Chapter 7: Commercialism
As with universities as a whole, athletics programs are trying to find new sources of revenue to keep up with expanding costs and are looking to the commercial world for assistance. The fast-evolving world of sports business includes event promoters, television networks, marketing firms, ticket brokers and sponsors from all sectors of the corporate world, creating new questions about intellectual property for both the institution and the student-athlete, the appropriate distance between athletes and commercial presence, and the ability to maintain amateur athletics in a commercial marketplace.
Ticket sales and donations aside, television revenue and marketing dollars are the largest paths to sizable revenue. The Southeastern Conference (SEC) is an example of success on the broadcast front. In 2009, as noted earlier, the SEC’s 12 member institutions shared $132.5 million in conference-generated revenue, or about a four percent increase over 2008 (Southeastern Conference, 2009). Each school received an average of $11 million. The key sources of revenue within the $132.5 million were $52 million from football television; $25.4 million from football bowls; $14.3 million from the SEC football championship game; $13.6 million from basketball television; $4.1 million from the SEC men's basketball tournament; and $23.1 million from NCAA championships. With its most recent contract in place, the SEC is expected to distribute upwards of $200 million annually to its institutions in future years.
As athletic programs seek more commercial funding, they must balance that objective with the principle of protecting athletes from commercial exploitation. This tightrope act has become more difficult.
Recently, a major trend among big-time institutions is the outsourcing of marketing, promotions, and sales to professional agencies. Those agencies, including IMG College, Learfield Sports, and ISP, guarantee athletics departments millions of dollars, and then sell a university’s sports marketing inventory to corporate sponsors and broadcast partners. Even in this widespread commercial practice, the “haves” and “have-nots” benefit at different orders of magnitude. According to USA Today, in 2009, Ohio State University signed a deal with IMG guaranteeing the Buckeyes’ athletics department $11 million a year for 10 years in marketing revenue; for that $110 million, IMG will then perform all the work selling in-stadium signs, coaches’ radio and TV shows, and other corporate sponsorships (Perez & Berkowitz, 2009). By comparison, Utah State University recently signed a 10-year deal with Learfield for a total of $7.7 million. Utah State will receive less money over a period of 10 years than Ohio State will each year.
As athletics programs seek more commercial funding, they must balance that objective with the principle of protecting athletes from commercial exploitation. This tightrope act has become more difficult with legal challenges that allege current commercial products licensed by the NCAA violate athletes’ publicity rights. Recently, athletes and former student-athletes have sued the NCAA and its commercial partners claiming their names and likenesses are being exploited without permission and compensation. As reported in the New York Times, college quarterbacks’ jerseys numbers, height, weight, hair color, passing styles, home towns and other characteristics appear in EA Sports’ NCAA Football 2009 video game, although their names are omitted (Thomas, 2009). In the suits brought by current and former football and men’s basketball athletes, players charge they are being exploited; their likenesses are generating revenue for the NCAA and the game manufacturer, but not for the student-athlete himself.
The lawsuits raise critical questions at a time when the NCAA is considering changes to its rules that could allow for greater use of athletes’ images and names by commercial partners. The NCAA’s governance group regulating amateurism recently has examined the effects of new media issues – such as webcasts and statistics distributed on mobile devices – on the commercialization of student-athletes. Legislation is expected to be introduced to NCAA members that could deregulate in some ways the use of athletes’ likenesses and names. A "Commercial Activities Oversight Committee” has been proposed to track and make decisions in this area (Hosick, 2009).
The NCAA has attempted to frame the issue by proposing a bright-line distinction between the “amateur” model of intercollegiate athletics and the professional model used by big-league sports. NCAA vice president Wallace I. Renfro noted in 2008 that for years, colleges and universities “have encouraged intercollegiate athletics to seek outside sources of revenue as a means of diminishing institutional subsidization . . . The problem is that we mistakenly extend the concept of amateurism to the enterprise itself. To be clear, student-athletes are amateurs. Intercollegiate athletics is not.”