When the NCAA released its 31-page proposal on name, image, and likeness (“NIL”) April 29, media outlets gravitated toward the big headline: The NCAA takes a step forward in allowing student-athletes to profit off their platform.
But headlines don’t often tell the whole story. Although the proposal was a step, there is still a long way to go before the NCAA succumbs to athletes earning money off their NIL. The NCAA continues to put conditions on NIL and is making -- what some people have called -- “pleas” to Congress to support the NCAA's position.
Two of the main pleas in the recent proposal deal with two distinct legal issues: antitrust exemptions and federal preemption. Several experts have written about the possibility of an antitrust exemption, including this article from antitrust expert Marc Edelman, who claims Congress would be “crazy” to grant an exemption to the NCAA.
But what about the possibility of preemption? First, it’s important to understand what federal preemption means. Art. 6, cl. 2 of the Constitution -- also known as the “Supremacy Clause” -- says the Constitution and federal laws “shall be the supreme law of the land” and that any state law contrary to the federal law is void. U.S. CONST. Art. 6, cl. 2.
The Supreme Court has recognized three forms of federal preemption: (1) Express Preemption, (2) Field Preemption, and (3) Conflict Preemption. See Arizona v. United States, 567 U.S. 387 (2012). Express Preemption arises when a federal law explicitly states that it preempts all contrary state laws. Field Preemption and Conflict Preemption are slightly more complex.
Field Preemption applies when a court finds that Congress has regulated so extensively within a field that there is no room for state laws. Even if a state law is complementary to a federal law, the court will find preemption if the field is largely regulated by Congress. For example, in Arizona, the court found a state-law immigration penalty was preempted by federal law because the federal government largely regulated the field of alien registration. 567 U.S. at 403.
Conflict Preemption involves two prongs: impossibility and obstacles. When it is impossible to to comply with both the state and federal law, then the federal law preempts the state law. The second prong, obstacles, says a state law will be preempted if it stands as an obstacle to achieve federal purposes. This prong is the most broad form of federal preemption and allows for debate. If the state law can be seen as disrupting the system Congress enacted, it could be preempted.
In this case, the NCAA’s “plea” for federal preemption makes sense and is more likely to be successful than an antitrust exemption. As of Feb. 27, only one state -- California -- has passed NIL legislation, but 25 other states have introduced a bill. Florida is likely the next state in line to pass legislation, which could take effect as soon as the summer of 2021 (although that timeline may be affected by the coronavirus).
The NCAA likely hopes Congress will pass federal NIL legislation that would expressly preempt any individual state laws, or at the very least, serve as Conflict Preemption. If Congress passes preemptive legislation, it would then void the current bill in California and any future state laws. A preemptive, strict federal NIL law is probably the NCAA’s best bet as of now.
A preemptive, liberal federal NIL law is not a bad scenario for student-athletes, though. It would give student-athletes NIL rights and also limit potential competitive disadvantages for states who are behind others in pursuing legislation. For example, if Florida passes a bill and it goes into force by the summer of 2021, one would have to believe Florida schools would receive quite the competitive advantage.
If no federal law is passed, states pursuing their own legislation could certainly push the NCAA to be more liberal with NIL and back off some of the conditions it is holding onto right now (such as student-athletes not receiving sneaker endorsements). The NCAA likely doesn’t want a situation where Florida or California schools receive large competitive advantages. That’s a sure-fire way to upset a lot of member schools, and -- maybe, just maybe -- lead many schools to leave the NCAA.