PayPal has signed agreements with two major NCAA conferences, the Big Ten and the Big 12, to allow student-athletes to receive compensation through its platform.
According to CBS Sports, PayPal will pay the Big 12 nearly $100 million over five years. No comparable figure was reported for the Big Ten, but given it is a more prestigious conference with more schools, the amount is likely higher.
The company also noted that students at some colleges will have the option to pay their tuition using PayPal. This is separate from the issue of athlete compensation, as most athletes receiving money from a college are likely on scholarship. However, it gives PayPal added leverage in encouraging colleges to begin accepting PayPal for tuition payments.
Visibility at the National Level
This move positions PayPal as a national rival to Visa and Mastercard in the payments space. When a Big Ten school like Ohio State lands a top recruit, instead of the traditional giant cardboard check, they can now present the athlete with an oversized debit card featuring the PayPal logo.
“When Alex Criss took over as CEO of PayPal, he was given a mandate to restore the brand to a leadership position in financial services,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “This is a page out of the Visa and Mastercard playbook, using high-profile sponsorships like this to elevate the brand and drive awareness.”
PayPal had been pursuing college football partnerships since last year, when it tried to buy the naming rights for the Big 12. Venmo, a subsidiary of PayPal, will serve as the presenting partner of the Big Ten’s Rivalry Series and as an official partner of the Big 12’s championship events.
More Conferences to Come?
The announcement followed a court settlement two weeks ago that, for the first time, allowed schools to compensate student-athletes. Under the agreement, individual schools may distribute up to $20.5 million to current athletes over the next year, along with up to $2.8 billion in back pay to former players. Most of that money is expected to go to football and basketball players, who generate the most revenue in college sports.
Big 12 Commissioner Brett Yormark told CNBC’s “Squawk Box” that he expects other conferences will soon partner with PayPal as well. The Southeastern Conference and the Atlantic Coast Conference remain the only two college football power conferences yet to join.
