For the last decade, the NCAA has defended itself from a bevy of antitrust and intellectual property lawsuits brought by current and former college players. These lawsuits have asserted that college players should be compensated for their labor and for the commercial use of their names, images and likenesses in broadcasts, apparel and videogames. In suing, players have become more critical of their position in a multi-billion college basketball industry that generates massive revenue for the NCAA, conferences, colleges, television networks, apparel companies, athletic directors, coaches and many others except the players themselves. While making significant concessions in response to these lawsuits (such as allowing member schools to offer the full cost of attendance), the NCAA has largely been able to preserve core features of “amateurism”—its controversial system of rules that, as a means of distinguishing college sports from pro sports, denies college players opportunities for compensation beyond their athletic scholarships and related benefits.
The NCAA now faces the return of a different kind of challenge to amateurism: market competition by the NBA for the very best 18-year-old basketball players.
On Thursday, the NBA unveiled a new compensation plan for certain G League players. As first reported by ESPN’s Jonathan Givony, elite prospects who are at least 18 years old but who are ineligible for the NBA draft will be eligible to sign “select contracts” with G League teams. These contracts, which will become available next summer, will pay the player $125,000 for the five-month G League season. After the season concludes, the player will then become eligible for the NBA and G League drafts and accompanying pay scales.
Select contracts will also provide the player with high-quality health care benefits and access to developmental programs. The overarching goal will be to help the player transition into an NBA career. SI has learned that players will receive financial literacy instruction, post-care planning and other practical, basic business lessons for players who choose this path. Such lessons could pay major dividends to any young person whose extraordinary athletic talents position him or her to earn a great deal of money but only over a very limited window of life (the average NBA career lasts about five seasons and only a small percentage of players play professionally beyond their mid-30s).
A player who signs a select contract will obviously become ineligible to play in the NCAA. However, for that same reason, the player will gain more than his G League salary and employment benefits. He will also become free of NCAA rules that limit student-athletes’ endorsement opportunities. For instance, NCAA bylaw 12.4.4 prohibits student-athletes from using their name, appearance or reputation to promote a business. Without these and other restrictions that link eligibility to compliance with amateurism, a G League player can sign with an agent and negotiate endorsement deals with shoe companies, car dealerships and other third-parties. Further, he could decide to pursue college part-time while enjoying a pro basketball career or pursue college full-time after his basketball career ends. In either case, he would not be able to play on the college’s basketball team. But might have considerable earnings in hand and could focus on academics.
The rise and fall of prep-to-pro NBA players
G League select contracts are not intended to replicate NBA contracts or circumvent the collectively-bargained eligibility rule for the NBA draft. Under Article 10 of the current CBA, a draft-eligible player must be at least 19 years old. For American players, draft eligibility also requires that at least one NBA season elapse from when the player graduated from high school or, if he did not graduate, when his class graduated. In contrast, an “international player,” who is defined as a player maintaining a permanent residence outside of the U.S. for at least three years prior to the draft and one who has never played in a U.S. high school or college, has no educational requirement. This difference in eligibility requirements reflects that fact in other countries, basketball players can turn pro as teenagers, sometimes as young as 14. Basketball development is very different in the U.S. due to the popularity of college basketball and the longstanding system of amateurism.
G League select contracts, then, will be for players who would otherwise choose to attend college for one year and then turn pro—so called “one-and-done” players—and, less commonly, for players who would otherwise play professionally abroad as 18-year-olds and then seek the NBA (for example, New York Knicks point guard Emmanuel Mudiay “skipped college” by playing for the Guangdong Southern Tigers in 2014–15 and former Milwaukee Bucks point guard Brandon Jennings did the same by playing for Lottomatica Roma in 2008–09).
The “one-and-done” phenomenon has been around since 2005, when the NBA and NBPA collectively bargained an increase in the draft eligibility rule to 19 years of age. The rule went into effect in the 2006 NBA Draft. Prior to that point, players could declare for the NBA draft immediately following their high school graduation. LeBron James, Kevin Garnett, Kobe Bryant, Tyson Chandler, Dwight Howard, Tracy McGrady, Amar'e Stoudemire, J.R. Smith are among current or recently-retired NBA players who skipped college altogether.
Back in 2005, the NBA hoped that by raising the age limit, players would enter the league with higher skill sets and more maturity, and also be more immediately marketable to NBA fans. For example, when Carmelo Anthony entered the NBA in 2003 after playing one season at Syracuse, NBA fans knew of him since he was a star at Syracuse and the Orange had just won the NCAA tournament. Yet when Al Jefferson entered the NBA in 2004 after playing high school ball at Prentiss High School in Mississippi, he was largely unknown to fans.
The market failure of the one-and-done rule
Almost immediately, the one-and-done rule became a magnet for criticism. Many college educators found its underlying dynamic to betray the legitimacy of college education.
