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State NIL laws offer few enforcement mechanisms through first year

On3 imageby:Andy Wittry09/02/22


In the first 14-plus months of the NCAA’s NIL era, legislators in 30 states have passed a law regarding NIL that is currently in effect, was previously in effect or will take effect in 2023. However, On3 conducted an analysis and couldn’t find official confirmation of a reported violation of a state NIL law or a state inquiry into a potential violation.

This doesn’t mean there haven’t been any NIL-related violations, obviously, nor does it even mean that there haven’t been any official inquiries into potential violations. But after dozens of phone calls and emails to various states’ governing bodies and offices, On3 didn’t find any confirmation of either.

Some state laws that have been enacted don’t include a specified criminal penalty. For example, in Mississippi, the Office of the Attorney General Lynn Fitch isn’t tied to the state’s original or amended laws.

In states with a law that does stipulate a criminal penalty, enforcement could be unlikely if it would require elected officials to punish a popular university or athlete in the state.

Kristina Edmunson, the communications director, for Oregon Attorney General Ellen Rosenblum said in an email the Oregon Department of Justice has some limited enforcement abilities until the state’s Senate Bill 5 and Senate Bill 1505.

However, the DOJ’s enforcement authority doesn’t apply to the ability of college athletes to earn NIL compensation, limitations placed on institutions’ ability to control the activities of athletes, or the state’s requirement for royalty payments for applicable NIL activities.

Some state laws only specify civil remedies.

Missouri House Bill 297, signed by Gov. Mark Parson in July 2021, stated, “Allows any athlete to bring a civil action for appropriate injunctive relief or actual damages, or both against third parties violating this provision in the county that the violation occurs.”

A subsequent bill, which repealed and amended the initial law, has similar language.

Responses regarding state NIL laws

A representative from the press office for California Attorney General Rob Bonta responded in email that any complaints submitted to the office are general considered to be part of a potential or ongoing investigation. They’re exempt from disclosure.

Victoria LaCivita, the director of communication for Virginia’s Office of the Attorney General, said in an email that the office is unable to comment.

On3 called the Alabama Athlete Agents Commission, a division of the Secretary of State’s office that was charged with oversight and enforcement. When asked if Alabama’s since-repealed NIL law resulted in any reports of violations while it was in effect, the employee who answered had a simple response: “No.”

Nazneen Ahmed, the press secretary for the North Carolina Department of Justice and Attorney General Josh Stein, responded in an email to On3, “I do not have anything for you on this.”

Carri Grube Lybarker of the South Carolina Department of Consumer Affairs told On3, “We fielded a lot of questions on that,” regarding the since-suspended state law’s registration requirements for agents.

However, “We didn’t have any investigations into any unlicensed activities,” she said.

Maine’s state law just took effect in early August. However, prior to its effective date, an employee in the attorney general’s office wrote in an email, “I don’t think the AG’s office will actually have any enforcement role in this law once it has taken effect.”

A lack of action from the NCAA

South Carolina legislators suspended the state’s NIL law for the 2022-23 fiscal year. It was a temporary measure that they’ll revisit, including potentially deciding to repeal the law as Alabama lawmakers did.

Constituent Services Coordinator Valerie Ingram wrote, in part, in an email, “But even if they do not repeal it permanently and do not suspend it again, the real ‘teeth’ sanctions for violation of the codified law would be from the NCAA and the individual conferences.”

While NCAA enforcement staff members have made their presence known, including at Miami through a conversation with booster John Ruiz and at Oregon through a December 2021 inquiry into Division Street, no one has been punished for violation the NCAA’s interim NIL policy.

The NCAA recently asked its member institutions for help identifying violations.

“Candidly, we need these materials because too many NIL arrangements are not made in the sunshine and getting accurate information is difficult,” an NCAA memo stated. “Individuals should contact the enforcement staff directly and any information can be provided anonymously.”

