Overtime Elite League paying salaries to high school players

The NCAA hasn’t had a good year. First, they lost a Supreme Court ruling; then, in a rush to respond to the name, image, and likeness state laws some states had passed, the NCAA quickly pushed out their interim (NIL) policy across the league. Now a new league has formed targeting the very best high school basketball players and paying them a minimum of $100,000 a year to skip college and the NCAA altogether.

The new league is called Overtime Elite and is an offshoot of the distributed sports network Overtime founded by Dan Porter and Zack Weiner in 2016. It has been raising funds from some big names in technology, entertainment, and the NBA. Andreessen Horowitz, Jeff Bezos, Alexis Ohanian, Drake, Kevin Durant, and David Stern have invested in this company. The company has a valuation of about $250 million.

The idea is that in return for losing both high school and college eligibility, the players will receive $100,000 per year, a potential signing bonus, and a small number of shares in Overtime’s business. In addition, the students get health insurance and a personalized academic program with a focus on financial literacy and social media training. The student-to-teacher ratio is said to be 4:1.

With any new league, there is a high risk of it failing. The Junior Basketball Association (JBA), created by LaVar Ball, was an alternative to the NCAA. It didn’t last very long. The league played for one season, then effectively shut down after canceling a trip to China. The players were left unpaid and lost their college eligibility.

Overtime Elite is one of three similar, active leagues. The G League is the NBA’s minor league; it pays players up to $500,000 a year. The third startup is the Professional Collegiate League (PCL), which pays salaries between $50,000 - $150,000 per year. The PCL will also start its inaugural season this fall like the Overtime Elite League (OTE). The PCL plans to have about ninety-six players, and the OTE is shooting for thirty.

You are probably thinking, wait didn’t Kobe Bryant, Kevin Garnett, and LeBron James come directly out of high school into the NBA? Yes, but due to the NBA’s collective bargaining agreement, the NBA’s last year to draft players out of high school was 2006. Now high school players are not eligible for the draft until the year of their nineteenth birthday or one NBA season has passed since they graduated high school.

It will take a few years to determine where all of this is going. We are now in the Wild West years of college, and high school-aged athletes receiving compensation. One thing that hasn’t changed, the total number of NBA positions. Each year, only 1.2% of the NCAA Men’s basketball players are drafted by the NBA. A small portion of those make NBA teams, and the average NBA career is only four and a half years. So, the odds are firmly against a long, pro-career.