A one-and-done player enters college in the summer, takes and pass classes in the fall semester, and then drops out of school during the spring semester. The drop-out occurs following completion of the basketball season in March or April. The player leaves college to work with personal coaches and trainers on maximizing his prospects for the NBA draft. Stated differently, a supposed “degree-candidate” student-athlete earns only a semester’s worth of a college education, during which time his focus is—wisely for him—on basketball. He uses his semester plus in college mainly to develop his game and prepare for the following summer’s NBA draft. Due to salary slotting in the NBA draft, being drafted just one or two spots higher can be worth hundreds of thousands of dollars.
A G League player who receives financial literacy training and other practical business education during his select contract year will arguably “learn more” than he would have received in a semester’s worth of more random and less career-relevant college courses. Along those lines, given that colleges enroll degree-candidates who are typically expected to stay for three or four years, and take multiple semesters of courses, the idea that they would enroll students who they know only intend to stay for one semester reaffirms a larger critique: many colleges see basketball stars not as students but as revenue generators. Such revenue is generated through higher ticket sales and better TV ratings from a team that wins and has star players. It also comes in the form of improved opportunities for the college admissions staff to recruit high school students who are swayed by the chance to attend a college with a major basketball program and for fundraising staff who can better persuade alumni to donate when their alma mater’s basketball team is winning.
College athletes have also become more active critics about the conditions of their college enrollment and the feeling that they are being exploited. In 2014, a group of Northwestern University football players attempted to be declared employees which would have enabled them to unionize. Last year, Donald De La Haye, then a kicker at the University of Central Florida, tested the limits of amateurism with his popular YouTube channel, “Deestroying.” More recently, Lavar Ball launched the Junior Basketball Association which allows high school and college students to turn pro. Also, the on-going federal college basketball corruption trial makes clear that a number of star basketball players have been paid tens of thousands of dollars “under the table” as inducements to attend certain colleges and hold more favorable views about Adidas. Even the NCAA has been critical of the one-and-done rule. In April, the NCAA’s Commission on College Basketball, which was chaired by former U.S. Secretary of State Condoleezza Rice, urged the NBA and NBPA to develop alternatives to the one-and-done rule.
College basketball as an unnecessary means to NBA ends
Complaints aired by college educators, college students or others who opine on the intersection between college basketball and college education will not change the NBA’s business calculus. The league’s primary objective is to provide the highest-quality basketball and attract fans and sponsors; what happens in college is outside of the NBA’s control.
That’s not to say the NBA hasn’t benefited from “big time” college basketball. For decades, college basketball has served as a free minor league system for the NBA, just as college football has served as a free minor league system for the NFL. Whether colleges provide basketball players with legitimate means to learn, and whether high school basketball recruits receive NCAA rule-violating payments from sneaker companies, are not the NBA’s concerns. College basketball to the NBA is about player development.
Under Adam Silver’s leadership, the NBA appears to view the G League as a viable, if not superior, alternative to player development. Silver and his staff have substantially enhanced the G League and greatly improved conditions for G League players. Take the recent partnership between the NBA and Gatorade to re-brand the D League into the G League. That arrangement added marketing stature to the league and also empowered G League players to secure advice from nutritionists and other experts at the Gatorade Sports Science Institute (GSSI). Further, consider the NBA’s decision to raise G League player salaries in 2018 from $19,000 or $26,000 to $35,000, plus housing and insurance, for the five-month season. That decision made the G League more attractive to players who might otherwise play in Europe or in college. Also, in the current CBA, each NBA team can employ up to two players on “two-way contracts.” Under these contracts, players are paid different rates depending on whether they are “called up” to the NBA. Two-way players can earn over $200,000 through them (two-way players must be eligible for the NBA, meaning they can’t be 18-year-olds on select contracts).
The addition of select contracts fit the NBA’s paradigm of G League enhancement. To that end, the NBA is providing a different and appealing pathway to elite players who would prefer to play pro basketball out of high school and earn a six-figure salary (for only five months of work). Even if the NBA makes no claim to compete with the NCAA for premier basketball talent, by making the G League more enticing to players who would otherwise attend college for a year, the NBA invariably competes with the NCAA.
The NBA’s decision to recruit the best high school players will not only supply those players with six-figure salaries and other potentially lasting benefits. It also empowers NBA scouts to better scout those players. One NBA team executive tells SI that college basketball is played so differently from the NBA that it’s sometimes very difficult to project how well college talent will play in the NBA. G league teams, in contrast, use NBA plays and are coached by those with NBA ties.
Impact on the NBA age limit
It is widely expected that the NBA and NBPA will negotiate a change to Article 10’s draft eligibility rule in the next CBA. NBPA executive director Michele Roberts is an ardent critic of the current rule and Silver has signaled openness to changing it.
What might a changed NBA draft eligibility rule look like? It could simply restore the pre-2006 system (detailed above) where players could jump from high school to the NBA. This would be the cleanest and most straightforward change and also one embraced by the NBPA.
