NIL on the Hill

Name, image and likeness rights (NIL) for college athletes were debated on March 29, 2023 at the House Energy and Commerce Committee hearing, "Taking the Buzzer Beater to the Bank: Protecting College Athletes' NIL Dealmaking Rights."

Committee Chair Cathy McMorris Rodgers (R-WA) noted in her opening remarks that the Supreme Court's 2021 ruling in American Athletic Conference et al. v. Alston et al., "...could not have been clearer. The NCAA was overly restrictive in its prohibition of athletes profiting from their NIL. Unfortunately, the Supreme Court's ruling did not offer clear rules of the road."

Rodgers has the pragmatic point of view needed to help Congress pave this long overdue road.

"Not unlike other challenging issues before this committee, the patchwork of state laws is confusing for athletes, schools, and conferences alike," Rodgers said. "It is unreasonable to expect student athletes to balance their studies with navigating a maze of complex and conflicting laws."

There is bipartisan support for action and a general willingness to act. However, passing meaningful federal legislation that maintains the integrity of collegiate sports, while also finally enabling student athletes a fair assessment of their market value, is a monumental undertaking. Remember, one of the stakeholders is the NCAA and despite recent beatings at all levels of our courts, they now have analysis paralysis. The House is just a starting point and it would need to find common ground with the Senate to close out vexing state-by-state rules.

NIL in the States

There is currently "NIL entropy" at the individual state level. Texas, for example, says that with the athlete's permission, the school can share player's information and publicize the NIL deal. That promotion helps both the recruiting school and the athlete, whereas other states are not as liberal in their policies. South Carolina does not allow using school colors, marks, or logos in their athletes' NIL deals, whereas Louisiana allows it, so long as the use of the colors enhances the school's reputation.

Athletes in some states with NIL laws can use professional services like consultants, brand managers, lawyers and accountants. West Virginia, on the other hand, prohibits family members from holding related accounting roles.

Ultimately, the NCAA told colleges across the country to put in their own NIL playbook if a player attends a college or university where the state has not passed any NIL laws. The NCAA NIL general rules boiled down to:

1. Don't pay college athletes for their on-field performance.

2. Don't pay a player to come to your college.

3. Don't set up or play matchmaker with athletes, sponsors, and boosters

4. Keep a log of all NIL deals.

Where states did pass NIL laws, athletes, agents, representatives, schools, and regulators are all drilling down to flush out reasons that coming to play in their state is a better financial bet for the athlete.

Elements of an Effective Federal NIL Framework

A federal NIL framework will set a precedent for future generations and truly promote equity among schools and players. To begin with, such a framework would eliminate the aforementioned cacophony of rules and states' ability to pass lenient laws to their neighbors' detriment, thus highlighting NIL as a recruitment tool. This is one of the many state-by-state nuances we see now, and replacing college-written guidelines with a uniform code, bill, or act, would level the landscape.

A federal bill could also eliminate the disparity with current compliance issues, and address concepts such as:

1. The definition of "amateur status."

2. Is the NIL deal commensurate with real market value, or is it a hidden "pay to play" or "play to come" scheme?

3. How and who will govern high school athletes and will international student athletes with a Visa be able to earn NIL compensation?

4. Will scholarships be taxable now that athletes are earning NIL compensation?

5. Will agents, representatives and advisors be subject to federal or state vetting and licensing?

6. Will co-licensing and group licensing be allowed?

7. Will the NCAA be required to pay for college athlete insurance for 5 years after graduation?

8. Who will enforce booster, pay-for-play, and pay-to-come violations?

9. Will college athletes get a seat at the federal level with a voting voice on NIL issues, laws and rules?

10. Will the NCAA explore college athletes' suicides, mental health needs, fatal athletic accidents, and sexual abuse by trainers and doctors, as well as provide real help?

Legal Play Options

Several bills have been proposed by various members of Congress in an effort to kickstart a federal framework that would address issues of taxation, players' health and safety, and the extent of NIL rights.

The best bills incorporated the most practical ideas from both sides, allowing the players to choose while also maintaining some of the dignity that ought to accompany the privilege of entrepreneurship.

In 2021, Rep. Anthony Gonzalez (R-Ohio) and Rep. Emanuel Cleaver (D - Missouri) introduced the "Student Athlete Level Playing Field Act" (LPFA), which established a middle ground. For example, it did not feature NIL disclosure requirements of athlete contracts, and would also prohibit sin categories like tobacco, gambling, or alcohol while benefiting from an NIL deal.

At the outset, these seem like reasonable rules that could be amended when extreme or unforeseen circumstances arise. Plus, Gonzalez acknowledged that having an all- encompassing bill could not factor in every possible unintended consequence, and that the proposed law would create a 13-member commission charged with making recommendations to legislators.

"The fair market value question came up in a handful of conversations," Gonzalez told ESPN in 2020, prior to bringing the bill to a first vote. "We didn't feel like we could legislate and determine fair market value on every deal. My sense is the market will establish itself over time and it'll take care of itself."

The Fate of the NCAA

In 2022, the NCAA seemed to indicate that it would also support LPFA. However, no one seems particularly concerned about violating their interim policies, and very few stakeholders seem bent on restoring their former glory (or chokehold, depending on the viewpoint).

Revenue numbers don't lie. Collegiate play generates billions of dollars annually for everyone except the very players we buy tickets to sit down to watch. Front Office Sports reported in April that the NCAA Women's National Championship attracted 9.9 million viewers, which was more than several other marquee sports events, including the 2021 NBA Finals and "any Stanley Cup game since 1973." Yet, our collegiate women athletes get second class promotion and tired workout facilities at their tournaments.

Coaches and staff have earned millions and the schools profit enormously through broadcast and merchandising rights. Now that college athletes have the support of federal agencies like the NLRB and the Supreme Court, the NCAA has realized it must enter the dialogue to help provide some guidance and ultimately to save face. It's about time...isn't it?

The Road Ahead

A good dialogue was had but the time for talk has passed, and action must be taken before too many players inadvertently jeopardize their futures due to bad deals or sketchy advice.

Some legislators at the March 2023 hearing were former college athletes now living back home with enormous college stadiums and programs that generate hundreds of millions of dollars in revenue, taxes, and jobs for their state. While the ideologies and politics of each state vary between conservative, liberal and independent, they all understand the power of money and how to direct revenue and marquee players to their state.

Today, the best way to legitimize these revenues is to reassess proposed bills, find common ground, and pass meaningful legislation that will protect future generations of college sports talent. Our collegiate athletes have been earning for others for over a hundred years and the time to act is now.