What's Really to Come From the NCAA's Student-Athlete Agent Announcement?

The NCAA's landmark declaration allowing college basketball players to attain advisory agents may not change the NBA Draft process as much as one may think.

It’s been 54 years since the NCAA’s first executive director, Walter Byers, coined the term  “student-athlete.” The term was invented for litigation purposes: to help universities defend against workers’ compensation claims brought by students who were seriously injured in the course of playing a sport. These injured students argued that, in light of their substantial energies on behalf of their universities and athletic programs, they were eligible to receive the same kinds of workers’ compensation insurance policies that university employees enjoyed. The term “student-athlete” was designed to rebut this line of reasoning and distinguish college athletes as non-employees. Colleges typically won related lawsuits, and injured student athletes were deemed ineligible for workers’ comp.

In the decades that followed, the NCAA assigned more noble intentions to the term “student-athlete.” It has now become synonymous with NCAA efforts to separate college sports from professional sports. One hallmark of those efforts has been the NCAA’s prohibition of sports agents, some of whom would like to represent high school and college athletes. The NCAA has long feared that attorneys, accountants and other informed adults acting as agents would somehow exploit, rather than inform and educate, college athletes.

The NCAA doesn’t always possess this fear: while college basketball and football players are threatened with the loss of eligibility if they retain the services of an agent, NCAA rules allow college hockey and baseball players to gain free career advice from “advisors” who in many cases happen to be “agents.” Still, the NCAA has long exhibited an aversion to agents and has openly worried that the presence of agents in college sports could erase valued lines between NCAA-sanctioned activities and professional sports.

The NCAA’s reasoning has increasingly come under fire. As many Division I colleges now pay their basketball and football coaches millions of dollars a year, as teams play in stadiums and arenas worth hundreds of millions of dollars and as games are broadcast through multimillion-dollar TV deals, many have regarded a so-called separation between college and pro sports as a work of fiction—especially when seemingly everyone except the college athlete is paid. Legal actions brought by Ed O’Bannon, Sam Keller, Shawne Alston, Martin Jenkins, Kain Colter and other former and current college athletes have spurred important legal changes and policy developments. These athletes have revealed the various ways that segregating agents and other player advocates from the lives of college athletes tends to disadvantage those athletes—such as players appearing in video games without their permission or compensation, or universities capping the financial value of athletic scholarships at less than the actual cost of attending college. Nonetheless, the NCAA has steadfastly insisted that agents stay away from their athletes.

Until now, that is.

In a landmark declaration, the NCAA announced on Wednesday that, among other rule changes, (1) college basketball players can hire an agent so long as the player requests an evaluation from the NBA Undergraduate Advisory Committee (which consists of NBA team executives who provide candid advice to college players on their draft prospects); (2) assuming the NBA and National Basketball Players’ Association (NBPA) consent to the following arrangement, high school basketball players who have been identified as an “elite senior prospect” by USA basketball can also be represented by an agent beginning July 1 before their senior year in high school; and (3) agents must be certified by the NCAA in order to work with high school and college athletes (however, until Aug. 1, 2020, NBPA-certified agents will be automatically considered NCAA certified and family members or those who act solely on behalf of a pro team aren’t required to be certified at all).

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Here are six key implications of these rule changes:

1. Elite basketball players should gain from the knowledge and advocacy of agents

Skilled basketball agents will assist elite college basketball players (and eventually elite high school basketball players) in a variety of ways. The most obvious example is that the agent will provide informed advice to the player on when to turn pro. The agent can thus discuss the various advantages and disadvantages associated with this critical life decision. To be sure, elite basketball players will also rely on the counsel of other influential figures, such as family members and university academic advisors. But gaining the advice of someone in the industry should prove helpful.

As noted above, college hockey and college baseball players already enjoy this form of advice. Under relevant NHL, MLB and NCAA rules, pro teams can draft players who then matriculate to college, or who stay in college, and play D-I sports. During that time, these players can consult with an “advisor” on the appropriate moment to negotiate with a pro team on leaving college. A basketball agent should be able to offer industry relevant insights to college basketball players in the same way hockey and baseball advisors do so for the players they counsel.

It is also possible that basketball agents will be able to steer elite college basketball players through assorted disputes and controversies. For example, if a player secures an agent and stays in school, he or she might at some point encounter a problem with his coach. In that scenario, the agent could speak with a coach on behalf of the player. An agent could thus reduce the considerable power disparity between a teenage player and a coach who might be two or three times older than the player and who possesses far more education, wisdom and institutional and regulatory understandings.

Likewise, there may be times when a college player is investigated and punished by his school or the NCAA. In such a scenario, the player’s interests may be at odds, or least not congruous, with those of his school or coach. An agent could advocate for the player in ways that a university general counsel or athletic department compliance officer could not. Consider the FBI’s investigations into colleges for alleged bribes: in some cases, those investigations have implicated specific players, whose reputations are on the line and who could even eventually be charged with crimes.

