Miley Cyrus’ performance in between games at the 2021 Men’s Final Four was cited by NIL proponents as the most recent example of the glaring disparity between the NCAA’s vast financial resources ($16 billion in annual revenue) and the compensation—or lack thereof—afforded to the players. “We can’t pay the student athletes. We don’t have enough money to go around. – NCAA,” ESPN’s Taylor Twellman tweeted in reference to the show. While it is fair to note the commercialization of college athletics has resulted in a vast amount of money flowing seemingly everywhere but the athletes’ pockets, it is a stretch to suggest there is a connection between the “Tribute to Frontline Heroes” concert—which was sponsored by AT&T, Coca-Cola and Capital One, not the NCAA—and the size of the pie slice the players receive. As Jonathan Jensen (sports marketing and analytics professor, University of North Carolina) explained, “Activation dollars are not something the NCAA touches, that flows through them or in reality they even have any say in how they are allocated.”
Our Take: Miley Cyrus didn’t take any money out of player pockets. And for the record, the NCAA’s current argument against the players getting paid isn’t the lack of money; it’s that the public doesn’t want them to. But Daniel Rascher (sports management professor, University of San Francisco) cited an indirect correlation between Saturday’s concert and NCAA revenues, which aren’t trickling down. “The NCAA, in allowing CBS to sell the spot to AT&T, Coca Cola and Capital One [by increasing the amount of time between games], essentially increased the [value] of the media rights.” The NCAA’s current 14-year, $10.8 billion broadcast pact with CBS/Turner runs through the 2024 March Madness tournament.
To be clear, AT&T, Coca Cola and Capital One each pay the NCAA for the right to use its logos and to leverage its championships. “But then each company spends at least twice that much activating the sponsorship [including the required media buy], which is really how they generate a positive return on investment,” Jensen said. The brands chose to sponsor the Miley Cyrus concert because it is good for business.
Back in January, the NCAA opted to punt on issuing NIL rules after the Justice Department expressed antitrust concerns, and there has been no indication since as to when they intend to enact those bylaws (though some state legislation will go into effect this summer, which puts them on the clock). But once athletes can be compensated for their name, image and likeness, there’s an argument to be made that the NCAA’s three corporate champions should each allocate a portion of their respective activation budgets to campaigns featuring those individuals. “If you’re trying to activate a college athletics related partnership, why not have some of that money go to the student-athletes,” Jensen asked.
The problem is, even if a campaign featuring athletes could generate a comparable ROI to the Miley Cyrus concert, NCAA rules on NIL aren’t expected to be written up in a way that will incentivize brands like AT&T, Coca Cola or Capital One to make a change. Group licensing, which would eliminate the need to negotiate individual deals with individual student athletes, isn’t expected to be permitted. The NCAA is concerned that if institutions or conferences engage in the practice, it could morph into a form of pay-to-play and upset the competitive balance.
The other problem corporate partners are likely to encounter is the NCAA looking to prevent the use of school IP alongside the athlete’s name, image or likeness. “[The NCAA] is worried if they can be used together, the student-athlete will benefit from the school logo also being on the advertising. It doesn’t make any sense because that’s how sponsorship works. You use the two together and one plus one equals three,” Jensen explained.
Rascher believes that both rules will eventually change. “The equilibrium is one in which the universities are involved because they have the relationships with the sponsors and the joint product of the university and the athlete in uniform—the highest value—[brands] don’t get separately. We’ve seen in every other situation, including the pros, the team and player sell the joint product. Part of that will become group licensing for sort of these blanket packages.”
The use of college athletes in marketing campaigns doesn’t necessarily mean brands will shy away from doing pop/rock star concerts moving forward. “I sort of think we’re going to see brands spend even more in advertising around college sports because now [they] can do more and get a higher return on investment,” Rascher said. The sports economist suggested the bulk of college athlete-focused campaigns would likely focus on social media (athletes often have higher engagement rates than celebrities do) and “local activations in local communities,” so there will still be the need for national TV activations like the Miley Cyrus concert, too.