One – “NIL”: A Score for Student-Athletes in their Fight for Name, Image, and Likeness Rights

Braedon B. Morrow

I. Introduction

Since its inception in 1906, the National Collegiate Athletic Association (NCAA) has prohibited student-athletes from promoting or endorsing a commercial product or service, even if they are not paid to do so.[1] Put simply, this means that student-athletes may not profit off of their name, image, and likeness (NIL) if they wish to maintain their NCAA eligibility.[2] For decades the system made sense; however, the current modernization of college athletics has given rise to the need for change. In its 2018–2019 fiscal year, the NCAA earned $1.12 billion in revenue, most of which was generated from its Division I Men’s Basketball Tournament.[3] In 2018, all Division I Football Bowl Subdivision schools earned revenues totaling $8.78 billion.[4] College athletics is no longer all about amateurism. Plainly put, it is now a multi-billion-dollar business that allows everyone to make money but the student-athletes themselves. Make no mistake, student-athletes receive several valuable benefits such as a full scholarship, room, board, healthcare, and a stage to showcase their talents to professional scouts, but a blanket restriction on the ability of student-athletes to make money from third parties is outdated and archaic. The issue ultimately boils down to fairness: all non-athlete college students can profit from their name, image, and likeness, but the students who are actually in the public eye, the student-athletes, cannot do so without losing their eligibility to compete.[5]

The realities of modern college athletics have led to growing public support for compensating student-athletes beyond a scholarship and the “full cost of attendance.”[6] Although the NCAA has resisted this change for many years, it is now beginning to embrace the notion that student-athletes should be able to profit from third parties for use of their NIL.[7] The idea stems from one’s general right to publicity.[8] Name, image, and likeness is a subset of the right to publicity, which is something that all people may capitalize on.[9] Leading this change are three states that have passed laws that prohibit a university from upholding any rule that prevents a student-athlete from earning compensation as a result of the use of the student’s name, image, and likeness.[10] Specifically, California’s and Colorado’s name, image, and likeness laws go into effect in 2023,[11] and a similar law in Florida becomes effective in July of 2021.[12]

As states begin to pass differing laws regarding name, image, and likeness, their lack of uniformity will create problems for the NCAA and universities.[13] For example, Florida’s law becomes effective in 2021, two years before any other state’s.[14] This law gives the State of Florida and its universities a huge recruiting advantage. In deciding which school to attend, top athletes will consider the money that they can make from their name, image, and likeness at Florida universities that they cannot make anywhere else.[15] Moreover, state legislatures are incentivized to create more lucrative NIL laws that give their universities a recruiting advantage.[16] To avoid these aforementioned recruiting disparities, the solution to this problem must come from Congress. Congress should pass legislation that creates uniform NIL laws across the country to ensure a fair and level playing field for college athletics.

II. State Laws Set to Go into Effect

California, Colorado, and Florida have each passed NIL laws, and many other states have proposed similar legislation. The California law, the “Fair Pay to Play Act,” is not about directly paying athletes; rather, it expressly forbids directly paying student-athletes.[17] Specifically, the Act allows an athlete to profit from their own image and to hire agents to navigate endorsement deals with third parties.[18] The Fair Pay to Play Act prohibits a college, university, or the NCAA from revoking scholarships or upholding a rule that prevents a student from receiving compensation relating to a student-athlete’s name, image, or likeness.[19]  This directly conflicts with what is allowed under NCAA rules, but as state law, it will supersede the NCAA rules, allowing compensation for name, image, and likeness in California.[20]

Similarly, the Colorado NIL law prohibits the prevention of a student-athlete from earning compensation for the student’s name, image, or likeness.[21] The Colorado law, however, requires that all NIL contracts be disclosed to the athletic director and that such contracts not conflict with any contract of the team for which the student-athlete competes.[22] Both the California and Colorado bills are set to go into effect on January 1, 2023.[23]

The Florida bill, by contrast, is set to go into effect July 1, 2021.[24] The Florida bill differs from the other two because it requires compensation to be consistent with market value to “preserve the integrity, quality, character, and amateur nature of intercollegiate athletics.”[25] It further restricts compensation in that it may not be provided in exchange for athletic performance or attendance at a particular institution, hindering the ability for boosters to promise large sums of money to recruits for endorsement deals.[26] Like the Colorado bill, it prohibits brand conflicts and requires disclosure of the contract with the university.[27]