The NCAA also instructs that agents will be able to pay for certain meals, transportation and lodging on behalf of a player and his family. Qualifying expenses will include those “related to the agent selection process” or “associated with meetings with the agent or a pro team.” These changes relax longstanding and rigid NCAA rules against agents making modest purchases on behalf of a player and his family. They also help to create a more normal experience for college students who happen to be elite basketball players and who have sometimes seen their classroom peers wined and dined by corporate recruiters without the accompanying worry of NCAA eligibility.

2. New job opportunities for persons interested in representing basketball players

The NCAA’s new policy on agents could open up jobs for persons who do not represent professional basketball players, and who perhaps have no intention of becoming an agent for NBA players, but who would enjoy representing college athletes and gain from the associated educational aspects of that experience.

To that end, the NCAA’s announcement indicates that it will feature an agent “certification” program. The announcement doesn’t offer any details as to how the NCAA intends to certify agents. However, a plausible certification system would involve prospective agents taking and passing a standardized exam in order to demonstrate a sufficient mastery of relevant NCAA amateurism and education rules. The National Football League Players’ Association adopts this type of design for persons who would like to become NFLPA-licensed agents: prospective agents must pass a standardized exam to exhibit an understanding of the NFL’s collective bargaining agreement and related agreements.

SI spoke with one person who is not an NBA agent but who intends to learn more about the NCAA agent certification program. Dustin Maguire, an attorney at the Center for Family Law in Edwardsville, Ill., and a former Division I basketball player and coach, says that the NCAA’s announcement constitutes “a truly historic day for young athletes.” He reasons that having “access to the knowledge and experience of agents” will help college and eventually high school athletes “make informed decisions for their futures, not just in basketball but in life.” Maguire also envisions that the NCAA’s certification process should highlight how “a fundamental understanding and appreciation of the value of a college degree needs to be the starting point for any agent working with high school and college basketball players.”

To be sure, some of the college players’ agents will be agents with NBA player clients. In fact, the policy explicitly notes until the NCAA’s certification process is in place, “NBPA-certified agents will be considered NCAA certified.” That said, expect the pool of NCAA agents to include a different population than NBA agents.

Mike Lawrie

3. College players remain shut out from fair market compensation for the commercial use of name, image and likeness

The NCAA’s announcement notably does not mention that agents will be able to negotiate endorsement deals on behalf of elite players. In O’Bannon v. NCAA, former UCLA basketball player Ed O’Bannon proved that the NCAA and its nearly 1,300 members were in violation of Section 1 of the Sherman Antitrust Act. These defendants were found to have conspired to set as $0 the value of their commercial use of players’ names, images and likenesses—most memorably in video games but also in other products. The U.S. Court of Appeals for the Ninth Circuit identified the appropriate remedy to be the ability of colleges to offer student-athletes the full cost of attendance (which is usually several thousands of dollars per year). O’Bannon’s case also led to a settlement with video game developer Electronic Arts whereby EA agreed to pay players who appeared in games up to $7,200 and on average $1,200.

Many advocates for student-athletes contend that marketable college athletes deserve more. These athletes, advocates insist, should be able to sign endorsement deals with third-parties and also be able to monetize their celebrity. Consider UCF kicker Donald De La Haye, whose popular YouTube channelDeestroying allowed him to earn money through YouTube. He lost his scholarship to UCF, however, when it was determined that monetizing of a YouTube website about his life triggered a violation of NCAA bylaw 12.4.4. This bylaw prohibits student-athletes from using their name, appearance or reputation to promote a business. De La Haye has sued UCF in a First Amendment case that is currently being litigated in the U.S. District Court for the Middle District of Florida.

The NCAA’s new policy does not change any rules related to use of players’ commercial identities. Therefore, NCAA agents will remain barred from negotiating any intellectual property rights on behalf of their college clients who intend to remain NCAA-eligible.

4. Limiting eligible players to “elite” male basketball players could spark antitrust, equal protection and Title IX problems

The NCAA’s new policy only benefits a tiny slice of NCAA athletes: male basketball players who request an evaluation from the NBA Undergraduate Advisory Committee. Considering that only 60 players are drafted each year by NBA teams and considering that some of those players won’t have played NCAA basketball (for example, in the 2018 NBA Draft, nine of the 60 drafted players did not play in the NCAA), the number of college players who have a plausible chance of being drafted in any year is probably under 100. While more players might now request an evaluation in order to become eligible to hire an agent, this will likely remain a small pool of players. Players who fail to make this cut might question why the NCAA is limiting the pool when they too could gain from the services of an agent. This would seem especially true of players who receive offers to play professionally overseas.

The same is true of the vast majority of high school basketball players. While none of them stand to benefit from the NCAA’s new agent policy until the NBA and NBPA negotiate a change to the eligibility rule (see below), such a change will only impact eligible high school players who are seniors and whom USA Basketball identifies as “elite” prospects. It’s unclear why the NCAA is relying on this particular metric in order to make such an important assessment.

