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Oklahoma legislature sends transformative NIL bill to governor

Jeremy Crabtreeby:Jeremy Crabtree04/21/23


Oklahoma’s transformative name, image and likeness bill is now on Gov. Kevin Stitt’s desk.

In early April, the Oklahoma House of Representatives overwhelmingly passed Senate Bill 840. On Thursday, the sweeping bill sponsored by Sen. Greg McCortney breezed through the Oklahoma Senate with a vote of 29-12.

Supporters say the bill levels the playing field for Oklahoma, Oklahoma StateTulsa and other colleges when recruiting and retaining student-athletes who also want to capitalize off NIL. The bill was written in consultation with OU and other state athletic departments, according to Rep. Jon Echols, who’s SB 840’s sponsor in the House.

Oklahoma lawmakers say the current law puts the Sooners, Cowboys and other state athletic teams at a disadvantage. For instance, Oklahoma’s requirement that individuals representing athletes in NIL matters be attorneys or registered agents is deemed too limiting.

“Why am I passing this bill?” Echols said when arguing the bill. “Because if we don’t, we need to go ahead and shut down OU and OSU athletics. Not passing this is tantamount to saying we no longer wish to compete on the collegiate level. It has gotten to that level. What we are doing is setting the same level playing field that everyone has to play on.”

Local political and national NIL observers said they expect Stitt to sign the bill.

That’s especially true after neighboring Arkansas revamped its NIL law in mid-April to allow schools and fundraising foundations to source NIL deals for athletes. The Arkansas bill also gives all 501(c)(3) collectives, including athletics fundraising foundations, the right to enter into deals with athletes.

Texas legislators are also considering revamped legislation – House Bill 2804 –  that’s similar to what was passed in Arkansas and is now on the governor’s desk in Oklahoma.

What’s in Oklahoma SB 840?

According to a revised bill summary published on Tuesday, some of SB 840’s biggest changes are:

  • SB 840 repeals the requirement that representation must be licensed or registered.
  • The bill prohibits a student from using a school’s logo to secure NIL compensation.
  • It allows a college or university to be compensated for the use of its logo or facilities in relation to NIL activities.
  • The bill allows a college to establish agreements with a third-party entity to facilitate NIL activities on its behalf. This part of the bill received a lot of attention after The 12th Man+ Fund was launched at Texas A&M in February. A&M and Arkansas are believed to be the first schools whose official booster organization also is directly fundraising for NIL opportunities for student-athletes.
  • SB 840 allows colleges to require student-athletes to take courses in contracts and financial literacy.
  • Additionally, the bill allows colleges and universities to adopt reasonable time, place, and manner restrictions to prevent a student’s NIL activities from interfering with team activities, school operations, and the use of school facilities.

Bill could provide protection from NIL violations

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.”

Coaches and NCAA leaders say NIL sometimes disguises “pay-for-play” deals choreographed by collectives ahead of when student-athletes sign binding national letters of intent or before they enter the transfer portal. Per NCAA rules, boosters are not allowed to pay players directly or be part of the recruiting process, and the organization says it is actively investigating multiple bad actors in the NIL space.

1Oklahoma and Crimson and Cream are the primary collectives at OU. Pokes with a Purpose is the officially endorsed collective at OSU. Additionally, Hurricane Impact was recently launched at Tulsa.

What will the NCAA’s reaction be?

“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 after the bill was passed in the House. “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.

“While this seems like a bold step to protect school autonomy, you do not have to look too far into the past to see that the NCAA was unpleased when California passed the original legislation giving college athletes NIL rights. I suspect there will be similar concerns here.”

Holden said when California passed its law, some experts suggested that it might run afoul of the Dormant Commerce Clause, a constitutional principle that “prohibits undue burdens on interstate commerce, and there is certainly a possibility that someone might view these bill with similar skepticism.”

Dan Greene, an associate attorney at Newman & Lickstein in Syracuse, N.Y., said recently he’s unsure what the reaction will be from the NCAA, especially if other states don’t enact similar laws.

Currently, there’s a patchwork of NIL laws in places across the country. Some are more restrictive than others. But there’s been a trend lately over the past year to give student-athletes more flexibility and allow schools and athletic departments to become more engaged in NIL dealings.

“I assume that the NCAA is aware of these developments, so it will be important to see how they react,” Greene said. “Will they try to fight this? Or, will they try to use it to their advantage by using these developments as reasons why federal NIL legislation is needed?”

NIL expert Mitt Winter, a Kansas City-based sports attorney at Kennyhertz Perry LLC, said on social media Friday that he believes states passing more athlete-friendly bills will make it harder on the NCAA.

“I think it’s going to make it even harder for the NCAA to convince Congress to pass a Federal bill,” Winter said. “I know some hold the opposite view, but it makes it even more clear the NCAA is trying to roll back athlete rights.”