Institutions begin paying student athletes following Alston ruling

Following the June 2021 Supreme Court decision in the case of National Association of Collegiate Athletics (NCAA) v. Alston, at least two universities have announced plans to pay student athletes.

The court’s ruling opens the door for institutions to provide direct financial support to student athletes while also allowing the NCAA to cap cash awards for “academic achievement” at $5,980 annually (i.e., the cash awards currently allowed for athletic achievement).

So far, the University of Mississippi (Ole Miss) and the University of Texas (Texas) are the only two institutions that have announced their plans to distribute payments to student athletes but others are likely to follow suit. Both Ole Miss and Texas are distributing awards of $2,990 in the fall and spring semesters to reach the maximum annual limit. However, the two universities have different eligibility criteria and academic requirements. For example, Ole Miss is offering awards to any student athlete, including walk-ons, while Texas plans to provide academic achieve awards to scholarship student athletes-only.

Potential implications to collegiate athletics

This announcement has obvious benefits for student athletes and the recruiting efforts of well-funded athletic programs. Institutions considering or planning to offer student athletes pay will need to ensure that the criteria used to determine eligibility provides for equity across genders and sports.

Providing additional awards to student athletes will likely put a strain on most athletic departments that will need to weigh their options and assess financial priorities before making a determination on the matter.

These decisions may also further support arguments in favor of classifying student athletes as employees for institutions that provide additional awards to their athletes.

Baker Tilly can help

We can help your institution take a proactive approach to evaluate the current state of your financial policies, processes and internal controls related to athletics to identify opportunities that align with potential funding distribution and allocation changes.