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New Oklahoma bill would allow school-led foundations to pay for NIL deals

Jeremy Crabtreeby:Jeremy Crabtree02/17/23


The Oklahoma state senate is moving quickly to put its local athletic programs in a better position to support NIL activity.

Recently, state senators Greg McCortney and Shane Jett introduced a bill that would strengthen the law allowing student-athletes to profit from their name, image and likeness. The bill is more lenient on professional representation, eliminates restrictions on compensation, defines professional agreements and allows universities to support or enable NIL activities from third parties.

Yet, part of the bill didn’t receive a lot of attention until Wednesday, when The 12th Man+ Fund was revealed by The 12th Man Foundation at future SEC rival Texas A&M. A&M is believed to be the first school whose official booster organization also is directly fundraising NIL opportunities for student-athletes.

Upon further examination, two legal experts say McCortney’s and Jett’s bill allows a school’s foundation to do NIL deals with student-athletes in Oklahoma. Foundations are public charities as defined by the Internal Revenue Service and often are viewed as the public fundraising arm of universities and colleges.

“The bill prohibits the school’s employees – officers or directors – from compensating athletes or arranging compensation,” John Holden, an associate professor at Oklahoma State that specializes in the rights of student-athletes, told On3. “But the catch-all is ‘unless permitted by the institutional policy or state law.’ This effectively, in my view, gives schools the ability to change the policy and say, ‘Hey, everyone else is arranging these deals. Why aren’t we?’ That catch-all is the money line.”

New NIL bill in Oklahoma gives ‘a lot of power to schools’

Mit Winter, a sports attorney and NIL expert at Kennyhertz Perry LLC, told On3 that it’s Section C of the bill – seen in the image below – that would allow the foundations to do deals with student-athletes.

“Prior to the bill, any entity whose purpose included supporting the school or its athletic program could not compensate or cause compensation to be directed to athletes,” Winter said. “That would cover the foundations.”

(Courtesy of Oklahoma State Legislature)

It’s still unclear if the foundations at Oklahoma, Oklahoma State, Tulsa or any other institutions in the state have concrete plans to go down the same path as Texas A&M. But a source told On3 that at least one of the state schools has explored the possibility.

“The bill gives a lot of power to the schools, which is important,” Holden said. “I would personally advocate for repealing all these laws and letting institutions set the policy. But at least with respect to this provision, it will effectively achieve that end.”

The bill has been referred for engrossment, which is the formal reprinting of the bill upon which the chamber will vote for final passage in the Oklahoma Legislature. If passed and signed, as expected, by Gov. Kevin Stitt, the law would become effective immediately.

“I would like for us to take control of this and not give it to the NCAA,” McCortney recently told Fox 25 in Oklahoma City. “It protects student-athletes within the state of Oklahoma, and it protects our universities.”

A&M providing a NIL pathway for other schools?

Given the current legal and governmental threats to the NCAA’s current model, On3’s Andy Wittry writes that the 12th Man+ Fund could provide a preview of what college athlete compensation looks like in the future, if and when universities pay their athletes more directly.

Some coaches and administrators have suggested the possibility of bringing third-party NIL collectives in-house. That would provide university employees with greater oversight and insight into their athletes’ NIL opportunities and finances rather than being beholden to the operational decisions of fans or donors. It also could prevent potential brand confusion or donor fatigue. Athletic department fundraisers have lists of season-ticket holders and donors with whom they often have longstanding relationships.

And if the bill passes, as expected, in Oklahoma, it wouldn’t be surprising to see Oklahoma, Oklahoma State and Tulsa push to follow A&M’s lead with the 12th Man+ Fund.

“This one does not appear to have a ton of opposition, as it effectively allows schools to do what other schools in other states are doing,” Holden told On3.

State of NIL in Oklahoma

There are four prominent NIL collectives in operation in Oklahoma: 1Oklahoma and Crimson and Cream supporting the Sooners, Pokes with a Purpose supporting Oklahoma State and Hurricane Impact Inc. supporting Tulsa.

1Oklahoma is a nonprofit collective founded by a group of businessmen and fomer Oklahoma coach Barry Switzer. The collective grabbed headlines recently with teamwide NIL deals for the Sooners’ women’s basketball program.

Crimson and Cream has generated a lot of headlines over the past few months, including an announcement in early January that it struck NIL deals for the entire football roster – walk-ons included. Crimson and Cream has also been active in its support of Sooner female student-athletes. Plus, it also absorbed Strengthening Oklahoma, another OU-focused collective in December.

Pokes with a Purpose launched in June 2022, and it quickly absorbed fellow Oklahoma State-focused collective Unbridled NIL. It is a 501(c)(3) organization with a mission of providing NIL opportunities for OSU student-athletes as well as fundraising opportunities for charitable organizations. Pokes with Purpose has executed a number of deals, including some high-profile agreements with OSU football players.

Hurricane Impact Inc., an independent nonprofit corporation, was recently established to solicit financial support from individuals and corporations wishing to support TU student-athletes. It, too, is set up as a 501(c)(3) not-for-profit corporation.

High school student-athletes in Oklahoma can participate in NIL activities without losing their eligibility. The Oklahoma Secondary School Activities Association released NIL guidelines this past October that clarified NIL activities are allowed as long as high school athletes maintain their amateur status and that compensation isn’t used to influence a student’s attendance at a school.