NIL Law & Pending Congressional Legislation

Introduction

The present state of name, image, and likeness (NIL) law is hugely important in sports and entertainment. With the rise of social media and the increasing value of personal branding, athletes and celebrities seek more control over their image and the ability to profit from it. As a result, legislation surrounding NIL rights has been a hot topic of debate.

Although the right of college athletes to monetize their name, image, and likeness has been a contentious issue for many years, the broader conversation is reaching a fever pitch as Congress entertains bills for a uniform approach—with some big names supporting the various petitions.

The Pending Legislation

Four new federal NIL bills have been introduced in Congress, encompassing a range of proposals to address the NIL rights of college athletes.

The College Athlete Economic Freedom Act

Sen. Chris Murphy, D-Conn., and Rep. Lori Trahan, D-Mass recently reintroduced the' College Athlete Economic Freedom Act'. This act has undergone revisions in 2023 to address issues that emerged with NIL over the last two years. It now includes a provision allowing international college athletes to fully exploit their NIL without infringing on their F-1 student visa status. 

The act also proposes a revenue-sharing model requiring universities and conferences to obtain a group license from athletes to use their NIL in any promotion, including media rights deals. The universities and conferences would then be obliged to notify athletes how their NIL was being used and the revenue generated from the deal, thus providing athletes with the necessary information to negotiate their share of the revenue.

Moreover, it proposes an unrestricted right for college athletes to market their NIL without restriction, limiting the NCAA, conferences, or universities from imposing any parameters on NIL deals. Athletes would also have the right to retain representation from attorneys, agents, collectives, player associations, etc. The act also introduces several penalties for the NCAA, conferences, or universities, including per se antitrust penalties, a private right of action for athletes to pursue civil claims, and the ability of the FTC to levy “unfair or deceptive practices” penalties. 

The bill doesn’t advocate a complete free-for-all, though, as there are counter-balances, such as the requirement that collectives register with the Federal Trade Commission and report all NIL deals to ensure no discrimination based on gender, race, or sport. 

This bill's endorsement comes from notable figures like UCLA quarterback Chase Griffin and Sydney Moore, a Division 1 Volleyball Player at Cornell University, emphasizing the critical need for economic freedom for college athletes.

Protecting Athletes, Schools, and Sports Act of 2023

On the other side of the spectrum is the Protecting Athletes, Schools, and Sports Act of 2023, introduced by Sens. Tommy Tuberville, R-Ala., and Joe Manchin, D-W.Va., which offers specific protections for universities, with some prohibitions on NIL activity and limitations on transferring. 

The act aims to relieve the NCAA, conferences, and institutions from liability for their efforts to comply with the legislation. It also intends to prohibit NIL deals involving alcohol, drugs, or conflicts with school and conference licenses. NIL deals considered inducements to attend or transfer to a particular institution would also be expressly prohibited. 

Furthermore, it mandates agents and collectives to register with a regulating body, and all NIL deals would have to be disclosed within 30 days, with a public-facing website publishing anonymized data (a similar requirement is found in the ‘College Athlete Economic Freedom Act’). 

The legislation has garnered support from NCAA President Charlie Baker, university presidents from West Virginia, Auburn, Alabama, and Notre Dame, as well as the Big 12 Conference and the Southeastern Conference. They underscore the importance of this legislation in ensuring the health and safety of student-athletes, increasing consumer protections and transparency in the NIL market, and protecting women’s and Olympic sports.

The Student-Athlete Level Playing Field Act 

Reintroduced by Representatives Mike Carey and Greg Landsman, the ‘Student Athlete Level Playing Field Act’ envisages a significant role for the Federal Trade Commission (FTC), requiring any deal valued over $500 to be uploaded to an FTC clearinghouse. It also mandates a program for registering agents working with student-athletes. It aims to ensure athletes are not considered employees, affecting certain cases and charges against the NCAA and some universities. 

Additionally, it contains provisions against recruiting inducements and preempts state laws regarding NIL, proposing a Covered Athlete Organization Commission to handle recommendations and dispute resolutions between athletes and athletic organizations or universities.

Noteworthy Contenders Lacking Big-Gun Support

The ‘College Athlete Right to Organize Act’ would grant college athletes the right to form labor organizations and collectively bargain for better NIL rights. This bill has gained significant support from athletes and advocates who believe that college athletes should have more control over their image and the ability to monetize it.

