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Okay. Let’s take a quick break from the commercials, and talk about the latest development in federal NIL legislation
The House might have just announced the best NIL bill yet.
I recognize we’re grading on a bit of a curve here. Sen. Marco Rubio released a bill back in June, and I thought it was mostly full of bad ideas. Based on testimony and questioning from the last senate subcommittee, I wasn’t super optimistic about any forthcoming legislation. There were some pretty dumb questions!
But the latest bill out of the House represents, in my view, the best idea yet. Not a perfect one, but the best one so far.
On Thursday, Emanuel Cleaver (D-MO) and Anthony Gonzalez (R-OH) announced the Student Athlete Level Playing Field Act. This isn’t the first bipartisan bill proposed on NIL issues: That was Rep. Mark Walker’s (R-NC) proposal back in March. But this is certainly the most bipartisan bill. The Student Athlete Level Playing Field Act is cosponsored by six other members of Congress, three other Democrats, and three other Republicans.
Interestingly, many of those members of congress hail from college towns or markets. Rep. Steve Stivers (R-OH) represents large swaths of Columbus, along with Athens, the home of the Ohio Bobcats. Rep. Rodney Davis (R-IL) represents the Urbana-Champaign area, home of the University of Illinois. Clemson sits in Jeff Duncan’s (R-SC) district. There are plenty of other college football fans in suburban Dallas (home of Colin Allred (D-TX)) and the Cleveland and Akron areas (home of Marcia Fudge (D-OH)).
You can read the entire text of the bill here.
There are some restrictions on NIL rights, but unlike other legislative proposals, this bill doesn’t give the NCAA everything it wants.
Perhaps the biggest thing the NCAA and senior athletic administrators would like is an antitrust exemption, which would allow them to restrict the amount of money athletes can earn (and how they earn it), without risking lawsuits. This bill notably does not grant a blanket exemption.
It also doesn’t restrict athletes from signing endorsement deals that might conflict with a university’s commercial interests. That means, hypothetically, a student could sign a deal with Nike, even though he attends a school with an Adidas contract. That’s notable, since an athletic department may theoretically sign endorsement deals with a ton of different industries, from apparel to food and beverage to transportation to insurance.
It appears Rep. Gonzalez was cognizant of those concerns. Per ESPN:
Gonzalez said they debated including a provision that would address concerns about athletes endorsing companies that compete with brands who sponsor their school, but ultimately decided any such rule would be unfair to the athletes.
"There is a real concern that you could find yourself in a world where institutions or conferences have captured the whole market," Gonzalez said. "I thought the cleanest thing to do was to pull that provision out, and if it becomes an issue we can address it later on. My sense is that it won't."
The compromise policy, as written in this bill, is to prohibit athletes from wearing conflicting apparel or endorsing conflicting products during university sponsored events. If that basketball player wanted to showcase his Nike shoes, he’d have to do it on Instagram, not during his ACC basketball game.
That doesn’t mean that the NIL marketplace will be completely unrestricted. Via the bill, athletes will be unable to enter into contracts with:
“(A) A tobacco company or brand, including any vaping device or e-cigarette or related product, Any alcohol company or brand, Any seller or dispensary of a controlled substance, including marijuana., Any adult entertainment business, or Any casino or entities that sponsor or promote gambling activities.
The gambling and alcohol prohibition are interesting, seeing as Colorado’s athletic department just signed a deal with a sportsbook, and multiple athletic departments partner with breweries or at least sell alcohol. If influence from those industries is toxic to college athletics, it would be reasonable to at least prohibit the schools from working with those industries as well.
Without this rule though, given the aggressive PR strategies some of those industries employ, the chances that somebody tries to sign an athlete to an endorsement deal are roughly 100%. I mean, CamSoda already put out an “offer” to sponsor UCLA athletics. I can understand why schools would want to prevent that from happening.
It also appears that the law would like to prevent an open market for businesses to convince recruits to attend certain schools via NIL deals. From the bill:
‘‘It is unlawful for a booster to directly or indirectly provide or offer to provide any funds or thing of value as an inducement for a student athlete to enroll or remain at a specific institution or group of institutions.
While perhaps well-intended, there’s an obvious problem here. How do you enforce that? What determines what constitutes fair market value for a deal, versus a hilariously trumped up offer made only to convince a kid to choose State over Tech?
This bill puts enforcement in the hands of the FTC. Is that a good idea?
On one hand, completely removing the NCAA from enforcing NIL regulations or limitations is probably a good idea, given how they’ve handled that responsibility in the past.
But some commentators are concerned that the FTC has the manpower and expertise to take on this responsibility. This thread, from Pepperdine law professor Alicia Jessop, is informative and speaks to the government’s history of being hands off with athletic agents as a potential sign that the FTC isn’t up for this job:
Back in July, Sportico interviewed FTC experts, and many reached a similar conclusion. This agency just didn’t have the experience needed to get involved with college athletics at all. This quote, from a former FCS athletic director turned consultant, stuck out to me:
Once you jump in with federal regulators and the government generally, you are with them forever, for good and bad. They have proven over the course of time they are neither equipped nor nimble enough to address the challenges within higher ed or athletics. This is a slippery slope.”—Jim Fiore
If the FTC isn’t the organization in charge of overseeing NIL, and the government doesn’t want to trust the NCAA with that power, then it raises the important question: Whose job is it?
And heck, if you get frustrated with the scattershot ways that certain NCAA bylaws are enforced, with the strictest penalties often reserved for G5 offenders, what happens if the FTC does take an interest in regulation, but only because of political appointees? Can you imagine if some SEC message-board types are suddenly directing the arms of the federal government to enforce CROOT LAW?
Laws are well and good, but without effective and consistent enforcement, they’re not worth an awful lot. Same with NCAA bylaws.
I don’t personally have a strong opinion on this yet, and honestly, I’m not sure I have a better idea. Use the FBI? The (lol) SEC? Put the Federal Marshalls in charge, and use it as an excuse to reboot Justified? I don’t know.
I can see enough smart people that I respect express trepidation about the FTC for me to do any cheerleading over it.
So what happens now?
Don’t look for this to become law tomorrow. Both Rep. Gonzalez and Rep. Cleaver told ESPN they hope to vote on this bill in 2021. It’s highly likely more bills come out of Senate subcommittees before then, and any final legislation has plenty more rounds of sausage making and horsetrading before it becomes an actual bill. The odds that any federal NIL bill is passed before the end of the year is remote.
There will be a lot of pressure to come up with a solution early next year. As more statehouses go back into session, look for other states to follow the lead of California, Colorado, Florida, Nebraska and New Jersey in passing their own NIL bills. States like Illinois, New Mexico, Georgia, Kentucky and Michigan, along with others, could join pass bills in 2021. Florida’s is currently the bill slated to go into effect first, in July of 2021, and without federal preemption (or court challenges), we will have athletes signing deals next year.
The NCAA doesn’t want a world where different states have different NIL rules. Lots of administrators and lawmakers don’t want that, either. Honestly, I actually think it would be better for athletes if there weren’t a dozen different standards myself.
But for that to happen, the legislative clock either needs to be sped up, or the NCAA needs to make significant concessions.
Neither seem likely right now. But 2020 is full of wonders.
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