III. Power 5 and NCAA Proposals for Reform

The NCAA recognizes the problems that 50 different NIL laws present.[28] In response, an NCAA subcommittee urged the NCAA to immediately engage Congress to ensure federal preemption of state NIL laws, to establish an antitrust exemption, to safeguard the non-employment status of student-athletes, to maintain the distinction between student-athletes and professional athletes, and to uphold NCAA values.[29]

In April of 2020, the NCAA released its working group’s recommendations for the creation of NIL legislation.[30] The NCAA’s main points were as follows: (1) NIL compensation should represent genuine payment for use of the NIL and not simply a form of payment for participation in athletics; (2) schools and conferences should play no role in a student-athlete’s NIL activities; (3) student-athletes should not be compensated for their NIL in situations in which they have no legal right to demand compensation; (4) schools or boosters should not use NIL opportunities as a recruiting inducement; (5) the role of third parties in NIL activities should be legislated; and (6) the modernization of NIL rules should not interfere with NCAA members’ efforts in the areas of diversity, inclusion, or gender equity.[31] Provided that these boundaries are established, the NCAA indicated that it would support NIL payments through third-party endorsements, including activities akin to social media influencers.[32] Ultimately, the working group recommended that the board permit student-athletes to receive compensation related to NIL, reject any approach to NIL compensation that would make student-athletes employees of their schools, and reaffirm the integrity of the student-athlete recruitment process so that the prospect of receiving NIL compensation does not exert undue influence on a student’s choice of college.[33]

In the same document, the NCAA addressed the issues raised by the players’ right of publicity.[34] Courts have repeatedly held that the broadcasting of sports does not violate one’s right to publicity; therefore, student-athletes have no legal right to demand NIL payment from universities for broadcasting the sport that they play.[35] Any NIL payments for broadcasting an athlete’s sport would be the equivalent of “pay for play,” which is something the NCAA continues to vehemently condemn.[36]

In addition to states, NCAA conferences have proposed NIL rules. In July of 2020, the Power 5[37] proposed its legislation governing NIL. This proposed legislation would not allow athletes to sign endorsement deals until they complete their first semester of college.[38] It would allow schools to bar student-athletes from entering into certain NIL ventures, and it would force student-athletes to make NIL contracts public.[39] The bar on certain endorsement deals exists to prevent violations of university standards or ones that conflict with institutional sponsorship agreements.[40] Disclosure is required to “prevent athletes from acting without sufficient information while also ensuring that deals are not recruiting inducements.”[41]

IV. A Congressional Call to Action

Stemming from a congressional bipartisan working group, Senator Marco Rubio introduced NIL legislation in June that has not garnered much support.[42] The proposed legislation requires any intercollegiate athletic association to establish, no later than June 30, 2021, “a policy that permits any student-athlete to earn compensation from a third party as a result of the use of the name, image or likeness of such student-athlete; and . . . obtain professional representation.”[43] The bill also requires that student-athletes disclose compensation to the institution of higher education in which they are enrolled and the related  intercollegiate athletic association.[44] The reasoning behind this mandatory disclosure is that it is necessary to preserve the amateur status of student-athletes, ensure appropriate recruitment of student-athletes, and prevent illegitimate activity concerning any third party.[45] Violations of the law would be treated as violations of a rule defining an unfair or deceptive act or practice prescribed under § 18(a)(1)(B) of the Federal Trade Commission Act, bringing enforcement of the bill under the jurisdiction of the Federal Trade Commission (FTC).[46] Potentially, the part of the bill with the greatest future implications is that “no cause of action shall lie or be maintained in any court against any intercollegiate athletic association.”[47] This clause gives the NCAA the blanket antitrust exception that it is asking for, and it even takes it a step further by even precluding all suit against the NCAA.[48] Finally, the bill expressly preempts all state laws relating to student-athletes’ ability to receive compensation from third parties for their name, image, or likeness.[49]

The bill has been criticized for many reasons, including its exemption of athletes from junior colleges (JUCO) and the National Association of Intercollegiate Athletics (NAIA), its enforcement procedures, its allowance of the NCAA to set its own NIL rules, and its near absolute bar on suits against the NCAA for infringements on NIL rights.[50] First, in the definitions section of the bill, JUCO and NAIA athletes are specifically exempted from the definition of “intercollegiate athletic association.”[51] Although athletics at these schools do not garner the same attention as NCAA schools, this lack of national exposure should not restrict a student-athlete from profiting off of their name, image, or likeness if a third party is willing to do business with them.[52] If a federal NIL law is passed, it should include all student-athletes, not just the student-athletes who attend major NCAA schools.[53]

