You’ve probably heard of the butterfly effect. To put it as simply as possible, the point is that the flapping of a butterfly’s wings in Kamchatka can affect a hurricane in, say, the Moscow region. Zalgiris coach Andrea Trinchieri and Euroleague general manager Paulius Motiejunas are already sounding the alarm, complaining that the NCAA’s ability to make money for students would ruin the European basketball market. Apparently, how are the so-called Cooper Flagg and the Euroleague related? However, it is all about the butterfly effect. Sometimes it can appear where you least expect it.
Major changes are coming to American college sports, and basketball in particular, with the introduction of the Name, Image and Likeness (NIL) policy. College athletes will now be able to reap maximum benefits. The innovation simply cannot fail to affect the actors themselves, educational institutions, and the industry as a whole. NIL marks a departure from the traditional model of amateurism in college sports.
Connecticut is the winner of March Madness – 2024
Photo: Christian Petersen/Getty Images
Previously, athletes were prohibited from receiving salaries or monetary benefits beyond the established stipend. These rules have been criticized for many years. Largely thanks to them, young and bright prospects entered the NBA earlier than expected. The league received unprepared players who preferred to earn money faster in professional careers than in college.
In addition, the NCAA and universities received significant revenue from the performance of their basketball players when they earned virtually nothing. A stipend, food, a small room on campus – all of this is certainly good. But a prodigy star like Zion Williamson collected much more than he actually cost the university. Take, for example, the most publicized event of the season: March Madness. The final phase of the tournament always attracts huge interest from spectators and sponsors. The media potential of the event is enormous, and the funds received from television contracts amount to hundreds of millions of dollars. Basically, March Madness feeds the entire NCAA.
Because of the existing inequality, sponsors who spot young talent have been looking for different ways to circumvent the bans for decades. Shouldn’t a student sign a contract with a shoe manufacturer? We give them to him for free, let him play and promote our brand. The NIL has opened up lucrative opportunities for college basketball players. Athletes now have a long-awaited chance to secure sponsorship deals and monetize their social media presence. They now have an incentive not only to perform at a high level, but also to earn money. At the same time, their universities did not escape unscathed. The increased activity of young ambassadors should logically lead to increased recognition of their teams.
March Madness Match 2024
Photo: Jamie Squire/Getty Images
In addition, the NIL policy has provided young basketball players with valuable experience in managing personal brands and entrepreneurial projects. By entering into advertising deals, they gain essential skills in marketing, negotiations, and financial management. The rules set the only general restriction at the student level. Advertising contracts cannot be used to recruit schoolchildren for a particular educational institution. In addition, universities are challenged to provide their prospects with comprehensive educational support in financial literacy. Once upon a time, the NBA followed this path, where at the turn of the century the number of bankrupt ex-millionaires began to grow rapidly.
In short, the new trend has led to innovative marketing collaborations between players, brands, and universities, increasing the commercial appeal of college basketball as a whole. It is no surprise that basketball players en masse sought out various deals. For example, yesterday’s student Bronny James’ endorsement contracts alone are estimated at nearly $6 million. Other prospects don’t get paid that much. Maybe it’s because his father isn’t LeBron James, but among the top 5 highest-paid basketball players in the NCAA, no one earns less than $1 million in endorsements.
Now back to European basketball. Motiejunas and Trinchieri’s statements are primarily about the fact that it will simply not be profitable for young players from the Old World to develop in Europe and for clubs to raise them. Their position is understandable, because a team can invest in a player for years, but when he approaches the adult level, he will move abroad, where conditions are better and the dollar is greener. Euroleague general manager Motiejunas reiterates this, noting that salary changes in the NCAA are breaking the market and the motivation of European clubs to train young players is disappearing.
Recently, the Euroleague introduced innovative rules for financial fair play, establishing a salary cap and a luxury tax. The successful example of the NBA shows the feasibility of such an idea, however, the specifics of the continental tournament greatly blur the possibilities of regulation. The Euroleague has teams from different countries, with different capabilities and different financial legislation. Of course, the United States also has different states, but there it is even easier to unify regulations.
Shane Larkin, 2023/2024 Euroleague season
Photo: Tolga Adanali/Getty Images
The situation of European basketball players leaving their comfort zone and moving to the NBA is not new. According to last season’s data, the highest-paid player in the Euroleague was Anadolu Efes guard Shane Larkin, who earned $4 million a year. Behind him, at $2.8 million, is Kostas Sloukas of Panathinaikos. For comparison, on one of the NBA’s worst teams, players who are not the most important receive more or less comparable money. Charlotte veteran Taj Gibson is guaranteed $2.1 million next season, while junior Nick Smith, who has only one season averaging six points per game, will see a cap hit of $4.1 million.
With the introduction of NIL, NCAA students, including our talented Egor Demin, have unprecedented opportunities for income and personal advancement. On the one hand, this is fair. On the other hand, there is a risk that a career will be ruined by the first earnings, when an athlete simply stops working hard because he is already managing large sums of money. And yes, the rules adopted even for a professional league abroad cannot change the basketball landscape in Europe.
Our young basketball player is in the NCAA:
Egor Demin is our basketball genius. In a year you will understand why.