There are also grounds to question the limitation of the policy to male basketball players. While the WNBA has one of the most restrictive eligibility policies in all of pro sports—American players must be 22 years old and have completed college eligibility or be four years removed from high school—the best college players in the women’s game, like other college athletes, could benefit professionally and educationally from the advice of agents.

Last but not least, college football players are probably wondering why they’ve been left out. They aren’t allowed “advisors” like their classmates on the hockey and baseball teams, and they won’t be eligible for agents like the star players on the men’s basketball team. Like with women’s basketball, the NCAA could try to explain away the discrepancy based on the relevant pro eligibility rule: NFL players must be at least three years removed from high school, meaning eligible players for the NFL draft are all seniors, plus juniors and redshirt sophomores who declare. In contrast, in the NBA, draft eligible players include the vast majority of college players: players only need to be 19 years old plus—in the case of American players—one year removed from high school.

The NCAA’s policy will be vulnerable to antitrust and equal protection litigation. Players who are denied access to the benefit of agents could argue that the NCAA and its membership (which consists of colleges, conferences that are competing businesses) have joined hands in an unlawful conspiracy to segregate the labor market in anti-competitive ways. Players accorded access to agents could enjoy superior chances for the pros while the rest of the player pool could be set further back in their professional pursuits.

The NCAA would likely respond by insisting that its decision to allow agents is geared towards a specific labor market: college athletes who face the difficult decision on whether to continue studies or turn pro. As an aside, those who turn pro could resume their college studies later in life, albeit without the benefit of an athletic scholarship—as Maguire observes, the NCAA’s new policy “show[s] a real commitment from the NCAA to seeing players walk across the stage with a diploma in hand, whether that walk takes place at 22 or 32 years old.” Still, the NCAA could cite that a core goal of the Commission on Basketball Report (also called the Rice Report) released in April is to better inform college athletes who face the difficult choice of turning pro.

To that point, the NCAA could maintain that college athletes who can’t go pro—such as true freshmen and true sophomores in football—aren’t faced with the decision to turn pro and thus don’t need an agent. Along those lines, the NCAA would attempt to establish that its chosen methods for determining who can hire an agent was rationally and thoughtfully determined.

Female athletes could bring separate kinds of legal claims: equal protection and Title IX. While the U.S. Supreme Court ruled in NCAA v. Tarkanian that the NCAA is not a “state actor” (meaning the NCAA is not a public entity that must adhere to constitutional protections), public universities with women’s basketball programs are state actors. Women players at those schools could argue that by being denied the same benefits and institutional programming of male classmates—who gain from access to sports agents—schools are in violation of both the Fourteenth Amendment to the U.S. Constitution and Title IX. The NCAA would respond that its new policy is unrelated to gender and is motivated by consideration of when players can turn pro and their ability to make informed decisions.

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5. The NCAA is relying in part on the NBA and NBPA to make their own rule changes

As referenced above, the NCAA’s new agent rules only benefit high school seniors if the NBA and NBPA change their eligibility rule contained in their CBA. Under Article 10 of the CBA, American players must be at least 19 years old and one year removed from high school. In college, one-and-done players take classes in the fall and then, midway through the spring semester, they drop out to prepare for the NBA draft. This arrangement hardly seems wise from an educational standpoint, but empirical evidence shows that players who jumped from high school to the NBA from 1975 to 2005 generally did quite well.

It’s worth noting that the first high school players who stand to benefit from the new rule might currently be in middle school. Although the NBA and NBPA appear to have a mutual desire to modify the “one-and-done” rule so that players can once again go straight from high school to the NBA, it’s unclear when such a legal change will happen. The CBA runs through the 2023–24 season, with each side having the chance to opt out after the 2022–23 season. While the NBA and NBPA could amend their existing CBA to change the eligibility rule as a one-off change, changes usually occur as part of a larger negotiation where each side gives and takes on various matters.

Some may wonder why the NCAA would announce a rule change that does not appear to be coordinated with the NBA. There are likely several reasons, including an important legal one: both the NCAA and NBA want to avoid any appearance of coordination since it could make it more possible for adversely impacted players to argue that the two businesses are engaged in aligned activities that pose antitrust implications.

6. Will the new rules spark more or fewer “bribes” (as the FBI puts it)?

Since September 2017, a key story in college basketball has been the U.S. Justice Department’s decision to charge assistant coaches, Adidas executives and financial advisors with wire fraud, money laundering and other felonies in what the government depicts as a bribery scheme: Adidas executives paying high school recruits to both attend college programs affiliated with Adidas and become more inclined to sign an endorsement deal with Adidas. It remains to be seen if the government can prove that paying a high school student to attend a college can give rise to a crime. As explained above, it will also be some time before high school players can benefit from the NCAA’s new agent rule. When that time comes, however, it will be interesting to see how NCAA-certified agents for high school players interact with possible overtures from sneaker companies and boosters.

Michael McCann is SI’s legal analyst. He is also Associate Dean of the University of New Hampshire School of Law and editor and co-author of The Oxford Handbook of American Sports Law and Court Justice: The Inside Story of My Battle Against the NCAA.