Second, questions surround how the FTC will enforce the proposed legislation.[54] Currently, sports agents are regulated by state governments, not the federal government.[55] There is no national licensing structure for sports agents, and if the federal government cannot regulate the field effectively, the NCAA will end up policing the proposed law with no redress available to student-athletes.[56] Third, although the proposed legislation requires the NCAA to grant college athletes limited rights to their NIL, the bill leaves it to the NCAA to determine what types of deals it will allow.[57]

Lastly, the bill gives the NCAA an antitrust exemption for nothing in return.[58] Additionally, the bill’s provision under § 4(B) would prevent student-athletes from filing suit against the NCAA, ending one of the most powerful ways for college athletes to push for change.[59] As stated above, if the FTC is unable to properly regulate and the NCAA is the sole regulator of the NIL law, the NCAA may establish unfair limits on an athlete’s ability to profit from their name, image, or likeness with no form of redress for the players.[60]

On September 24, 2020, Representatives Anthony Gonzales and Emanuel Cleaver submitted the bipartisan “Student Athlete Level Playing Field Act.”[61] First, the bill includes express federal preemption of all state NIL laws.[62] The main reason for congressional action is to establish uniformity across the country, making this clause essential.[63]

Next, the bill will not affect the employment status of a student-athlete; therefore, college players will be unable to form a union and demand collective bargaining or direct payments from their universities.[64] In reality, however, the bill cannot preclude employment recognition, as student-athletes at private colleges are governed by the National Labor Relations Act, and student-athletes at public universities are governed by their state law.[65] Furthermore, under the bill, student-athletes are required to notify schools of an agreement within 72 hours after consummation of the agreement.[66] Like Senator Rubio’s bill, the FTC would be in charge of enforcing all aspects of the new law, raising some of the same issues discussed above of whether the FTC will prioritize enforcement of sports-related matters.[67]

The bill does not include any restriction on athletes signing deals with the competitors of sponsors of their school’s athletics, but it does allow for a school to prohibit an athlete from wearing clothing or gear with the insignia of any entity during athletic competition or at a university-sponsored event.[68] The bill not only prohibits boosters from directly or indirectly paying athletes as an inducement to enroll, but it also makes such payments unlawful, exposing the booster to civil, but not criminal, penalties.[69] Importantly, although the bill does not prohibit suit against the NCAA relating to NIL issues, it does specifically state that it does not provide for new causes of action under the Sherman Antitrust Act.[70] It is important to note that the proposed bill does not fully foreclose and exclude antitrust litigation; therefore, it maintains an antitrust cause of action against the NCAA.[71] By not fully excluding all causes of action, student-athletes will maintain some form of recourse for violations of the NIL rights.[72]

The Gonzales and Cleaver bill would create a 13-member commission tasked with the role of recommending legislative changes as the marketplace for college athletes becomes clearer and any unintended consequences emerge.[73] The drafters recognize that the bill wades into uncharted territory; therefore, the bill leaves enough room for trial and error. The commission would file annual progress reports to commerce committees in both the Senate and House of Representatives so that Congress could rewrite the law if necessary.[74]

Admittedly, one potential issue is setting a market rate for endorsement deals.[75] The bill does not make it clear how the FTC would distinguish between payments for an athlete’s value as an endorser versus their value as a recruit.[76] Gonzales believes that it would be impossible to legislate and determine the fair market value on every deal and that the market will establish itself over time.[77] Those individuals who value the idea of a free market can appreciate this idea; however, it is not hard to imagine a booster paying a top recruit an outrageous sum of money for a minor endorsement deal.[78] Although the possibility for abuse is present, the bill’s trial and error approach allows for prompt amendment.[79]

V. Conclusion: The Future of NIL Legislation

Currently, Senator Rubio’s bill does not have a co-sponsor.[80] There is no clear indication as to whether the bill will be revised, but as Representative Gonzales put it, a bill with a blanket antitrust exemption is “legislatively impossible right now.”[81] Put frankly, Senator Rubio’s bill needs improvements. Specifically, Congress will not likely pass a bill that contains a blanket antitrust exemption. In the day and age where professional athletes have the most bargaining power they have ever had, an NIL bill that gives all of the power to the NCAA is simply an insufficient solution. Senator Rubio’s legislative proposal does not empower student-athletes; rather, it helps the NCAA maintain their control.

