I grew up down south where college football is a religion.

I saw up close the power of Hoya basketball

when I went to Georgetown.

And now I've got a son set to play college lacrosse,

and that's giving me a whole new window into that world.

And as with everything, I see a business story.

Right now a first year lacrosse player

at a division three school like my son

and Trevor Lawrence,

Clemson's championship winning quarterback

and widely touted NFL star,

well, they have something in common.

Neither of them are allowed to be paid a dime

while they play sports at the college level.

And that may be about to change.

I think 2021 will be a pivotal year

for college sports for a lot of reasons.

We've been talking about

the potential tipping point in college sports.

This may be the time.

With the pandemic,

with the racial justice issues,

with the activity at the federal and state level,

with the activity at the Supreme Court,

that we say, this is no longer a sustainable model.

Schools are conspiring with competitors,

agreeing with competitors,

to pay no salaries to the workers

who are making the schools billions of dollars

on the theory that consumers want the schools

to pay their workers nothing.

After years of asking the question,

will paying college athletes destroy college athletics?

It looks like finally in 2021,

that question will be answered.

The tipping point is here.

College sports was built on the idea of amateurism.

More than a hundred years ago,

after the death of 18 students and injuries to 150 others,

the NCAA was formed as a nonprofit.

Its mission: to protect the lives of football players

by adding new rules to the sport.

The biggest being the advent of the forward pass.

One of the core tenets:

these were not professional athletes.

Amateurism is defined in the NCAA's 465 page manual

as being motivated primarily by education

and by the physical, mental, and social benefits

to be derived,

protected from exploitation by professional

and commercial enterprises.

In lieu of paying the players,

schools provide athletes with scholarships.

But today, between the college football championships-

Touchdown.

DeVonta Smith cannot be stopped.

And March Madness-

How about that?

The NCAA is a money-making machine,

with nearly $19 billion in revenue in 2019 alone.

And the students, they still don't get paid.

When and how did it get so out of control?

Like what was there a catalytic moment

or was this just a slow bleed as it were?

The explosion in revenues came from another

Supreme Court antitrust case called Board of Regents 37 ago.

Jeffrey Kessler is the co- lead counsel for the basketball

and football players who are suing the NCAA

for greater economic rights.

What happened in Board of Regents

is the Supreme Court ruled that the NCAA could not

restrict the broadcasts of college football

and had to allow the conferences

and the schools to compete with each other.

That led to an explosion in television revenues,

both in college football and then derivatively

in college basketball.

Rather than two networks broadcasting

a total of 14 college football games each week,

more than 15 networks carry nearly every college

football game on TV.

More games led to more ad revenue and events like-

LSU sits on the throne of college football.

The college football championship

brings in close to half a billion dollars

in revenue every year.

That revenue ends up influencing

how college sports is organized.

There was a great kind of realignment,

if you will, of a number of the major conferences.

This is Amy Privette Perko,

executive director of the Knight Commission,

an independent group that spearheads reform

in college athletics.

And that was really done to increase the footprint

of those conferences for the football TV market.

And what may work for the football TV market

may not be the best solution

for all the other sport programs.

While there are more

than 350 division one basketball schools,

they're only 130 in football,

also known as the football bowl subdivision, or FBS.

That's led to a great imbalance

in schools' athletic budgets.

FBS college football is the most powerful sport

in college sports from the standpoint of the finances

and shaping the entire landscape.

Because of the money in football,

you have athletic programs in division one

whose budgets are $5 million a year,

and they're competing in the same division in basketball

with universities that have athletic department budgets

of more than $200 million a year.

College football already rakes in money

hand over fist,

but the new playoff system is about to make it

more profitable than ever.

According to CNN, the 64 schools that compete

for a spot in that final game

brought in a combined $2.8 billion last season.

And with billions of dollars now coming

into NCAA programs, that money needs to be spent.

The phrase they use in economics

is rent seeking behavior.

