The current state of NIL? Regulatory uncertainty. And that benefits nobody but the lawyers.
The NCAA may kick the can to Congress yet again. Federal lawmakers have their hands full. And in the meantime, athletes, schools, and businesses can't plan for the future.
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Okay! Got a few final announcements at the end, but let’s talk a little NIL first.
With everything else happening right now, you’d be forgiven for forgetting about the latest twists and turns in the Name, Image and Likeness (NIL) saga. But as of right this second, the NCAA is still scheduled to vote next week on new bylaws that would, for the first time, allow athletes to be compensated for their NIL.
But there’s a good chance that the vote gets delayed. I believe SBJ had the news first, and USA TODAY published a follow-up this morning. Via USA TODAY, here’s why top leaders in college athletics are considering pushing everything back:
The first reason would be the Supreme Court’s decision last month to hear the NCAA’s appeal of a 9th U.S. Circuit Court of Appeals ruling that the NCAA cannot limit benefits related to education that college athletes can receive.
The second involves uncertainty about what kind of bill Congress might vote on to regulate name, image and likeness issues, the scope of which could change given the results of the runoff elections in Georgia on Tuesday that will flip the Senate from Republican to Democratic control this session.
And the third factor driving a potential delay is simply a lack of detail given to NCAA membership about how a third-party clearing house would function to vet name, image and likeness deals signed by athletes to ensure they are not de facto recruiting inducements.
I’ve actually heard a few administrators express concern over the clearinghouse issue myself, which is a significant hurdle. If this marketplace is going to be effective, the devil really is in the details, and not every administrator is comfortable with the level of information they have about those details. But it’s the legislative issues that really jump out to me.
The NCAA wanted the federal government to help solve this problem for them. If they kick this can again, they’re essentially abdicating their legislative responsibility completely to the government.
ESPN’s Dan Murphy, who has followed this issue very closely, makes a great point here:
I think he’s exactly right. Earlier in 2020, you could find plenty of lawmakers who weren’t particularly excited about the idea of wading into this issue at all, particularly Republicans. In the NCAA’s perfect world, the college administrators would come up with a framework, and federal lawmakers could simply give them legal protections, so pesky states couldn’t undermine the NCAA with their own laws, and athletes couldn’t sue the NCAA on antitrust grounds for limiting their potential compensation.
But best-laid plans, etc. The whole global pandemic business, not to mention the election, dominated lawmaker time and energy. Then Democrats won the presidency and control of the Senate. I’m not going to predict exactly what a final federal NIL/college athletic reform package is going to look like, but I feel pretty confident in saying that the gist of the Rubio bill and the Wicker bill are dead. The NCAA is not going to get a bill whose only scope is to rubber-stamp whatever the NCAA decides.
Now, depending on how SCOTUS decides Alston, perhaps there is a way that the NCAA gets what they want without Congress. But projecting exactly what will come from the Alston ruling is even more fraught. Alston might kill NIL completely, or it might be very limited. I did not attend Sports Blogger Law School, and further digging into the specific legal questions here is probably for another newsletter.
But a federal bill isn’t going to get passed tomorrow. And waiting around has real costs.
I try not to get too explicitly partisan on this newsletter, but let’s get serious here. We’re not getting a NIL bill next month. We have members of the House that can’t even agree on who won the presidential election. We just had a massive security breach in the Capitol. There are going to be acrimonious confirmation hearings, investigations, COVID relief bills and more in the near future, and quite frankly, all of that stuff should be more important than trying to legislate exactly how much booster involvement in NIL bills will be permitted.
I suspect sure dire public health, economic, and public safety needs will also slow legislative efforts for NIL on the state level, although a few states will still likely pass laws this year, even if they won’t go into effect in 2021, like Florida’s will…unless the NCAA sues.
But everybody in college athletics, from presidents to athletic directors to marketing departments to prospective athletes knows that at some point, and probably some point soon, athletes will be able to monetize their NIL.
But without knowing when, or how, all everybody knows is that something is happening. And that makes sound decision-making difficult.
I’ve talked to a few folks in collegiate athletic marketing or creative departments who have expressed frustration. To what extent are they allowed to help their own athletes brand themselves? How should they set budgets or priorities? If you have a 40 person staff and can turn on a dime, that’s one thing, but what if you only have two or three people? Can you be prepared to offer support for say, your women’s soccer team, on a dime?
If you’re a high school athlete considering schools outside of Florida, to what extent should you consider NIL in your recruiting decision now? Do you go to a market where you think you might have a better shot at additional financial opportunities, even if there’s a possibility you won’t be allowed to realize them until the tail end of your eligibility? How can you weigh that against other factors in your college decision?
If you’re a business that would really like to work with an athlete, do you save some of your marketing budgets, just in case? How does that uncertainty change your marketing strategies?
We can quibble about what the rules should be, but for folks who are directly impacted by the actual regulations, not knowing what the rules will be, or even when we’ll know what the rules can be, can almost be more frustrating than having stupid rules.
It didn’t have to be this way. The NCAA didn’t have to ask anybody else to solve any of these problems for them. By continuing to delay, they left a window open for state lawmakers who forced the issue. Since allowing states to have different regulations appears to be a red line for many athletic leaders, now here we are.
The folks who will really benefit from this system are the folks who bill by the hour. Lawyers and lobbyists should have plenty of business over the next several months. It’ll be a great time to be the sort of person who gets invited to Blue Ribbon panels or commissions or whatever.
But for the scores of people actually impacted by these rules, and especially the athletes, the clock is ticking. Many of these athletes, especially in the Olympic sports, are essentially at the peak of their athletic earning potential. Every wasted day is potentially money and opportunity from their pocket.
I understand the reasons for punting again. But there’s a whole lot of folks right now who deserve some answers and legitimate clarity on this issue. Here’s hoping they get it soon.
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