Good morning, and thanks for spending part of your day with Extra Points.
I have a very exciting Extra Points announcement to share with all of you early next week. If you want to make sure you get it, along with other Extra Points newsletters, make sure you subscribe! Subscriptions, both free and paid, help keep this project going. A paid subscription gives you four newsletters a week, plus a monthly podcast, and it’s only $7 bucks a month, or $70 for the whole dang year.
It’s easy to get lost in the weeds about this stuff, so here’s a quick update on where we are with Name, Image and Likeness (NIL) legislation.
Earlier in June, Florida joined Colorado and California in passing state-level NIL bills. If you’re interested in the specific differences between the three, I interviewed two legal experts, including one who helped write the Florida bill, here, but the TL;DR is that Florida’s bill goes into effect July 1, 2021, instead of 2023 like the other bills.
COVID-19 has slowed the legislative process in many of the states that were considering similar legislation, including Nebraska, New Jersey and Illinois, but it is probable at least one more state will pass similar legislation before next summer.
That puts NCAA leaders in a pickle. They don’t want several different states with their own slightly different NIL regulations. That leaves them with essentially four choices.
1) They could create a national policy even more permissive than the most-permissive state law. Essentially, the NCAA could just say, “Okay, NIL is fine now!” and not worry about guardrails or regulations. There’s no way they’re going to do this.
2) They could sue and try to get every state level NIL law invalidated. That’s expensive, time-consuming, and runs the risk of legal losses that could increase further legal exposure. That might happen in the future, but it doesn’t look like it’s happening now.
3) They could just do nothing, and let a mishmash of state NIL laws all go into effect. Nobody wants this either.
4) They could get the federal government to pass a law that would supersede all the state laws.
The NCAA chose door #4, and now we have our first senate bill
University presidents, athletic directors, conference commissioners, NCAA officials, LEAD1 and everybody else with a suit and a .edu email address have testified, lobbied, and encouraged Congress to pass a national NIL bill.
This has been the rare political issue that has attracted legitimate, bipartisan legislative interest in D.C.. House Republicans such as Mark Walker (R-NC) and former Ohio State WR Anthony Gonzalez (R-OH) have joined former Wisconsin and Miami university president Donna Shalala (D-FL) in calling for various NCAA reforms, including on NIL. In the Senate, a bipartisan working group was formed to study NIL reform. That group included Chris Murphy (D-CT), former Stanford football player Cory Booker (D-NJ), Mitt Romney (R-UT), David Perdue (R-GA) and Marco Rubio (R-FL).
The first legislative fruits from that effort were borne last week, as Rubio announced his Fairness in Collegiate Athletics Act.
It’s a given that writing legislation is difficult, and NIL can be a challenging issue for lawmakers unfamiliar with college athletics.
But I have to be honest. This bill sucks.
For one, this bill excludes the NAIA and JUCOs
If the practice of prohibiting an athlete from owning and monetizing their name, image and likeness is unjust, then it stands to reason that it would be unjust for everybody, not just NCAA athletes . Florida’s bill, for example, extends protections to every college student, including players at junior colleges and NAIA institutions.
From Rubio’s bill:
(4) INTERCOLLEGIATE ATHLETIC ASSOCIATION.—The term ‘‘intercollegiate athletic association’’— 15 (A) means— 16 (i) the National Collegiate Athletic 17 Association (or any successor organization); and 19 (ii) any intercollegiate athletic association that the Commission determines is 21 similar in purpose and scope to the association described in clause (i), subject to 23 subparagraph (B); and 24 (B) does not include the National Junior 25 College Athletic Association (or any successor 3 SIL20711 S.L.C. 62F Y9 YNM 1 organization) or the National Association of 2 Intercollegiate Athletics (or any successor organization).
This clause makes me think Senator Rubio does not see NIL control as a civil rights issue, or a rights issue at all, but as a concern specific to the NCAA governing structure. The point of federal legislation should not be to placate or pacify the NCAA. If we’re going to do this at all, it should be student-centered--and include all students.
There are reasons to be skeptical of the enforcement procedures
Sen. Rubio calls for the Federal Trade Commission to be the enforcement mechanism for his law. But at least one expert suggests the FTC might not be the best agency. After all, regulation of sports agents, a critical component to any NIL bill, is done at the state level, not the federal level.
If the feds don’t have the capacity, competence or ability to enforce the bill, then it’s essentially asking the NCAA to simply police everything themselves. That’s especially problematic, since…
This bill basically lets the NCAA set its own NIL rules
When looking closely at Senator Rubio’s proposed bill, two specific concerns immediately come to mind. First, while the proposed bill would require the NCAA to grant college athletes limited rights to control their own names, images and likenesses (”NILs”), the bill leaves it to the NCAA, rather than to individual state legislatures, to determine the extent of these rights. Thus, while California and Florida’s new Fair Pay to Play laws would allow college athletes to sign endorsement deals with all types companies, Rubio’s bill, which would preempt state law if passed and legally enforceable, would allow the NCAA to determine what types of deals to allow — thus presumably foreclosing college athletes from signing with sneaker companies, something that the NCAA presently opposes.