Athletes say they don’t understand state NIL laws

Right now, a majority of college athletes say they don’t have a good understanding of relevant state NIL laws, according to a survey conducted by University of Vermont lecturer and NIL consultant Bill Carter of Student-Athlete Insights.

In fact, a higher percentage of respondents said they’ve heard rumors of NIL activities that would potentially violate a state law or NIL policy than those who said they have a good understanding of their respective state laws.

Carter’s survey, which included questions provided by On3, received responses in August from 1,009 college athletes, roughly two-thirds of whom compete at the Division I level, across 21 different sports.

Fifty-nine percent of respondents said they don’t have a good understanding of the NIL law in their state, while 19% said they do have a good understanding. Twenty-two percent of athletes said they aren’t sure if they have a good understanding.

However, 21% of athletes said they’ve heard rumors of NIL activities involving athletes at their school or another school that potentially violate an NIL law or policy.

Could a federal law improve upon state NIL laws?

SEC Commissioner Greg Sankey and Big Ten Commissioner Kevin Warren are among the high-profile stakeholders in college athletics who have called for federal NIL legislation.

“We need a clear, enforceable standard to support national championship-caliber competition, and national championships themselves,” Sankey said at SEC Media Days.

At Big Ten Football Media Days, Warren said, “We need federal legislation to help put in some guardrails to make it even more cleaner, to make sure [that] name, image and likeness is not used as a recruiting inducement.”

While a federal law — however ill-fated the previously introduced bills have been — would provide a national standard for all of the NCAA’s member schools, would the federal government be in any better a position to enforce such a law compared to individual states?

All politics are local, as the saying goes. Removing the potential, even if unlikely, burden of a state lawmaker punishing a flagship institution or one of its athletes could be a start to improving the enforcement of prohibited NIL activities.

So could replacing often toothless state laws with a federal law that outlines legitimate punishment, such as hefty fines or the forced disassociation from a university in the case of a booster who violates the established law.

The Federal Trade Commission (FTC), U.S. Department of Education or Department of Justice (DOJ) are potential preexisting governing bodies that could be tasked with enforcing a potential federal law that governs NIL. Or, a potential law could theoretically create a new group that’s provided the necessary staffing and resources.

Subpoena power or the threat of penalty under perjury could provide additional teeth to a potential federal law, unlike the limitations of the NCAA’s enforcement staff.

SEC says ‘effective deterrent effect’ needed

On3 reached out to the representatives for seven prominent individuals who have called for federal legislation. The individuals hold positions ranging from Power 5 head football coach to DI commissioner to U.S. Senator.

For each individual, On3 requested an interview or comment on how the person thinks a potential federal law could or should be enforced more effectively than state NIL laws appear to have been since the summer of 2021.

Only the SEC was willing to provide a comment on the record.

“The one thing that everyone agrees on is we need effective and meaningful enforcement of whatever law is passed and there are several existing federal agencies that can charged with that or we could create a new entity that would be charged with rulemaking and enforcement,” SEC Associate Commissioner/Legal Affairs and Compliance William King told On3. “Those are things that are being discussed but the bottom line is that wherever we land, it needs to be a group that is committed to enforcing it such that is has an effective deterrent effect on conduct that would violate whatever the federal law is.”

Hours later, Sports Illustrated reported that the Power 5 commissioners sent Senators. Tommy Tuberville (R-AL) and Joe Manchin (D-WV) a two-page letter in response to the two senators soliciting feedback prior to drafting a federal bill.

The commissioners wrote, “Unfortunately, problems have emerged where it appears boosters are inducing high school and potential transfer student-athletes to attend their favored universities with payments inaccurately labeled as NIL licenses, with no connection to the value of any endorsement or NIL activity.”

They also said the lack of a “limited liability protection has effectively chilled the enforcement of recruiting rules,” in reference to a potential antitrust exemption.

Perhaps Carri Grube Lybarker of the South Carolina Department of Consumer Affairs summed it up best, when she called to say her office didn’t conduct any investigations into unregistered agents when the state law was still in effect.

“We’ll see,” she said, “what the next chapter is.”