The ‘Athlete and Influencer Marketing and Empowerment Act’ is unique because it focuses on expanding NIL rights beyond college athletes. This legislation aims to allow all athletes and influencers to negotiate and profit from their image and likeness, regardless of their level of competition or affiliation. This bill has garnered attention from professional athletes and influencers who feel that current NIL laws do not adequately protect their rights.

Sen. Ted Cruz’s Draft Bill Discussion

Senator Ted Cruz has also been active in this legislative conversation, releasing a discussion draft of a bill aimed at codifying NIL rights for student-athletes. This draft aims to provide legal certainty for the roles of universities, conferences, and athletic associations while ensuring nationwide legal uniformity. However, the discussion highlighted the challenges in finding a federal solution to the NIL issue, with lawmakers noting the NCAA’s ongoing difficulty managing college athletes' NIL earnings.

Other Complications

Other stakeholders have also made themselves heard, such as the commissioners of the four HBCU NCAA leagues, who petitioned Congress to push NIL legislation in a way that would bolster their competitive stance. They advocate for a legal framework supporting their leagues in the evolving collegiate athletic landscape.

The Current State of NIL Law

Currently, the regulation of NIL rights varies from state to state. Some states, such as California and Florida, have passed legislation that allows college athletes to profit from their image and likeness. Other states have introduced similar bills but have yet to pass them into law. This patchwork of state laws has created a complex landscape for athletes and influencers who operate across state lines.

Additionally, the NCAA, the governing body for college athletics, has grappled with addressing NIL rights. In 2020, the NCAA announced it would allow college athletes to profit from their image and likeness. Still, the specifics of how this would be regulated and enforced were left up to individual schools and conferences. This has further added to the confusion surrounding NIL rights. NIL law is fractured, with states, individual institutions, and leagues all exercising control over NIL.

The Impact of Pending Legislation

If the pending legislation before Congress is passed into law, it would significantly impact the world of sports and entertainment. Athletes and influencers would have more control over their image and the ability to negotiate fair compensation for using their name, image, and likeness.

Furthermore, this legislation would provide a unified framework for NIL rights, eliminating the patchwork of state laws and creating a more consistent and fair playing field for athletes and influencers nationwide. It would also provide clarity and guidance for schools, conferences, and other entities currently navigating the complex landscape of NIL rights.

Wrap Up

The state of NIL law is a complex and evolving issue. A federal NIL law remains elusive, but with pending legislation before Congress, there is hope for a more unified and fair approach to NIL rights. Unfortunately, Congressional leaders have shown a mixed response towards the urgent push from the NCAA and colleges for a federal bill legislating NIL. During an annual gathering of college officials, Senator Ted Cruz mentioned that the odds were "60-40" in favor of getting the legislation done, reflecting the complex and evolving landscape of opinions and support for NIL legislation.

The dialogue on NIL legislation has evoked a significant level of interest and advocacy from various stakeholders. The NCAA President, prominent university athletic directors, sports leaders, and congressional leaders have all urged Congress to enact legislation regulating the NIL market in college sports. Some have testified in Senate hearings to express their viewpoints and concerns regarding the future of NIL contracts and the implications for college athletics. Because these hearings are underway and so many various bills are on the table, there is a substantial likelihood that something will come together—even if it doesn't dispose of every conceivable issue.

References:

Axe, Brent. "NCAA leaders urge Congress to regulate athlete compensation." The Hill, 2023.

Axson, Scooby. "NCAA asks Congress for help on athlete pay." UPI, 2023.

Berg, Madeline. "Four New Federal Proposals For College Athlete NIL Rights—And What’s Next." Forbes, 2023.

Berg, Madeline. "NIL Legislation: Here’s What’s In The New Federal Proposals." Forbes, 2023.

Best, Neil. "NCAA wants Congress to regulate pay for college athletes." Washington Examiner, 2023.

Congressional leaders talk NIL legislation possibilities at LEAD1. (2023). Sports Business Journal.

Congressional NIL hearing shows difficulty in finding federal solution. (2023). Sports Business Journal.

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Federal NIL Bill Remains Unlikely Legislation. (2022). Sportico.com.

Goff, Steven. "NCAA wants help from Congress in regulating pay for athletes." Inside Higher Ed, 2023.

HBCU Gameday. "HBCU leagues petition Congress for NIL help." HBCU Gameday, 2023.

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Smith, Michael. "NCAA’s NIL timetable could be slipping away." Sportico, 2023.

Smith, Michael. "Congress showing little interest in NCAA’s plea for NIL help." Sports Business Journal, 2023.

Watch live: Senate holds hearing on NCAA’s NIL contracts. The Hill.