While the NIL era certainly hasn’t doomed college athletics, as some had predicted, the past three months have highlighted the challenges that stem from the vast disparity in state laws. So in the NIL world, a familiar question arises again: When, if at all, will Congress pass uniform federal legislation to guide schools through these uncharted waters and better level the playing field?
That will be just one of the issues front and center Thursday when NCAA president Mark Emmert is among those who testify in a House of Representatives subcommittee hearing on NIL.
Emmert said in early July that he remained “very hopeful and optimistic” that Congress would pass a NIL bill. In the absence of that, the NCAA has taken a hands-off approach. That means schools in states with NIL laws have been tasked with ensuring that NIL activities align with those laws, and schools in states without NIL laws have crafted their own policies. In other words, it’s been the wild, wild west, as several sources said, a fast-evolving period in college athletics that has demanded significant heavy lifting from administrators and especially compliance officers.
Also scheduled to testify Thursday are Ramogi Huma, executive director of the National College Players Association; Linda Livingstone, the president of Baylor; Jacqie McWilliams, the commissioner of the Central Intercollegiate Athletic Association; and Cameron March, a Washington State golfer.
With federal legislation, it’s ‘if’ and also ‘when’
Casey Schwab, the CEO of Altius Sports Partners, which provides schools with NIL education and compliance support, believes federal legislation is coming. When is anyone’s guess.
“Other than maybe a handful of states that have overly restrictive statutes, I don’t know if the federal legislation is going to necessarily level the playing field,” Schwab told On3. “It’s going to just codify where we are now, which is no pay for play and (NIL deals) can’t be a recruiting inducement and here are the ways we are going to prevent that, which will be new and good for everybody. Like, enforcement and investigation, which we currently don’t have.
“I think it will end there because I just don’t think you put the toothpaste back in the tube.”
Last week, a group of ACC athletes sent a letter to high-ranking U.S. Senators urging them to create and pass a universal NIL bill. As it is now, the state in which an athlete resides determines such things as whether the athlete is able to participate in group licensing deals or a partnership with a pro team. In the letter obtained by Sports Illustrated, the athletes wrote, “Consequently, there are stark recruiting advantages and disadvantages that can influence where student-athletes complete their collegiate eligibility.”
Peter Schoenthal, the CEO of Athliance, which aims to educate and protect universities and athletes from the challenges surrounding NIL, believes uniform federal legislation ultimately will come because schools and states will continue to clamor for it.
“What we can’t have in college athletics is a bunch of different rules at the state level that create advantages, even if they are unintentional in one state versus another,” Schoenthal told On3. “There shouldn’t be any advantages. Everyone should be on the same playing field. I am very pro-NIL; student-athletes have been fighting for this for 115 years, and it’s about damn time. I’m a big believer that the rules should be the same for everyone.”
To illustrate his point, he pointed to rules in Michigan and Ohio. In Michigan, there is a seven-day reporting rule, which means athletes need to report a NIL opportunity seven days before entering into the agreement. Ohio doesn’t have that rule, meaning athletes in that state have the advantage of being able to sign deals quicker.
Another example: BYU secured a deal with one of its sponsors, Built Bar, in which the protein bar company will pay the tuition of 36 walk-ons. The school facilitated the NIL deal on behalf of its players, which would be illegal in some states. But Utah does not have a NIL law in place. As BYU associate athletic director Gary Veron told ESPN, “We feel blessed because we don’t have a state law on the books.”
They should feel blessed. Advantage, Utah schools.
Is Congress really interested in NIL legislation?
In other corners of the NIL space, there remains pessimism that Congress will come through in the near future with legislation. The NCAA has pushed for it the past few years; several bills have been introduced in Congress, but discussions collapsed over disagreements.
Tom McMillen, a former U.S. Congressman, is the CEO of LEAD1 Association, which advocates for the 130 FBS athletic directors and their departments. He told On3 recently that he was told that momentum in Congress has waned in recent weeks, particularly as some on the Republican side from the South have become less willing to move forward on a NIL bill.
“Part of the reason is because no one is being left behind” now on NIL, McMillen said. “I don’t think a lot of the SEC schools — Roger Wicker (R-Miss.) is the (ranking member of the Senate Committee on Commerce) — I don’t know if they have as much of an impetus to do a national bill now, at least in the near term. I still think folks are trying to get a deal done, but it could be more difficult than easier.”
From a brand standpoint, it’s been daunting to assess and navigate the various state laws while also trying to anticipate what legislation may be around the corner. For instance, Honey Stinger, a Colorado-based sports nutrition company, recently entered into its first-ever group licensing partnership with North Carolina. The agreement will deliver compensation to 10 UNC athletes.
Luke Cherry, director of athletes and partnerships at Honey Stinger, told On3 “that’s what made us nervous initially — we can’t just jump head-first into this thing. We don’t know how it’s going to evolve and change. And if we align with a group like The Brandr Group, they are going to be ahead of the rules and aligned with state legislation and how the school itself is operating. I don’t think it’s possible for many brands to really stay on top of all the state legislation and ever-changing rules. In my opinion, when the NCAA opened this thing up, they anticipated a little bit of chaos.”
Malik S. Jackson is a sports attorney with Jacksonville-based Smith Hulsey & Busey and counsels clients on NIL compensation matters. He said until Congress “does something in a bipartisan fashion that benefits all Americans, it’s hard for me to go out on a limb and say they are going to occupy this NIL space.”
“I see the (NIL landscape) being more fragmented in the short term for at least the next year or two,” he said. “It’s going to be institutions and state legislators that are going to have to be the entities that will have to put up a fence and protect athletes.”
If and when Congress passes a federal NIL law, the next question is whether the NCAA will use its enforcement arm to police it. Schoenthal said he would caution not to attempt to “rationalize irrational people,” which he calls the NCAA, adding that the association has become “afraid of its own shadow” in the wake of the landmark Alston U.S. Supreme Court ruling.
Schwab said whether the NCAA acts as an enforcement mechanism depends on the actions, if any, of the federal government. There have to be rules, he said. What entity steps forward to enforce those rules — whenever more universal guardrails are established — remains to be seen.
“I think we’ve seen that if rules live in one single place, then there is going to constantly be pushback, there’s constantly going to be lawsuits,” Schwab said. “And with this topic, if there is one thing we all know, there will be lawyers.”