This is an important distinction!
Any new NIL marketplace will need to establish all sorts of regulatory rules. What industries or types of deals will be prohibited? Will an athlete be able to sign a deal that conflicts with an athletic department deal (e.g., can an athlete sign a Nike shoe deal at an Adidas university)? Will boosters be able to participate in this marketplace? What defines a booster?
Lawmakers in California, Colorado and Florida attempted to tackle those specific issues. Rubio’s bill would have the NCAA set those rules themselves, no matter what individual statehouses say.
There would be nothing stopping the NCAA from creating a very restrictive market, one designed to maximize revenue and opportunities for institutions, not athletes, and there’s basically nothing that athletes could do about it.
Because the bill also makes it almost impossible to sue the NCAA over those rules
This bill would make it much harder for anybody to sue the NCAA over antitrust violations. Via the bill:
(b) EXCEPTION.—Except as provided under sub11 section (a), no cause of action shall lie or be maintained in any court against any intercollegiate athletic association, or any institution of higher education which is a member of such association for the adoption or enforcement of a policy, rule, or program established under section 3.
As I read this, this essentially gives the NCAA their coveted antitrust exemption. A student wouldn’t be able to sue, arguing that whatever guardrails the NCAA establishes unfairly limit their ability to profit from their name or likeness. The NCAA has asked for this specific antitrust exemption, because it worries that basically any limits they establish would open themselves up to some sort of lawsuit.
This gives the NCAA basically everything they ask for, and gives the government nothing
Antitrust exemptions are major policy concessions. The government rarely grants them, and the NCAA has failed to secure them before. Virtually every economist I’ve read who works in antitrust or follows athlete compensation in any way has argued granting such an exemption would be a bad idea.
I’m personally not certain that granting such an exemption would automatically be a bad policy idea, but giving it up for virtually nothing sure seems like it would be. Congress could, for example, make such an exemption conditional on salary gaps or additional regulation of coaching salaries or athletic department spending. It could make it conditional on universities providing better financial reporting, or FOIA compliance, or athlete health care,or all sorts of other potential clauses.
The government has leverage here to wrangle a massive system of independent universities to change behavior. It hasn’t been shy in using that leverage in everything from Race to the Top to Title IX to the FAFSA program. If you need a favor or a massive check from the government, there are usually strings attached. So why aren’t there any here?
This bill asks for nothing from the NCAA but gives away virtually the entire store. It leaves athletes essentially at the mercy of college athletic administrators. If the NCAA could be trusted to quickly and fairly construct a marketplace for NIL rights, why hasn’t it done so already? Why has the organization dragged its feet at every opportunity?
This bill reads as if it was created to solve a problem for the NCAA, not for the athletes.
What happens next with this bill?
It heads to the Committee on Commerce, Science and Transportation. This committee does not include any members of the previous Senate NIL working group, but does include Cory Gardner (R-CO) and Rick Scott (R-FL), two senators from states that have passed NIL bills. It also includes Senator Marsha Blackburn (R-TN), who has been a critic of the NCAA.
Rubio’s bill does not currently have a co-sponsor. It remains to be seen if other senators will propose their own bills, or if substantial changes happen to this bill during the legislative sausage-making. My guess is that it would be pretty hard for this bill to pass without significant alteration, (one Republican congressman said passing a bill with a blanket antitrust exemption would be ‘legislatively impossible’, after all) but hey, you never know.
Here’s my free advice to federal lawmakers
If I were advising a lawmaker right now, here’s what I’d suggest.
1) Take your time. Students are at risk for little harm if the federal government can’t pass a bill before 2021. They’ll either enjoy protections granted under state law, or the status quo continues if those laws are tied up in court. The party that is really pushing for immediate change is the NCAA. In the middle of a global pandemic, with unemployment skyrocketing and nearly every US institution facing stress, it’s completely okay if you can’t spend enough time on this to do it right. Nobody will be angry if you focus your energies on unemployment relief right now.
2) Remember who you should be trying to help. The primary beneficiary of this legislation should be the students. Students will benefit from marketplace simplicity. Students will benefit from regulations that financially empower them, and give them the tools they need to protect themselves from bad actors. There’s nothing in this current legislation about empowering those students, by requiring schools to provide life skills or financial literacy training, for example, or about protecting them from third parties who might not take their interests to heart. It reads like a bill meant to help the NCAA.
3) This is a problem the NCAA stakeholders should have solved among themselves before going to the government. The Senate probably does not want to be in the business of solving trade association regulation questions. Any antitrust exemption or legal relief should only be granted after heavy deliberation, and after securing something meaningful to improve student health and educational outcomes. This is a chance to strike a victory for athlete health care, for taxpayer transparency, or fiscal sense. Don’t waste it.
All college students deserve better than the protections this bill affords. Here’s hoping they’re able to get it.
Thanks again for supporting Extra Points. Questions, comments, article ideas and more can be sent to MattBrownOhio@gmail.com, or to @MattBrownEP at Twitter dot com.