In NCAA v. Alston, the Supreme Court held that the NCAA could not cap education-related benefits to the cost of attendance. In effect, this allows NCAA student-athletes to capitalize off their name, image, and likeness (NIL) without losing their “amateur” eligibility status.
Crucially, Alston opened the door for student-athletes to engage in commercial relationships and receive more than just media and recruiting attention for their performance in a multi-billion dollar industry. But what are the rules, and who is making them?
Presently, the NCAA requires student-athletes to comply with the NIL rules of the state where their college or university is located. As of July 2023, 31 states have enacted legislation which regulates NIL arrangements for NCAA athletes competing at member schools within the state’s borders. In states that don’t have legislation in place, colleges and universities are responsible for establishing their own policies within the bounds of the NCAA’s interim policy governing institutional involvement.
But many lawmakers – and the NCAA itself – are calling for federal oversight.
Representative Lori Trahan (D-MA) has argued that federal intervention is essential to establish a uniform standard that adequately protects NCAA athletes’ right to be compensated for their NIL. Without a uniform standard, proponents have noted, student-athletes have and will continue to face innumerable challenges. Among those challenges are the complexities of working out interstate deals and the overwhelming array of NIL policies that recruits have to interpret in the commitment process. Even further, the patchwork of state NIL policies will exacerbate the unlevel playing field, as necessary resources in navigating the recruitment process are disproportionately available to potential players from different socioeconomic backgrounds.
Despite a degree of bipartisan support for a federal NIL bill, Congress members have struggled to agree on a framework and have proposed a number of bills ranging from narrowly tailored NIL regulation to broader reform.
Two bills that are more narrowly tailored have gained great attention: The Fairness, Accountability, and Integrity in Representation of College Sports Act (FAIR College Sports Act) and The College Sports NIL Clearinghouse Act of 2023.
Chairman Gus Bilirakis (R-FL) proposed the FAIR College Sports Act, which seeks to “protect the rights of student athletes to covered compensation, to prohibit inducements and provide for transparency with respect to name, image, and likeness agreements, and to establish a committee for intercollegiate athletics.” The Act proposes the creation of an independent US Intercollegiate Athletics Commission (USIAC) which would set rules and registration requirements for student athletes as well as agents, boosters, collectives, and third-party licensees. The proposed USIAC would also provide guidance to athletes and collectives and follow appropriate disciplinary processes for noncompliance. While this proposed Act has drummed up some support, it still lacks some provisions that have been deemed essential by the NCAA and other lawmakers. Namely, it lacks provisions accounting for Title IX compliance, investment in athlete health and safety, and non-employee status.
The College Sports NIL Clearinghouse Act of 2023, sponsored by Senator Lindsey Graham (R-SC), would establish a clearinghouse with bite. The clearinghouse would take on the role of the NCAA’s central office to monitor compliance and levy fines, while also granting universities the power to limit the dominance of large NIL collectives by prohibiting athletes from entering into business relationships with any entity the institution expressly bans. Senator Graham’s bill has been subject to criticism on the grounds that the clearinghouse would essentially take on the role of the NCAA, but be exempted from antitrust law. Moreover, the establishment of a clearinghouse with enforcement power creates federal oversight, but it may be unlikely to succeed due to its lack of a designation that student athletes are not employees.
Other proposed legislation, such as the 2022 revamp of the College Athletes Bill of Rights, calls for broader reform.
The original 2020 College Athletes Bill of Rights was reintroduced by Senators Cory Booker (D-NJ), Richard Blumenthal (D-CT), Brian Schatz (D-HI), Ron Wyden (D-OR) and Alex Padilla (D-CA) with some modifications. The proposed bill stresses Title IX transparency and athletes’ health and wellness above most else. The bill places great weight on the promotion of gender equity, health and safety standards devised by the Centers for Disease Control and Prevention, and a medical trust to cover the costs of sports-related injuries. However, the proposed legislation fails to restrict recruiting inducements by allowing athletes to accept financial benefits “from any source.” As a result, athletes and existing university athletic boosters may, under the guise of NIL activity, skirt recruiting rules already in place for athletes’ protection and engage in problematic practices, which proposed legislation is seeking to eliminate.
Even with these proposed bills in circulation, the conversation is far from over. Two bipartisan bills have arisen in July 2023.
Senators Booker and Blumenthal released a discussion draft of a new bipartisan bill, this time joined by Jerry Moran (R-KS). The College Athletes Protection and Compensation Act of 2023 restates the medical benefits and Title IX compliance emphasized in the proposed 2022 College Athletes Bill of Rights, but goes further to prohibit the use of NIL deals as recruiting inducements. It likewise provides for a governing NIL clearinghouse and creates transparency requirements.
Additionally, Senator Tommy Tuberville (R-AL) has teamed up with Senator Joe Manchin (D-WV) to draft a bipartisan federal NIL bill called The Protecting Athletes, Sports, and Schools Act. The essential terms of the proposed act include the creation of a medical trust and the requirement that at least one semester of coursework be completed before an athlete can enter into an NIL deal. Unlike the other bills, the NCAA – rather than a clearinghouse – is granted central enforcement power and the authority to report violations to the Federal Trade Commission. Additionally, the senators’ plan requires all athletes to use a standard NIL contract created by the NCAA, report NIL contracts within 30 days of execution, and comply with schools’ restrictions on NIL deals in “vice categories.”
Though no federal NIL legislation has reached the voting stage, one thing is clear: there is an ongoing demand for some kind of federal framework to replace the present mishmash of NIL rules throughout the country.
Carly Wilson is a second-year law student at Wake Forest University School of Law. She holds a B.A. in History and Political Science from North Carolina State University. Carly is a Staff Member for Wake Forest’s Journal of Business and Intellectual Property Law. Upon graduation, she intends to practice business and transactional law.
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