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Last Updated on August 17, 2023
A flurry of new federal bills have been introduced to try to create uniformity in the marketplace for athlete’s monetization of their name, image and likeness. Currently, NIL operates under a patchwork of state laws, with only a few broad rules and guidelines from the NCAA. More recently, states have begun passing laws that prohibit the NCAA from even enforcing its NIL rules.
Although nearly a dozen bills have been introduced at the federal level over the past few years, none have ever made it out of committee. The new round of bills include some interesting provisions we haven’t seen before, but the fact that multiple bills with such varying priorities have been introduced illustrates that we still don’t have a consensus about what a federal NIL standard should look like.
Below, I break down the three bills introduced in 2023, as well as a draft bill for discussion that was made public.
College Athlete Economic Freedom Act
The College Athlete Economic Freedom Act was reintroduced by Sen. Chris Murphy, D-Conn., and Rep. Lori Trahan, D-Mass, who first introduced the bill in February 2021 prior to the NCAA’s rule change regarding NIL. The 2023 version, however, has added several new provisions to address issues that have become apparent as NIL has played out over the last two years.
International Student Athletes
A unique piece of their legislation is a provision that would allow international college athletes to fully exploit their NIL without any violation of their F-1 student visa status. Taking it one step further, the bill also protects international student athletes if college athletes are found to be employees.
Revenue Sharing
Another notable provision would require universities and conferences to obtain a group license from athletes for using their NIL in any kind of promotion, including through their media rights deals. Universities and conferences would have to notify athletes how their NIL was being used and the revenue generated by the deal so athletes would have the information necessary to negotiate for their share of the revenue. California has already proposed a bill that would require revenue sharing with athletes in its state.
Additional Provisions
Other specifics from the College Athlete Economic Freedom Act include:
- An unrestricted right for college athletes and perspective athletes (which would presumably include high school athletes) to market their NIL without restriction. This would limit the NCAA, conferences or universities from putting any parameters on NIL deals.
- Athletes could not be prohibited from retaining representation from attorneys, agents, collectives, players associations or others.
- Collectives would be compelled to register with the Federal Trade Commission and report all NIL deals in order to ensure there is no discrimination based on gender, race or sport.
- The NCAA, conferences or universities could be penalized in a number of ways under this bill, including through per se antitrust penalties (meaning if you meet the criteria, you are found liable without consideration of specific circumstances), a private right of action for athletes to pursue civil claims, and the ability of the FTC to levy “unfair or deceptive practices” penalties.
UCLA quarterback Chase Griffin endorsed the bill saying, “A unanimous Supreme Court, the Department of Justice Antitrust Division, and states across the country have emphatically recognized the right of college athletes to share in the economic freedoms that are the bedrock of the American Dream. At present, the United States Congress stands alone as the only governmental institution contemplating NIL legislation that will deprive over half a million college athletes the full measure of economic freedom currently enjoyed by our peers and every other American. For the past two years NIL has enabled college athletes, like me, to become small business owners, taxpayers, support the families that raised us, contribute to charities, and re-invest in the communities that we represent.”
Sydney Moore, a Division 1 Volleyball Player at Cornell University and advocate program lead at the VOICEINSPORT Foundation, supported the bill as well.
“Women-athletes, like me, are at our highest earning potential during our collegiate careers, thus it is imperative that NIL policy upholds the integrity of Title IX and informs us of our fair share. Additionally as a student-athlete of color, it is crucial that all athletes are protected regardless of their race or nationality.”
The Protecting Athletes, Schools and Sports Act of 2023
Sens. Tommy Tuberville, R-Ala., and Joe Manchin, D-W. Va., have introduced the Protecting Athletes, Schools, and Sports Act of 2023, which contrasts with The College Athlete Economic Freedom Act introduced by Senator Murphy and Representative Trahan in that it includes specific protections for universities, with some prohibitions on NIL activity and limitations on transferring.
This legislation is endorsed by NCAA President Charlie Baker, in addition to university presidents from West Virginia, Auburn, Alabama and Notre Dame, as well as the Big 12 Conference and the Southeastern Conference.
“This important legislation is a major step in the right direction to ensure the health and safety of student-athletes, includes key measures to increase consumer protections and transparency in the NIL market, and aims to protect women’s and Olympic sports,” said Baker.
