third-party payment

At the top of their game: College sports and the quandary of athletes’ financial compensation

One of the highlights of attending The University of Tulsa College of Law is having an opportunity to collaborate with faculty members on scholarly projects. Rising 3L Carter Fox recently wrapped up work with Professor Ray Yasser on an examination of the contentious issue of whether or not college athletes ought to be paid to play. Their discussion and proposed solution are slated to appear as a co-authored piece in the fall 2021 issue of the Harvard Journal of Sports and Entertainment Law (JSEL).

Entitled “Third-Party Payments: A Reasonable Solution to the Legal Quandary Surrounding Paying College Athletes,” Fox and Yasser’s essay – which the JSEL editors called a “fantastic article” when they accepted it – grapples with the NCAA’s “amateurism rules,” which prohibit student-athletes from receiving any compensation related to their athletic prowess. Many college athletes, coaches and members of the public feel this situation is unfair, noting that in 2016-17, the NCAA raked in over $1 billion in revenue. However, the athletes who played a vital role in generating this revenue do not receive any of that money beyond their scholarship awards, room and board, books and a cost-of-attendance stipend.

Sports law and fair p(l)ay

Fox, whose father coached high school football and wrestling, has been a long-time sports fan. Following graduation from TU Law, he hopes to pursue a career in litigation in Tulsa.

University of Tulsa College of Law student Carter Fox
Carter Fox

While his undergraduate degree from the University of Arkansas is in history and political science, as a TU Law student Fox has been able to channel his deep-seated interest in sports directly into his juris doctor studies. “Sports law is particularly interesting,” he noted, “because it’s not necessarily a specific type of law. Instead, sports law incorporates nearly every aspect of the law – from torts, to antitrust to constitutional questions.”

In January 2019, Fox began working as a research and graduate assistant for Yasser, a highly regarded expert in sports law. “Carter Fox is, to use a sports metaphor, a ‘natural,’” commented Yasser. “He’s a gifted writer, hard working and dependable, sees legal issues clearly and analyzes them artfully. It’s also great that he shares my interest in sports law-related issues. I’ve kidded him that we live at the intersection of Sports Avenue and Law Street.”

Retired University of Tulsa College of Law Professor Ray Yasser
Ray Yasser

Fox and Yasser’s JSEL article arose out of their collegial relationship and the ongoing conversations the two men had about the unfairness of the NCAA’s amateur model. “What’s most interesting to me about the issues surrounding compensating college athletes is that the whole collegiate amateur scheme is something uniquely American,” remarked Fox. “It’s not really replicated in any other country.”

Fox contends that, if the same restrictions were applied in a business setting, they would “almost certainly” violate antitrust laws. “However, our courts have created standards that uniquely apply in the sports context for analyzing anticompetitive rules. The fun and challenging part with our article was formulating a solution that a court would accept and that would also help athletes.”

Third-party payments

“It seems fairly safe to say that, despite ongoing litigation, the NCAA model is not going to be entirely replaced anytime soon,” noted Fox and Yasser. The ingenious solution the pair propose for this legal quandary is a third-party payment system. This, they argue, is a workable compromise between direct “pay-to-play” remuneration for athletes by universities and a strict no-payment policy – a “staple of American sport.”

Under Fox and Yasser’s third-party payment system, student athletes would be permitted to capitalize on their own names and likenesses. They could use their personal fame to garner endorsements, sponsor products and negotiate commercial deals. “It is fundamentally unfair that household names like basketball star Zion Williamson, who has over 2.7 million Instagram followers, cannot take advantage of their own intellectual property rights while the NCAA rakes in millions of dollars by utilizing his name and likeness.”

Benefits

In their JSEL article, Fox and Yasser identify four main benefits of a third-party payment system:

  1. Athletes could negotiate in the open marketplace for the rights to their own intellectual property.
  2. The free market could determine an athlete’s financial value.
  3. The need for payments from college donors would be eliminated, which would go a long way to blocking the steering of athletes into particular programs.
  4. Colleges’ ability to fund Olympic sports, such as wrestling, would not be undermined.

“In essence,” Fox and Yasser argued, “the third-party system is a reasonable solution that could address many of the serious issues regarding pay-to-play by maintaining the status quo between colleges and student athletes.” At the same time, they maintain, it would allow athletes to reap the rewards for their prowess and fame.


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