Why the NCAA's Old NIL Rules Failed Student-Athletes — and What Federal Reform Could Fix

In 2019, the NCAA generated approximately $14 billion in athletic revenue. Of that, exactly zero dollars flowed directly to the student-athletes whose names, faces, and performances made the revenue possible. This was not a market failure. It was the deliberate design of a regulatory regime that treated the commercial value of college athletes as a public good the NCAA could capture and the athletes themselves could not. The rules governing names, images, and likenesses — known as NIL — were the mechanism. Until 2021, those rules prohibited student-athletes from earning a single dollar from their own NIL while permitting the NCAA, member schools, broadcasters, sponsors, and apparel companies to monetize that same NIL without limit.

This essay argues that the NCAA's old NIL framework was not a defensible extension of amateurism but a transfer of value from a powerless class (student-athletes) to a powerful one (the NCAA and its commercial partners). It further argues that the partial state-by-state reforms enacted since 2021 are insufficient, and that durable correction requires federal legislation that decouples NIL compensation from the employment question, preempts conflicting state rules, and creates a single national standard.

The Mechanism of Extraction

The pre-reform NIL regime operated through a single asymmetry. NCAA Bylaw 12 prohibited student-athletes from receiving any compensation for the commercial use of their NIL on penalty of losing eligibility. The same bylaw imposed no equivalent restriction on the NCAA, the broadcasters licensing game footage, the apparel companies selling jerseys with athletes' numbers, or the video game publishers selling products featuring athletes' likenesses. A student athlete whose jersey sold thousands of units could not receive a percentage. A student athlete whose image appeared in a televised promotional spot could not demand a fee. The athletes generated the value; the institutions captured it.

The standard NCAA defense was that this asymmetry preserved amateurism and protected the educational mission of college athletics. Both justifications collapsed under examination. Amateurism as a coherent principle requires symmetric treatment — no one in the system profits commercially from the athletes' labor. NCAA athletics has not met that standard since at least the 1980s, when broadcasting contracts began producing nine-figure revenues for the association. The educational mission justification fared no better. The actual time demands on Division I athletes regularly exceed forty hours per week during competitive seasons, often without academic accommodation, and the graduation rates the NCAA cites as evidence of educational benefit are inflated by majors clustered in fields chosen for schedule compatibility rather than student interest.

The honest description of the pre-reform regime is that it was a labor market in which one side was prohibited from negotiating. Calling that arrangement "amateurism" did not make it amateurism. It made it a managed market with a single buyer setting the price at zero.

What the Existing Legal Framework Already Suggested

The argument that NIL compensation requires a complete legal revolution ignores the legal infrastructure already in place. The Sports Agent Responsibility and Trust Act of 2004 regulates how sports agents interact with student-athletes — what they can offer, what disclosures they must make, what penalties apply for deceptive recruitment. That statute presupposes a world in which student-athletes have something of commercial value to negotiate over. Federal law, in other words, had already recognized the existence of student-athlete NIL value while NCAA rules denied athletes any way to monetize it.

The same was true at the state level. By 2020, more than twenty states had introduced legislation establishing student-athlete NIL rights, and California's Fair Pay to Play Act had been signed into law with an effective date of 2023. The patchwork was already arriving. The only question was whether the federal government would impose order on it or let it fragment into a state-by-state competition for athletic recruitment advantage.

The Counterargument Worth Taking Seriously

Not all opposition to NIL reform is bad-faith institutional self-protection. The strongest version of the counterargument runs as follows: paying student-athletes will erode the distinction between collegiate and professional sports, redirect institutional resources away from non-revenue sports, and concentrate athletic talent at programs willing to spend the most. Title IX compliance becomes harder. The walk- on athlete loses what little leverage they had. The educational mission, weak as it already was, becomes formally subordinate to the commercial one.

This argument deserves a serious response, not dismissal. The response is that NIL compensation is not salary. A student-athlete earning income from an endorsement deal is not being paid by the school. The school's budget is unaffected. Title IX, which applies to institutional expenditures, is not implicated by a third-party brand paying a gymnastics athlete to appear in an Instagram post. The concentration argument has more force, but it overstates the marginal effect: the programs that would attract the most NIL money are already the programs that attract the most athletic talent. The mechanism changes; the distribution does not.

The counterargument is strongest when applied to direct salary or revenue-sharing models. Applied to NIL specifically — the narrower question of whether athletes can profit from their own likeness — it weakens substantially. This is why the precision of the NIL framing matters. A reform that allows third-party endorsements, group licensing through player associations, and athlete-controlled social media monetization does not require any school to pay any athlete a salary. It only requires the school to stop prohibiting athletes from accepting payment from anyone else.

Why the State Patchwork Is Insufficient

The post-2021 reforms moved fast but unevenly. By 2024, every state with a major Division I program had passed some form of NIL legislation, but the statutes diverged in ways that created competitive distortions. Some states permitted school facilitation of NIL deals; others prohibited it. Some required NIL contracts to be disclosed to the institution; others permitted full athlete-side confidentiality. Some imposed academic performance requirements as a condition of NIL eligibility; others did not. A football recruit choosing between programs in different states was choosing not just between coaches and facilities but between legal regimes governing the most valuable commercial right they possessed.

Federal preemption would resolve this. A single national NIL statute covering all institutions in the United States would establish baseline rules on disclosure, school involvement, agent regulation, group licensing, and dispute resolution. The model exists in other contexts — the Sports Agent Responsibility and Trust Act itself is federal preemption of agent conduct rules. Extending the same approach to NIL governance would replace a fragmented marketplace with a coherent one.

The Stakes Beyond the Legal Argument

Behind the policy argument is a population of athletes whose circumstances the legal debate rarely surfaces. The median Division I athlete is not a future NBA draft pick. They are a student spending twenty to forty hours per week on athletics, often with restricted ability to work an outside job, and frequently from a family that cannot provide supplementary financial support. The athletic scholarship covers tuition and partial expenses; it does not cover the gap between the actual cost of attendance and the scholarship's nominal value, a gap that for many athletes runs into the thousands of dollars per year.

For these athletes — the overwhelming majority of NCAA participants — the pre-reform NIL prohibition was not an abstract restraint on commercial freedom. It was the legal mechanism preventing them from selling autographs, accepting payment for a local car-dealership ad, running a YouTube channel that generated ad revenue, or doing any of the modest revenue-generating activities available to every non-athlete college student. The NCAA's stated concern that NIL compensation would distort competitive balance applied with full force only to a few hundred athletes at the top of revenue sports. The rules applied to everyone.

The post-reform landscape has not solved this entirely. The high-profile NIL deals announced in the press — seven-figure collectives at major football programs — describe a small fraction of total NIL activity. The broader story is athletes at non-revenue sports who can finally accept $200 to appear in a local restaurant's advertisement, who can run monetized YouTube channels, who can sell instructional content to younger athletes in their sport. That broader story is the actual moral case for reform, and it is the case that survives every version of the amateurism counterargument.

Conclusion

The pre-reform NIL regime was not a defensible expression of amateurism. It was a regulatory transfer of commercial value from athletes to institutions, justified by language that the institutions themselves had ceased to live by. The state-level reforms that began in 2021 corrected the worst of the prohibition but produced a fragmented landscape that distorts competitive balance and burdens athletes with legal complexity that varies by jurisdiction. The case for federal NIL legislation is not that it would revolutionize college athletics — it would not — but that it would resolve the patchwork, preserve the existing institutional structure, and finally permit student-athletes to participate in the commercial market that has built itself around their names without their permission for the better part of forty years. The reform is narrower than its critics fear, and more overdue than its proponents usually admit.