Although many states and conferences have made their own strides to create fair NIL legislation, the Gonzales and Cleaver bill is the best balance of empowerment and enforceability.[82] It takes the Rubio bill and improves upon it drastically by giving more power and freedom to student-athletes. In the coming months, the bill will likely garner support, and hopefully, even greater improvements will be made. NIL legislation is long overdue, and it is refreshing to see real federal action to create nationwide uniformity.

 

 

 

[1] Rachel Stark-Mason, What name, image and likeness means for college sports. And how the NCAA is turning to student-athletes to navigate a path forward, NCAA, http://www.ncaa.org/champion/name-image-likeness (last visited Oct. 4, 2020) [https://perma.cc/AC8S-QRZ7].

[2] See id.

[3] National Collegiate Athletic Association, Consolidated Financial Statements (2019), https://ncaaorg.s3.amazonaws.com/ncaa/finance/2018-19NCAAFin_NCAAFinancials.pdf [https://perma.cc/GA7X-E7ED].

[4] Where the Money Goes, Knight Comm’n on Intercollegiate Athletics, http://cafidatabase.knightcommission.org/fbs?qt-where_the_money=0 (last visited Oct. 4, 2020) [https://perma.cc/4BYL-TPJ8].

[5] Chip Scoggins, It’s about time college athletes get paid for use of their name, image, or likeness, StarTribune (May 3, 2020), https://www.startribune.com/it-s-about-time-college-athletes-get-paid-for-use-of-their-name-image-or-likeness/570149061/ [https://perma.cc/E7MW-R83X].

[6] See S.B. 206, 2019 Leg., Reg. Sess. (Cal. 2019) (entitled “Fair Pay to Play Act”); S.B. 123, 2019 Leg., Reg. Sess. (Colo. 2019); S.B. 646, 2020 Leg., Reg. Sess. (Fla. 2020). Full cost of attendance is a new concept that allows for schools to pay student-athletes $2,000–$5,000 per year to account for miscellaneous expenses. Eric Prisbell, What is full cost of attendance for NCAA athletes?, USA Today (Aug. 17, 2014), https://www.usatoday.com/story/sports/college/2014/08/17/ncaa-full-cost-of-attendance/14200387/ [https://perma.cc/9BUZ-RHFL].

[7] NCAA Board of Governors, Federal and State Legislation Working Group Final Report and Recommendations (2020), https://ncaaorg.s3.amazonaws.com/committees/ncaa/wrkgrps/fslwg/Apr2020FSLWG_Report.pdf [https://perma.cc/BFC4-W8NS].

[8] Id.

[9] See id.

[10] S.B. 206, 2019 Leg., Reg. Sess. (Cal. 2019) (entitled “Fair Pay to Play Act”).

[11] Id.; S.B. 123, 2019 Leg., Reg. Sess. (Colo. 2019).

[12] S.B. 646, 2020 Leg., Reg. Sess. (Fla. 2020).

[13] Curt Weiler, NIL rules could give Florida schools recruiting edge, News Herald (May 5, 2020), https://www.newsherald.com/story/sports/2020/05/05/nil-rules-could-give-florida-schools-recruiting-edge/112599884/ [https://perma.cc/U2MY-E5YB}.

[14] S.B. 646, 2020 Leg., Reg. Sess. (Fla. 2020).

[15] Weiler, supra note 13.

[16] See id.

[17] S.B. 206, 2019 Leg., Reg. Sess. (Cal. 2019).

[18] Id.

[19] Id.

[20] See id.

[21] S.B. 123, 2019 Leg., Reg. Sess. (Colo. 2019).

[22] Id. By restricting whom the student-athlete may do business with, the bill seeks to avoid brand conflicts. See infra note 34.

[23] S.B. 123, 2019 Leg., Reg. Sess. (Colo. 2019); S.B. 206, 2019 Leg., Reg. Sess. (Cal. 2019).

[24] S.B. 646, 2020 Leg., Reg. Sess. (Fla. 2020).

[25] Id.

[26] Id.

[27] Id.

[28] NCAA Board of Governors, supra note 7.

[29] Id.

[30] Id.

[31] Id.

[32] Id. A social media influencer is someone who uses their social media following to generate ad-based revenue. For example, Clemson quarterback Trevor Lawrence has over 500,000 Instagram followers. This translates to a value of approximately $16,000 per sponsored post. Matt Hladik, How Much Trevor Lawrence Could Make For A Sponsored Instagram Post, The Spun (Apr. 30, 2020), https://thespun.com/acc/clemson-tigers/how-much-trevor-lawrence-could-make-for-a-sponsored-instagram-post [https://perma.cc/X6QS-H7EQ].

