs. Could you walk me through how that attitude has either changed or has remained stagnant over the years?
Higgins: Pre-NIL, if a booster was giving a $100 handshake, that was very much seen as against the rules. And the most famous case is probably SMU with the death penalty in the 1980s. As part of it, some of these recruits in the old Southwest Conference, where there was some pretty rampant cheating from, like, all of the teams, where, I think every single team in the conference got sanctioned at one point in a decade span. But Eric Dickerson, incredible running back, he was offered a gold Trans Am that just magically appeared in his driveway. And turns out it was actually from a Texas A&M booster, it wasn’t from a SMU booster. He ultimately went to SMU, and the assumption was that every athlete on that team at the time was getting paid, and the NCAA, as a way of cracking down, said, look, we’re not going to tolerate this. And it gave them a penalty, called the death penalty, that effectively killed their entire football team for two years. And it really has taken until now for SMU to get back to somewhat of a level of relevance. So it’s, you know, what, 50 years almost. And I think that was sort of the view, is well, the boosters can’t get punished by the NCAA because they’re not under their purview. But you can punish the team. So you can have a bowl game ban. You can, you know, lose scholarships. You can have a lot of ways that the NCAA can come down. So that was sort of the threat of, “You better stay in line, or you better be really sneaky at breaking the rules so you don’t get caught.”
Jeremy Pruitt at Tennessee most recently, I think the allegation there was that there was McDonald’s Happy Meals with money in them given to recruits. So, that’s sort of why they were seen as the pariah. But then that changed dramatically with NIL, because all of a sudden these third parties, the collectives, were saying, “Hey, we need you guys to give us money so we can funnel it to the athletes via these endorsement deals. So no longer is it bad if you do a $100 handshake, like we want you to do that. We want you to spend money on us.” So, it used to be that the only legal way to compensate athletes was indirectly, either through donating to the athletic department and helping pay for stadium renovations, or a nutritionist, or all these extra benefits. Like, that’s why you saw these locker rooms with lazy rivers, or, like, these crazy facilities, because that was the only place where you could spend money and have it go towards the team without paying athletes. But now that paying athletes is allowed, these boosters were called on to basically fund this whole new era, and they became the most important people for the athletic departments, because even though it wasn’t technically going through the athletic department anymore, the athletic department has a vested interest in their football team being good. So they need the boosters to pay the athletes for that to happen. And then, when the rules changed this summer with the new House settlement, it kind of became unclear whether boosters could keep doing that and whether they were going to be going back to the pre-2021 model of being “Hey, okay, you’re actually kind of seen as a boogeyman, like we need you to stay on the side,” or if they’re going to continue to have influence in a very direct way.
Headley: What advice would you give to sports journalists who are now entering this industry with all of these new changes happening? I mean, from my perspective, it seems very much like college sports, when you’re covering it, now takes on a much more business-oriented angle. So from your perspective, how has that changed? And how have you as a journalist changed with those in college sports?
Higgins: The money is always a big piece of covering any beat, you know, they always say, “follow the money.” But, like, that’s never been more true than in college sports, I think. It’s a bit hard because it’s very opaque, and it’s hard to actually get a sense of how teams stack up against each other, because none of this stuff is public. So you do have to be a little bit more skeptical of anything that someone tells you about dollar amounts or any number that you see. I definitely had to learn a lot more about antitrust law, and legal proceedings on this beat, than I ever expected to. So I think, I guess, like a good learning experience, because if you are covering college sports right now, you’re actually a legal reporter, you’re a politics reporter, like, there’s lots of other areas that you’re dipping your toe into. You kind of have to just read really, really broadly. And there’s so many different forces that are currently shaping college athletics, whether it’s the President or Congress or lawsuits, or the NCAA, the new CSC, like you just kind of have to be monitoring a lot more stuff now to try to figure this out. And even before all of this changed, I think it was still true that the biggest boosters that had the most money, that have the most influence are still going to be important. It’s such a cliche, but literally, just follow the money and the story will present itself, because that’s always what happens.
Headley: From my understanding, when I look at the SEC filings, so the quarterly reports, I find who’s getting paid from what. In college sports and in booster groups, how do you find the data? How do you find where to look for like, “oh, this business group is paying this athlete” or so on and so forth?
