The Supreme Court has unanimously sided with student-athletes in the NCAA case. USA Today Reporter Steve Berkowitz joins Yahoo Finance Live to discuss.
AKIKO FUJITA: Welcome back to Yahoo Finance Live. We saw a big shake up in the business of college sports on Monday. The Supreme Court unanimously affirmed a lower court ruling that allows for a small increase in how college athletes can be compensated. The justices ruling that the NCAA violated antitrust laws by placing limits on the education-related benefits that schools can provide to athletes.
For more of a breakdown on what that means for the NCAA, let's bring in Steve Berkowitz, USA Today Sports reporter. Steve, this is a case that you have followed from the very beginning right now. It feels like on the issue of compensation of athletes, there's a number of threads that we are seeing play out in states across the country. What does the Supreme Court ruling ultimately mean?
STEVE BERKOWITZ: Yeah, I mean, right now, with regard to name, image, and likeness, the Supreme Court's case doesn't really address that directly. But what it did direct, did what it did look at is the ability of the NCAA to make its own rules without a lot of interference from lawyers and courts. And in that instance, the court said that the NCAA is subject to this kind of scrutiny and does not have sort of unlimited leeway to make its own rules without that kind of interference. And for the NCAA, that's a big problem.
ZACK GUZMAN: Yeah, and I mean, when we look at that specifically, obviously, in the decision here, it kind of laid out the idea on its face that, you know, the NCAA saying that it's better. The fans want to see kind of the purity of college sports remain intact. It would be legal if you applied it to any other sector in America. You can't just say we're not going to pay you or pay less because that's what the fans want.
And when you think about it, I mean, I wonder how much that maybe locks the NCAA into a position it didn't want to find itself in and having to create a decision kind of on their own now, maybe with less rules in place. So obviously, the states are doing what they're doing, but how much pressure does it put on the NCAA now to really, I guess, undo the way they've been doing business forever?
STEVE BERKOWITZ: Well, it puts a lot of pressure on the NCAA. And they're also facing time pressure because you have eight states that have passed laws that will give athletes the ability to make money from their name, image, and likeness beginning July 1. So the NCAA doesn't have a lot of time. And the NCAA is trying to thread it, sort of to thread the eye of a needle here, in trying to come up with rules that will allow athletes to do this kind of stuff with their name, image, and likeness, but not contain so many restrictions that it's going to get them sued again.
And that's a real tricky thing for the NCAA to have to deal with. The NCAA's Division I rules making body, the NCAA Council, is meeting today and tomorrow and again on Monday to try to make some decisions about how the association ought to go forward here. And it's going to be really interesting to see where they come in on this and how they go about it.
AKIKO FUJITA: Steve, it does feel like we're sort of moving towards what is inevitable, which allows athletes to be able to cash in on their name, image, and likeness, whether that is multiple states going forward with their bills, whether it's legislation on a federal level. From a business standpoint, what does that ultimately mean for the NCAA?
STEVE BERKOWITZ: Well, for the Association writ large, I'm not sure that it means a lot. The association's basic revenue stream is from the television contract for the basketball tournament. And that's-- I don't think that's going to be heavily affected. The place where this potentially has impact is for the schools.
I mean, on a business, on a money level, the concern that schools have is that if athletes are able to make endorsement deals without a lot of restrictions that businesses and companies, ranging from local pizza places to major shoe and apparel companies, may choose to put their money behind athletes, as opposed to into college athletics departments. And that's potentially a problem for them in the long run.
There's also the whole question of the whole notion of amateurism and whether or not athletes-- at what point do athletes in college sports begin to look like professional athletes and whether or not that's a problem for people who follow college sports, whether or not that really matters to fans, whether that will turn off fans, or whether that will make any difference at all to fans.
And there's also sort of a logistical and rules compliance management issue that comes with this as well in terms of trying to oversee this. Because the NCAA tries to maintain some degree of level competition, although it's a-- obviously, Alabama is playing a different kind of football than, say, for example, James Madison.
So I mean, there's not a lot of-- they have a level playing field on a lot of levels. It doesn't really exist anyway, but they're trying to maintain some degree of level and making it so that you have the same kind of things going on that allows a school like Gonzaga, for instance, in men's basketball, to be able to compete with a school like the University of Florida.
ZACK GUZMAN: Yeah, and I guess, you know, as we've heard in kind of the Supreme Court debating these things, they have kind of latched on to the idea of coaches making quite a bit of money through this as well. So why not the players? But when it comes to that, I mean, how do you see it actually shaking out? If you're there at the NCAA, you're trying to figure out what's the best way to handle this, you know, from a PR perspective as well, I suppose, what you would do in the short term to kind of address the issue now.
STEVE BERKOWITZ: Well, I think their-- I mean, what their safest-- their safest harbor at the moment is to have as few restrictions around this as possible in the hope that this will not result in another lawsuit in the meantime. And then they're hoping to get a congressional solution to this, that you get a national law that governs all of this. And you said you don't have different laws in different states.
The NCAA also really is hoping that a package of this in Congress will give them some legal protection from future lawsuits. But you have senators, particularly Democratic senators, who are insistent that if the NCAA is going to be given that kind of legal protection, that the colleges are going to have to provide additional benefits to the athletes in the form of better healthcare, potentially better educational opportunities and even some other kinds of things. Because right now, long-term healthcare for athletes really isn't there on a level and across the board basis for all schools in all situations. And there are senators who want to see that change.
AKIKO FUJITA: Steve, do you think the rule changes we're talking about right now in terms of athletes being able to cash in on their name, image, and likeness, is that ultimately going to keep these athletes in college? You look at basketball, for example. I mean, some would argue the only reason they're there is because there is a one and done rule. And the NBA commissioner has already said that he's in support of maybe reviewing that again. But if you can cash in while you're in college, you think athletes are going to stick around.
STEVE BERKOWITZ: Yeah, I think it might influence some athletes to stay around and stay around in college for a little longer. It might. But I think there are also a segment of athletes that really aren't that interested in going to college and want to be professional athletes and maybe go back to college later in their lives, or at some other point, they want to be able to get into pro sports and make money when their name is hot. And, you know, I completely understand that way of it at it as well.
The biggest thing with NIL, in addition to potentially keeping athletes in school, it just benefits athletes generally, and not just in the revenue sports or the most prominent sports, like football and men's basketball. The allowance of NIL activity potentially makes a big difference for athletes in a wide variety of sports for women's athletes, for athletes in sports like volleyball or hockey or lacrosse, which may have really fervent local followings in their communities.
So I think the ability of athletes to make money just from giving lessons or being involved in camps could put some significant money in the pockets of college students, which makes a big difference in their lives and potentially in the lives of their families.