By: Seth Corwin
Since 1964, the NCAA has referred to its collegiate athletes as “student-athletes”, a term that defines NCAA athletes as students first and athletes second. Since then though, the NCAA has grown immensely both in membership and in revenues. In 2019, the NCAA made $1.05 Billion from its annual March Madness tournament. While much of this goes to smaller Division I schools, as well as Division II and III schools, the NCAA currently does not allow any of its student-athletes to profit via payment or endorsements using their name, image, or likeness.
Student-athletes are only allowed to receive athletic scholarships in Divisions I and II and academic scholarships in Division III. Because of this, student-athletes (many of which are of minorities) are denied opportunities to use their athletic skills to make money and are not able to take advantage of their academic opportunities due to the time commitment that is required to play collegiate sports. Additionally, in the last few years, 30 student-athletes have died from non-traumatic causes while on the practice field. All of this has come to the forefront and led to an unprecedented push in legislation for student-athletes to profit from endorsements using their name, image, and likeness (NIL).
Some states, such as Alabama, Florida, Georgia, Mississippi, and New Mexico, as of June 9th, have already enacted NIL legislation that will allow student-athletes to sign endorsements to use their name, image, and likeness taking effect on July 1st. Other states, such as Texas and Illinois, have already passed NIL legislation and currently await enactment via governor signature. These individual state NIL laws all differ in varying ways, which has lead to increased calls for Congress to enact uniform National NIL legislation. These calls have increased particularly because the NCAA has chosen to not enact new bi-laws allowing for student-athletes to profit off of their name, image, and likeness.
Today, the Senate took testimony from several experts within the college sports industry regarding NIL, what a National NIL bill should look like, and what the consequences for not doing so would look like. While some may wonder if Congress has the power to enact such legislation, they likely do under the Commerce Clause. Under the Commerce Clause of Article I of the U.S. Constitution, Congress has plenary power to pass legislation regarding areas of interstate commerce. Where schools play each other from different states and endorsement companies are located all over the country, Congress can likely regulate such an economic activity of endorsements given its relation to interstate commerce.
As it stands, only a handful of states have enacted NIL legislation. This has created recruitment advantages for schools within those states over schools in other states without NIL legislation. Not only does this create an uneven playing field amongst schools within the NCAA and conferences, but it also creates inconsistencies in the law. These inconsistencies muddle the recruiting process and can lead to student-athletes and families being mislead or confused, as well as schools in states with NIL laws taking advantage of their new recruiting powers. Additionally, what role does the NCAA play with these inconsistencies? The NCAA likes to promote an equal playing field and it is possible student-athletes who take endorsement deals in these states with NIL laws could lose their eligibility. The NCAA could also come down on schools who allow endorsements for student-athletes with penalties such as not allowing these schools to play in NCAA National Championship tournaments or funding.
Notably, in June 9th’s Senate hearings, Mark Emmert, NCAA President, stated that the NCAA is working with its schools to develop rules to pass before the end of June, but stressed that Federal legislation is necessary to mitigate any problems regarding NCAA rules not being able to properly comply with all individual state NIL laws.
This is a problem because if a state passes NIL legislation that explicitly prohibits student-athletes to have agents and another state has NIL legislation that allows for student-athletes to have agents, then the NCAA will be in violation of state laws no matter what side the NCAA comes down on regarding agents. Several states have already placed into their legislation the allowance for student-athletes to have agents, something that has never been allowed by the NCAA.
Finally, various state NIL legislation could lead to issues regarding school sponsorship versus individual student-athlete endorsement. All NCAA schools have apparel and equipment deals with large sports equipment manufacturers like Nike, Under Armour, and Adidas. These schools often receive payments from these companies for their student-athletes to wear the company’s equipment and use the company’s logo. With NIL legislation, student-athletes could hypothetically sign endorsement deals with an apparel company who is a competitor with the school’s apparel company. For example, a student-athlete could sign a Nike endorsement deal, while playing for an Adidas school. This could lead to lawsuits between schools and apparel companies over breach of contracts that stated the school’s student-athletes would only wear said company’s apparel.
The ability for student-athletes to profit off of their name, image, and likeness will have wide repercussions, both positive and negative. While every student-athlete has the right to publicity and to make money off of their public image, uniform NIL legislation is increasingly difficult given that there are large disparities between power five schools and small Division II and III schools. Large schools like Alabama have so much power and money to get their student-athletes endorsement deals that it could lead to smaller Division I schools and Division II and III programs that do not have as large of an ability for endorsements to slowly wither away. Not to mention that ensuring there are equal opportunities for female student-athletes under Title IX and minority student-athletes under Title VII is critical for any sort of NIL legislation and failure to do so could lead to Federal Civil Rights lawsuits. Additionally, any sort of NIL legislation will need to develop a safe way for student-athletes and their families to find agents who will help them and not take advantage of naïve individuals. However, if done right, uniform Federal NIL legislation could provide for a pathway for many talented student-athletes to access new doors they never were able to before.
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