Proposed NCAA NIL Legislation Is A Restrictive First Step for Student-Athletes

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The NCAA's Power 5 conferences' proposed legislation governing name, image and likeness (NIL) is as many expected: filled with restrictions. According to a summary of the Power 5’s draft, athletes cannot sign endorsement deals until they complete their first semester of college, can be barred from entering into certain NIL ventures and must make public NIL contracts.

Power 5 athletic leaders, feverishly working this summer on NIL legislation, plan to present the semi-finished product to Congress next week in a Senate Judiciary Committee hearing on Capitol Hill, the latest step in advancing NIL down the path to a universal Congressional bill. Sports Illustrated obtained a summary of the proposed legislation, which is called the Student-Athlete Equity Act of 2020. 

While only an outline of the act, the summarized document provides another window into the NCAA’s thinking on a uniform set of athlete compensation guidelines. It is not without a bevy of restrictions, the most notable of which are the aforementioned trio of policies. 

In the first, NIL deals are delayed until an athlete’s second semester in college. The NCAA would also permit schools to prevent athletes from entering into endorsement agreements that “violate university standards or that conflict with institutional sponsorship agreements,” legislation reads. In the third policy, contracts that athletes enter with both agents and businesses must be disclosed to the public to help “prevent athletes from acting without sufficient information” while also ensuring that deals are not recruiting inducements.

NIL restrictions are at the heart of the debate over a universal bill governing athlete compensation. How aggressively do you regulate athletes’ NIL endeavors? The argument is a hurdle that both college leaders and lawmakers must cross. They are seeking a middle ground. Imagine athlete compensation as a football field: one end zone representing a full-fledged open market without restrictions, and the other a closed system of uncompensated labor. Amid the gulf between them, the NCAA is only moving so far from the latter system, according to the summary of legislation. These restrictions will likely trigger harsh pushback from athlete advocate organizations and some lawmakers who believe a Congressional NIL bill should be more player-friendly.

Contacted about the legislation, members of the Power 5 conferences sent a statement to Sports Illustrated

“The ACC, Big Ten, Big 12, Pac-12 and SEC have been working together to encourage Congress to create a uniform national standard to allow student-athletes to seek payment for name, image, and likeness (NIL) licensing. The conferences are collaborating with members of Congress on developing legislative language to create NIL reform that is uniform, fair, and protects student-athletes.”

According to the summary of legislation, the Power 5 believes in establishing a “Certification Office” within the Federal Trade Commission to license and regulate agents and advisors. The Student-Athlete Equity Act of 2020 also requests from Congress a safe harbor and the preemption of varying state NIL laws, which were the impetus for all of this. “NCAA, conferences and institutions will not be subjected to inappropriate liability and preempts a patchwork of inconsistent state laws,” the act says.

The legislation will be at the center of the third Senate hearing this year on athlete compensation. Lindsey Graham (R-S.C.), Senate Judiciary Committee chairman, will preside over Wednesday’s hearing on “Protecting the Integrity of College Athletics.” The hearing will be split into two parts, says Sen. Richard Blumenthal (D-Conn.), who will act as ranking member during the event. “The first part will be on NIL,” he says in an interview with SI. “The second will be on sports betting.”

As reported by SI earlier this month, Blumenthal is working with four others to craft NIL legislation, including Sen. Jerry Moran (R-Kansas), Sen. Cory Booker (D-New Jersey), Rep. Anthony Gonzalez (R-Ohio) and Rep. Emanuel Cleaver (D-Missouri). An NIL Congressional bill is expected to start on the Senate side, in the Senate Commerce committee, which has held the two previous hearings on the topic. Lawmakers are likely to incorporate parts of the proposed legislation into a Congressional bill, which would preempt state law. However, many lawmakers are against granting the NCAA anti-trust protection

Contacted Friday, Sen. Marsha Blackburn (R-Tenn.), who sits on both the Judiciary and Commerce committees, says the proposed legislation is “a step in the right direction” and she plans to further voice her thoughts at the hearing. “We’re going to see what we think about it,” she says. “I think (the Power 5 conferences) are probably as frustrated with the NCAA as everybody else. We do need to have something that will exercise preemption so you don’t have every state with a different set of rules.”