Protections for Higher Education Institutions
This legislation would relieve the NCAA, conferences and institutions from liability for their efforts to comply with the legislation. It would also prohibit NIL deals involving alcohol, drugs or in conflict with school and conference licenses. NIL deals that would be considered inducements to attend or transfer to a particular institution are also specifically prohibited, although there’s no real detail on how inducement would be proven.
Transparency of NIL Activities
Under this legislation, agents and collectives would be required to register with a regulating body. Additionally, all NIL deals would have to be disclosed within 30 days, and a public-facing website would publish anonymized data.
This bill, like the The College Athlete Economic Freedom Act also mentions the FTC, allowing the NCAA to report violations to the agency to strengthen enforcement and oversight.
Limitation on Transferring
A unique provision of this piece of legislation is a limitation on transferring which doesn’t allow transfer without penalty until an athlete has completed their first three years of athletic eligibility, subject to a few exceptions.
Health and Safety
This bill also includes provisions aimed at the health and safety of athletes. It would grant athletes guaranteed health insurance for sports-related injuries for uninsured athletes for eight years following graduation. Institutions with more than $20 million in athletics revenue would be required to pay out-of-pocket expenses for two years, with those earning more than $450 million in revenue extended to four years.
Additional Provisions
Other notable provisions include:
- Collectives would be required to be affiliated with a university
- An assurance that nothing in the act would affect the rights of athletes under Title IX
- Establishing a Uniform Standard Contract for athletes to use for NIL deals
- Enhancing curriculum related to NIL, including financial literary and other legal and regulatory issues
Student Athlete Level Playing Field Act
In May, Representatives Mike Carey, R-OH-15 and Greg Landsman, D-OH-1, reintroduced the Student Athlete Level Playing Field Act, which was originally introduced by Representative Anthony Gonzalez in 2021.
FTC Involvement
This bill also contemplates involvement from the FTC, requiring deals for more than $500 to be uploaded to an FTC clearinghouse that would be established. In addition, the FTC would be tasked with creating a program to register agents, which agents would need to register with prior to working with student athletes.
Employment Status
In addition to banning recruiting inducements, it would also ensure athletes are not considered employees, impacting both the Johnson v. NCAA case and the NLRB’s charges against the NCAA, the Pac-12 Conference and the University of Southern California.
Additional Provisions
- Athletes would have to be enrolled at a school before entering into an NIL deal with a booster in order to prevent inducement.
- State laws are all preempted and cannot be enforced relative to NIL.
- Creation of the Covered Athlete Organization Commission, which would consist of current and former athletes, administrators, athletic directors, coaches and other professionals, to make recommendations to Congress and establish an independent dispute resolution process for disputes between athletes and an athletic organization or university.
College Athletes Protection and Compensation Act of 2023
Sens. Richard Blumenthal, D-Conn.; Jerry Moran, R-Kan., and Cory Booker, D-N.J. announced a bipartisan discussion draft for the College Athletes Protection & Compensation Act in July. In addition to provisions aimed at NIL, it also addresses health and safety concerns.
Central Oversight
This legislation calls for the creation of the College Athletics Corporation, a central oversight entity tasked with creating and enforcing rules and standards to protect athletes entering into NIL deals.
Health and Safety
A Medical Trust Fund would be created to cover out-of-pocket expenses for injuries and other long-term issues arising from the athlete’s participation in sports. Additionally, institutions would be required to cover tuition, books and other fees until an athlete graduates, even if the athlete had a career-ending injury or was cut from the team.
Additional Provisions
- Health and safety standards would be created aimed at preventing serious injury, mistreatment, abuse and death.
- Schools would be required to report revenues and expenditures of each athletics program, including the average number of hours the athletes spend on athletic participation and academic outcomes and majors for all athletes.
- Athletes would be required to participate in education related to financial literacy, including personal budgeting, debt, credit, interest rates, contracts, tax liability and other issues related to their NIL income.
- Male and female athletes must have access to the same facilities and services during tournaments.
It remains to be seen which of these bills, and its backers, can garner enough support to get it out of committee and up for a vote in one of the chambers. With Congress heading into recess in August, it could be a while before we know.
I originally published this piece on Forbes
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