This is my colleague, Joe Nocera,

a Bloomberg opinion writer and author,

who's been delving into the inequalities

of college sports for more than a decade.

That means money has to go somewhere.

And with division one basketball

and football being the lion's share

of where the revenue comes from,

the money goes straight back into those programs.

Where's it going to go?

It goes to the administrators.

It goes to the conference commissioners.

It goes to the coaches.

It goes to the assistant coaches.

It goes to the weight coaches.

It goes to these fancy buildings.

It goes to a new football stadium.

Nick Saban makes north of

five and a half million dollars a year.

Very simply, is he worth it to the University of Alabama?

Nick Saban's the best financial investment

this University has ever made.

About 45 of the 50 states where either

the basketball coach or the football coach

is the highest paid state employee.

However, there is one place

that money does not go.

They all say, well,

we can't afford to pay the players.

Of course you can afford to pay the players.

You've just chosen not to.

For years,

the NCAA has made two main arguments.

The first-

Well, they are paid.

We're here to educate them and help them grow as people,

but we're not here to help them

in terms of their financial gain.

The second being that paying players

would take away from college sports quote,

spirit of amateurism,

and some people do agree with those sentiments,

even some of the players.

I think on the financial side,

what the influx of, you know,

monetary incentives has done

is it's just made that process a little bit harder, right?

This is Kendall Spencer,

former track star at the University of New Mexico,

Olympic hopeful and the first student to ever sit

on the NCAA division one board.

I reflect on just ideally what I would want

a student athlete to be thinking about

when they were choosing their institution was

you know, where can I go

to not only get this great athletic experience,

and you know, maybe I'm trying to make an Olympic team

or maybe I'm trying to make the professional leagues,

but beyond that, where can I go

where I get what I need academically?

So that no matter what happens, I'm going to be successful.

Kendall and others argue

that this is actually what the current model accomplishes

for the vast, vast majority of athletes.

They say that reforms shouldn't unduly punish

those true student athletes in the process

of reforming a system that's been undermined

by two big money sports.

So for some, a strong education really is the

best compensation they can get for playing college sports.

But the money is hard to ignore,

and the pandemic made it even harder.

Tonight, the NCAA president says

there will be no fall championships

except for the college football playoff.

The money was so important for the universities.

They were going to play football, come hell or high water.

It didn't really matter

if the athletes got COVID.

They were going to play.

They'd always said, you know,

they're students first and you know, athletes second.

And they're there for an education.

So here you had a situation where most of the rest

of the university, in many cases, was not even on campus.

We reached out to the NCAA

about the health risks posed to players,

but they didn't respond.

And critics say that the canceling of one sport

but the continuation of another solely

because of financial reasons

makes the NCAAs amateurism argument moot.

The mythology that D one basketball

and FBS football was just like

another extracurricular activity,

as if it were, you know, rowing, you know,

or this or the newspaper or the drama club,

when in fact, these have become gigantic businesses

that are completely independent

of the educational mission of these schools.

And in college sports,

there was not only the argument that if we pay the players,

it will destroy the sport.

This is Gabe Feldman.

He's a professor of Sports Law at Tulane University

and overall expert on all things NCAA.

There was this added layer

that if we pay the players,

that will mean that much of the benefit will flow

to a relatively small number of players,

and the other sports will be hurt.

So we'll end up with college football

and maybe some men's and women's basketball,

but rowing and swimming and diving and golf and lacrosse,

that'll all collapse

because schools are struggling to make money.

So if the pandemic laid bare the importance

of college football revenue,

and the NCAA stood firm on not paying players,

could there be a middle ground?

I think there were plenty

of people who bought that argument,

accepted that we will do damage to college sports as a whole

if we provide compensation

for football and basketball players.

And so name, image, and likeness rights

were seen as I think, a compromise,

as a workable solution that would provide benefits

for college athletes.

Compensation for name, image, and likeness,

or NIL, doesn't involve colleges paying players

but does allow athletes to benefit

from their accomplishments

as the schools, conferences, TV networks

and others already are.