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Federal NIL bill could provide unity across state lines




There was no March Madness this year, but college athletics is going through dynamic changes. The upcoming seasons will be much different for obvious reasons, but if we fast forward to 2021-2022 season, it stands to be unique in its own right.

People typically have common-law or statutory rights to their name or image in connection with the sale of goods, services, and advertisements. However, for NCAA student-athletes, these rights have been limited until recently. As the NCAA rules are currently, Bylaw 12.5.2.1 prohibits athletes from accepting money from third parties in exchange for the use of their name, image, or likeness to promote a good or service.[1]

California Leading the Change

In 2019, Judge Wilken of the Northern District Court of California ruled that the prohibition of payments beyond educational limits violates antitrust laws.[2] This ruling was a major move forward in the fight for economic rights. It has paved the way for the rise in state laws allowing Name, Image, and Likeness (“NIL”) payments, as well as the NCAA’s new proposed rule changes.

In late April, the NCAA’s Board of Governors voted to approve proposed rule changes allowing players to receive compensation from their own sources, such as third-party endorsements, personal appearances, and social media influence.[3] However, use of university trademarks, logos, or other symbols related to the schools are not allowed.[4] This means that a student-athlete with an endorsement deal can be paid for a personal appearance or an advertisement, but they would not be permitted to wear anything that would make the school recognizable.

On July 1, Chamber of Commerce legislators discussed possible federal legislation to govern college athlete compensation, also referred to as NIL bills.[5] Several issues were raised during the hearing, such as: How many players will benefit from compensation? What will the implications be for athletic department budgets? The Commerce Committee hopes to create legislation to avoid confusion and conflicts across state lines.

NCAA Has Concerns About Parity

For the NCAA, there has always been four major concerns. First, the NCAA worries that the demand for college sports will decrease because athletes will lose their amateurism. Second, the NCAA is concerned about the quality of education and integration into academic communities.[6] Third, one of the major concerns is parity among schools and conferences because the larger markets will likely attract more talent, whereas the smaller markets could lose out. Will the schools in smaller markets still be able to attract top talent? Lastly, loss of revenue. The revenue flowing to players that previously flowed exclusively to schools has the potential to hurt athletic departments.

Athletes Hope To Participate in the Free Market

For the players, the upside is the window of opportunity to capitalize on their brands. Sponsorships will allow these student-athletes to begin their careers through entrepreneurship. The players would be given the same opportunity to grow their brands as their non-athletic counterparts who are starting businesses while in school. Additionally, the income could be used as an incentive for further education. The majority, if not all, colleges and universities have a business school, and the entrepreneurship could foster a new-found excitement for student-athletes. Moreover, these athletes can contribute to the local markets through their influence.

One thing is for certain: Change is coming soon. Many states have developed their own NIL bills, such as Florida, California, and Colorado. These bills are set to take effect as early as July of 2021.[7] The Commerce Committee definitely has its hands full with this issue as well as COVID-19 issues, but the legislators are hopeful that they have bills ready to come into effect in time for the 2021-2022 season when the new state laws are to take effect. This federal legislation will be beneficial to create a uniform system across the board that supersedes those state laws.

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Andrew is a rising second-year law student at Elon University School of Law.

[1] 2019-2020 NCAA Division I Manual, NCAA (August 1, 2019), http://www.ncaapublications.com/productdownloads/D120.pdf.

[2] Jeff Arnold, Despite Violating Antitrust Law, NCAA Continues To Justify The Unjustifiable, Analyst Jay Bilas Says, Forbes (March 9, 2019), https://www.forbes.com/sites/jeffarnold/2019/03/09/despite-violating-antitrust-law-ncaa-continues-to-justify-the-unjustifiable-analyst-jay-bilas-says/#1ae33f501e85.

[3] Barrett Sallee and Adam Silverstein, NCAA takes big step toward allowing name, image, and likeness compensation for endorsements and promotions, CBS Sports (April 29, 2020), https://www.cbssports.com/college-football/news/ncaa-takes-big-step-toward-allowing-name-image-and-likeness-compensation-for-athletes/.

[4] Board of Governors moves toward allowing student-athlete compensation for endorsements and promotions , NCAA (April 29, 2020), http://www.ncaa.org/about/resources/media-center/news/board-governors-moves-toward-allowing-student-athlete-compensation-endorsements-and-promotions#:~:text=The%20NCAA's%20highest%20governing%20body,their%20name%2C%20image%20and%20likeness.&text=The%20board%20emphasized%20that%20at,name%2C%20image%20and%20likeness%20activities.

[5] Ross Dellenger, Next Steps for a Federal Name, Image and Likeness Bill Coming Into Focus, Sports Illustrated (July 7, 2020), https://www.si.com/.amp/college/2020/07/07/ncaa-nil-athlete-compensation-senate.

[6] Alston v. NCAA, 958 F.3d 1239 (9th Cir. 2020).

[7] Ralph D. Russo, Florida Sen. Rubio introduces NIL bill to push NCAA changes, Detroit News (June 18, 2020), https://www.detroitnews.com/story/sports/college/2020/06/18/florida-sen-rubio-introduces-nil-bill-push-ncaa-changes/3216226001/.

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