I regret to inform you the statehouses are at it again
The feds and the courts aren't the only ones shaping NCAA policy
Good morning, and thanks for spending part of your day with Extra Points.
By the time you read this newsletter, I’ll be making my way toward Conway, South Carolina. I’m going to be around Coastal Carolina today and tomorrow for Serious Professional Sports Journalism reasons, and then driving to Clemson for Saturday and Sunday. If you’re around either of those places and would like to say hi, drop me a line! I’m flying back to Chicago on Sunday evening and will write about my Tour de South Carolina in next week’s newsletters.
There are three major outside forces that could shape the direction of college sports in the near future. We have the court and legal system (Johnson, House, the NLRB, Alston Part II, etc.), whose rulings could toss aside amateurism as we know it over the next two years. We have the federal government, which is (maybe?) going to consider legislation that could impact NIL, the employment status of college athletes, and other hot-button policy issues.
But a third group is also putting pressure on the NCAA…statehouses. After all, state lawmakers in California were the first group to really push the conversation about NIL reform (as well as in Florida), and state lawmakers across the country have been much more active in NIL than anybody in Washington D.C.
I’m not sure when the next hearing on Capitol Hill is going to be about college sports…but there are at least three different state laws that could dramatically change that conversation, whenever it happens.
First, there’s a potential change to Colorado’s NIL law.
Colorado has introduced a bill to amend its #NIL law by adding that (1) schools may identify/create/solicit/facilitate NIL deals so long as they get the athlete's consent and they inform the athlete within 72 hours, and (2) charitable groups may compensate athletes for their NIL. https://t.co/c3aWl2Sg2U
— Dan Greene (@DanGreene15)
Apr 19, 2023
The current NCAA policy on NIL seeks to prohibit NIL deals from being “inducements”…but I can’t understand how the institution that recruits an athlete also being the direct institution that solicits and brokers compensation deals isn’t a de facto pay-for-play arrangement, especially if state law allows for say, the Colorado Athletics Booster Club to be the one compensating athletes. The current status quo already strains credulity, but athletic departments essentially creating side hustles as marketing and talent agencies ought to remove any shadow of a doubt.
Speaking of state laws taking a blowtorch to whatever teeth the current NCAA policy has, let’s take a look at Oklahoma, via On3:
Most interestingly, though, legal experts say SB 840 also appears to provide cover for OU, OSU and TU from being punished by the NCAA for any NIL-related violations, including any committed by collectives that have been set up to support student-athletes through deal facilitation.
According to the bill: “A collegiate athletic association shall not and shall not authorize its member institutions to: Entertain a complaint, open an investigation, or take any other adverse action against a postsecondary institution for engaging in any activity protected in the Student Athlete Name, Image and Likeness Rights Act or for involvement in student-athlete name, image or likeness activities.”
“If passed it would raise a lot of questions about the NCAA’s ability to enforce regulations in Oklahoma,” John Holden, an associate professor at Oklahoma State that specializes in the rights of student-athletes, told On3. “This would be a significant step in changing the face of college sports if passed and schools choose to act on the protection. It does not appear to directly shield athletes, though.
If the law says that NIL activity doesn’t have to have anything to do with fair market value, and that the NCAA can’t investigate any activity ‘protected by the act’, and if the act is so broadly defined as to include essentially any financial transaction with an athlete…well…what does it matter what NCAA policy says? NCAA policy isn’t law in Oklahoma. And if other states believe that de facto legislative immunity is now the policy in Oklahoma, you better believe most SEC states will pass similar legislation.
I’ve previously been pretty skeptical of the NCAA’s claims that they need a national NIL standard from the federal government to preempt state law. I believe that most of the differences in state NIL were more superficial than mission-critical, and it’s not like any states are actually enforcing any of these rules anyway.
But if laws like Colorado, Oklahoma and Arkansas become more standard, then I think the NCAA actually has a legitimate case. Schools using their official booster/alumni groups as NIL entities, schools actively brokering deals for athletes, and states granting some sort of diplomatic immunity from Indianapolis, would, in my mind, be significant enough to make it impossible to enforce almost any national NCAA policy.
But if you think that’s a big deal, check out California:
California AB252, or the College Athlete Protection Act, has advanced out of the Education Committee, and now moves to Appropriations. This bill, supported by the NCPA, would require athletic programs in California to directly share athletic department revenues with athletes, along with many other provisions, such as penalties for schools that drop sports programs.
With last votes in, California Assembly Higher Education Committee approves bill that would include opportunity for revenue sharing for college athletes. Final count: 8 Yes, 3 No, 1 Not Voting
Bill goes to Appropriations Committee, which is chaired by bill sponsor, Chris Holden https://t.co/IMyxDEeyub
— Steve Berkowitz (@ByBerkowitz)
Apr 18, 2023
I am a critic of amateurism and I really believe that big-budget programs should be directly sharing athletic revenues, especially media deal revenues, with athletes. But I have to be honest….the more I read about AB252, the more I think it’s a bad bill.
Specifically, I worry about pegging the revenue sharing formulas to EADA data, a decision that I think will be more of a catalyst for creative athletic department accounting, rather than revenue sharing. I worry that creating a College Athlete Protection Panel will only add more layers of slow-responding bureaucracy to two university systems that are already drowning in paperwork. I worry that it tries to solve athlete compensation issues without meaningfully involving the athletes, and potentially creating a system that they might not want. In my view, this is a bill that is using a sledgehammer to do the job of a chisel.
I don’t know if this bill, as currently constructed, actually becomes a signed law, even though it’s more likely than it was, say, a week ago. But AB252 could be a highly effective piece of legislation without ever reaching the Governor’s desk, if it inspires similar legislation elsewhere, or at least substantially shifts the Overton Window in the college athletes debate.
California’s landmark NIL law, after all, forced other states, and the NCAA, to seriously reckon with the issue…but I’d argue it was really Florida’s law, which went into effect much earlier than California’s, that really forced the NCAA’s hand. One state, even a very big state, can be isolated. Two states? Four states? Not so much.
If D.C. isn’t ready to talk revenue sharing or nationwide standards…some state lawmakers may very well force the issue before this summer.
I also wrote some other things that you might enjoy reading:
Speaking of NIL, we’re going to see some 990s of NIL collectives that registered as non-profits, and we’ll get an idea for how big they actually are. We have data on Temple’s biggest NIL collective, for example.
I dug into the historical archives to find some memos and market research around Missouri’s internal efforts to join the Big Ten back in the early 1990s.
One big problem with fundraising, from NIL collectives to universities to political campaigns? Not all money is good money.
If the NCAA sells women’s basketball as a completely new TV package…what happens to the rest of the NCAA championships? I asked around.
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