[33] NCAA Board of Governors, supra note 7.

[34] Id. A right of publicity requires third parties to obtain permission from an individual before making commercial use of that individual’s NIL. Id.

[35] Marshall v. ESPN, 111 F. Supp. 3d 815 (M.D. Tenn. 2015), aff’d, 668 Fed. Appx. 155 (6th Cir. 2016); Baltimore Orioles v. MLB Players Ass’n, 805 F.2d 663 (7th Cir. 1986); Dryer v. NFL, 55 F. Supp. 3d 1181 (D. Minn. 2014), aff’d, 814 F.3d 938 (8th Cir. 2016).

[36] NCAA Board of Governors, supra note 7.

[37] “Power 5” is a term for the five biggest NCAA conferences, in terms of revenue and national exposure, which includes the SEC, Big 12, Big 10, PAC 12, and ACC. Dennis Dodd, Power Five, NCAA are now officially adversaries, and a breakaway may only be a matter of time, CBS Sports (Aug. 3, 2020), https://www.cbssports.com/college-football/news/power-five-ncaa-are-now-officially-adversaries-and-a-breakaway-may-only-be-a-matter-of-time/ [https://perma.cc/FDL3-VYBT].

[38] Summary of “Student-Athlete Equity Act of 2020” (2020), https://www.keepandshare.com/doc5/27533/a5-summary-of-draft-legislative-language-21-pdf-178k?da=y [https://perma.cc/M2P8-P6CP].

[39] Id.

[40] Id.

[41] Id.

[42] Fairness in Collegiate Athletics Act, S. 4004, 116th Cong. (2020).

[43] Id.

[44] Id.

[45] Id.

[46] Id.

[47] Id.

[48] See supra Part II.

[49] Fairness in Collegiate Athletics Act, S. 4004, 116th Cong. (2020).

[50] Matt Brown, Marco Rubio’s NIL Bill Sucks, Extra Points (June 23, 2020), https://extrapoints.substack.com/p/marco-rubios-nil-bill-sucks [https://perma.cc/QVF6-62LN].

[51] Id.

[52] See id.

[53] Id.

[54] Id.

[55] Id.

[56] Id.

[57] Marc Edelman, Marco Rubio’s Fairness in Collegiate Athletics Act is Anything But What Its Name Implies, Forbes (June 22, 2020), https://www.forbes.com/sites/marcedelman/2020/06/22/marco-rubios-fairness-in-collegiate-athletics-act-is-anything-but-what-its-name-implies/#48187b6f4776 [https://perma.cc/29TW-M7KY].

[58] Id.

[59] Id.

[60] Brown, supra note 50.

[61] Student Athlete Level Playing Field Act, H.R. 8382, 116th Cong. § 2 (2020).

[62] Id.

[63] Michael Mccann, Latest NIL Bill Overrides States but Leaves Tax and Labor Questions Behind, Sportico (Sept. 29, 2020) https://www.sportico.com/law/analysis/2020/latest-nil-bill-overrides-states-1234613887/ [https://perma.cc/7UJJ-LDWG].

[64] Id.

[65] Id.

[66] Student Athlete Level Playing Field Act, H.R. 8382, 116th Cong. § 2 (2020).

[67] Id.

[68] Id.

[69] Id.

[70] Id.

[71] Mccann, supra note 63.

[72] See Student Athlete Level Playing Field Act, H.R. 8382, 116th Cong. § 2 (2020).

[73] Id.

[74] Dan Murphy, Bipartisan federal NIL bill introduced for college sports, ESPN (Sept. 24, 2020), https://www.espn.com/college-sports/story/_/id/29961059/bipartisan-federal-nil-bill-introduced-college-sports [https://perma.cc/9HDR-F5LY].

[75] Id.

[76] Id.

[77] Id.

[78] See id.

[79] See id.

[80] Brown, supra note 50.

[81] Eric Olson, Congressman: No NCAA antitrust exemption in athlete pay bill, The San Diego Union-Tribune (June 4, 2020), https://www.sandiegouniontribune.com/sports/national/story/2020-06-04/congressman-no-ncaa-antitrust-exemption-in-athlete-pay-bill [https://perma.cc/G8AH-4E9B].

[82] Murphy, supra note 74.

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