Alternatively, a changed eligibility rule might allow players to jump from high school to the NBA, but stipulate that those who decline must wait two years (whether those years be spent in college, the G League or in a foreign league). Such a restriction would be similar to the one found in baseball where players can declare for the MLB draft out of high school but if they elect to attend a four-year college, they must wait three years. This kind of restriction would prevent one-and-dones. However, it might unwittingly encourage players to not attend college: players may regard a two-year commitment as excessive since they would be delaying access to NBA free agency by up to two years. A two-year wait could substantially impact career earnings of “max-contract players” since that delay would impact when the player becomes a free agent not only for the first time in his career but also the second. If he’s perceived as slightly older or past the apex of his prime it could cost him money.
Still another possible NBA draft eligibility rule would be to adopt a system similar to the NHL, where drafted players can attend college and sign with an NHL organization at a mutually-agreeable point. The NCAA permits this arrangement most likely because the NCAA competes with the Canadian Hockey League—which consists of the junior hockey teams that make up the Ontario Hockey League, the Quebec Major Junior Hockey League and the Western Hockey League and which permits payments to players. Perhaps competition from the G League will lead the NCAA to a similar place.
Regardless of any new NBA draft eligibility rule, it is probably years away. The CBA runs through the 2023-24 season, with a mutual opt-out after the 2022-23 season. Although the NBA and NBPA could negotiate an amendment to the current CBA, typically leagues and players’ associations wait to make changes until they are part of a larger series of tradeoffs in a new CBA. Put more bluntly, the NBA will likely want “something” in return from the NBPA in return for a lower age limit—whether that “something” reflects players’ share of basketball related income, league ownership of player data, player drug testing or some combination of “things” is probably unknowable until everyone gets to the bargaining table years from now.
Most likely, then, the new G League select contract is a separate pursuit for the NBA and is not directly tied to possible changes to the NBA draft eligibility rule.
Impact on the NCAA and college basketball—including in their litigations with players
On the surface, the NCAA should be pleased by the NBA’s decision. The decision responds to the Rice Commission’s critique of the one-and-done rule by providing an opportunity for players to not become one-and-dones. Along those lines, in a statement released to media on Thursday, NCAA president Mark Emmert notes that “this change provides another option for those who would prefer not to attend college but want to directly pursue professional basketball."
The NCAA is probably also confident that many elite high school recruits will still view college basketball as the preferred option. Some of those recruits (and their parents) will value the chance to gain a college education from a top university. Such a perspective is sound, especially since only a fraction of a percentage of high school basketball players will ever make it to the NBA. The reality is that taking school seriously is almost always a smart move.
Other recruits will want to grow as persons in a college setting. College is a chapter of life like no other. To skip college may lead to more money, but it could also deprive someone of an important part of life development (of course, as noted above, college is not a “one-shot-deal”: someone can play pro hoops, make a lot of money and then attend college as an older and wiser student).
Still others won’t find G League life all that enticing. Traveling on buses, staying at motels and playing in unfilled arenas won’t be the same as playing before thousands of fanatic college fans at Cameron Indoor Stadium or being featured in a nationally-televised ESPN broadcast. To that end, it’s not clear that G League players are especially well positioned to land lucrative endorsement deals. G League games are broadcast on Facebook Live and some games appear on NBA TV and ESPNU, but the exposure level is nowhere near that enjoyed by players at elite programs.
More cynically, an elite high school player might conclude that he can still “get paid” by going to college. The college basketball corruption trial, as detailed by SI’s Dan Greene, reveals the frequency at which money finds its way to star players. While such payments are violations of NCAA rules, they still happen.
Nonetheless, other players will decide that NCAA amateurism just isn’t for them. And $125,000 for five-months of work is a sizable payment. Keep in mind, the median annual household income in the U.S. is $59,000 and the median annual starting salary for recent college grads from national universities is $51,000. In other words, a G League player on a select contract will earn more than twice as much annually than persons who are older and more educated than him, and he will earn that money in fewer than half as many months.
If the G League develops into a rival to the NCAA for elite players, the NCAA could decide to relax amateurism rules. It would also need to revisit some of its legal arguments. In the Alston v. NCAA case, which centers on whether the NCAA preventing schools from competing for recruits by offering market-based scholarships, the NCAA portrays itself as decidedly more appealing than the G League. In one brief, the NCAA wrote, “[D]espite the abundance of professional minor leagues such as Minor League Baseball and the NBA G League filled with very skilled athletes, none has ever attracted anything close to the popularity of college sports.” Will the NCAA need to alter its dismissive view of the G League? Only time will tell.
Michael McCann is SI’s legal analyst. He is also Associate Dean of the University of New Hampshire School of Law and editor and co-author of The Oxford Handbook of American Sports Law and Court Justice: The Inside Story of My Battle Against the NCAA.