Higgins: The short answer is, you don’t. Sometimes, if you are talking to an agent or an athlete, they might disclose it, but a lot of times they’re signing NDAs with these deals, so they don’t have any incentive to tell you. Sometimes it’s a chatty booster that’s bragging about how much that school is getting but like, you just have to attribute it to them because you’re not seeing receipts on this stuff. And in the previous era, there was a couple of platforms like Open Doors or SANIL, and there’s some platforms that do a lot of these deals. They don’t capture the entire marketplace, but they have enough of a volume of data that they can say, “Hey, of the deals that were reported to us here is what we have.” You can kind of get a ballpark sense, but it’s never going to be perfect. And you just kind of know that going in that any data that’s claiming to say the marketplace is worth this much, or this is the average that an SCC offensive lineman makes. You kind of just don’t know, and you’re taking it with a boulder of salt. In theory, that’s going to change a little bit going forward, because the College Sports Commission has said that they’re going to release some data. We don’t know how granular that’s going to be, but in theory, if there is a central body that’s collecting all of this information on college sports deals, there should be a little bit more transparency around it.
I’m not too optimistic for how that’s going to be, but some of the issue is that, in the past, you could sometimes FOIA some of this stuff, but because the College Sports Commission is a private entity, and because all these schools are like, “Oh no, it’s a trade secret how much we’re paying our athletes.” So like they are trying to keep a kind of a firewall around this information, because they don’t want it to get out, because if you’re not spending the maximum, you don’t want to be called out on that, because then a recruit will see that and potentially not go to you. So yeah, it’s tough, because no one in the industry has an incentive to do this. The only bright spot is that the public schools, they do have some financial disclosures. There is data out there on athletics revenue, and most of the conferences are also 501c3s, so you can look up their tax returns as well, and that will give you a pretty good sense of compensation for officials and how much they’re distributing to schools. You know how much they’re bringing in, how much they’re spending on lobbying. So there is some numbers that you can find in that stuff, but when it comes to NIL, there’s just really, really unreliable data out there.
We wrote about NiJaree Kennedy, the softball pitcher at Texas Tech, who had a million-dollar deal. Her agent and the people that were involved in the deal told us that’s how much it was. So like, we feel confident saying that number, but we’re not going to extrapolate to say however many millions has been spent on softball in, you know, the 2024 season, because, like, we just don’t know, and I don’t know that anyone knows that answer. So it’s very opaque, and that makes it challenging.
Headley: Do you have anything else in regards to either how you’ve been approaching these stories or about college athletes in the industry as a whole?
Higgins: The moment that we’re at right now feels a bit like July of 2021, as well, in that it’s still so new, and there’s going to be a lot of consequences, but we kind of need some things to unfold first. So it’s just a fascinating time to be observing, because that’s kind of all you can do right now. And until there’s a little bit more data on the page, we can’t definitively say whether this is going to work or whether it’s not. And I think you’re hearing a lot of commissioners say, “Let’s give this a chance. Let’s not just rip it, because there’s hiccups from the get-go.” So, I mean, I’m fascinated to see how this works, whether this works, and you know what sort of consequences there will be for the rest of the athletic department if you are spending so much money on football, what happens to soccer? What happens to baseball? All these other things.
So, yeah, I mean, this is a huge turning point moment in college sports, definitely. And you could argue some of the athlete compensation is long overdue, but I think it’s not so much the what, it’s the how. And that’s, I think, the most fascinating piece of this, and that’s also something that’s going to change as people figure out how to game the system. Because no matter what industry you’re in, people are always going to find the little loopholes and the ways that they can have an advantage, and then it’s like, whack-a-mole closing those, and I think that we’re in the midst of people trying to sniff those out right now, and it’s interesting to me.
Headley: Thank you so much for your time Laine, it was so nice to meet you.
Higgins: Yeah, of course, thanks so much, George.
Headley: That was Laine Higgins, a journalist from The Wall Street Journal. She wrote the article “The Billion Dollar Question Looming over College Sports.” And this is “We Mean Business: Drive to Work with George Headley”
