{"id":191,"date":"2023-08-06T19:14:11","date_gmt":"2023-08-06T23:14:11","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/sportslaw\/?p=191"},"modified":"2023-08-06T19:14:11","modified_gmt":"2023-08-06T23:14:11","slug":"flurry-of-new-nil-activity-in-congress","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/sportslaw\/2023\/08\/06\/flurry-of-new-nil-activity-in-congress\/","title":{"rendered":"Flurry of New NIL Activity in Congress"},"content":{"rendered":"

In the span of about two weeks, senators and representatives announced no fewer than four<\/em> new bills that, if passed, would result in a national standard for name, image, and likeness practices which, as of now, vary from state to state.\u00a0 These bills join other proposed legislation introduced earlier this year.\u00a0 There are at least seven bills making their way through Congress, though not all of them have been formally introduced.\u00a0 These include:<\/p>\n

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  1. The Student Athlete Level Playing Field Act<\/em>, introduced by Representatives Emanuel Cleaver, II (D-MO) and Anthony Gonzalez (R-OH) (a former college athlete himself).\u00a0 This act<\/a> would make it illegal for universities, conferences, and organizations like the NCAA to prohibit athletes from competing as a result of entering into an NIL contract.\u00a0 However, athletes could lawfully be restricted from entering into NIL deals with certain industries (e.g., tobacco, alcohol, cannabis, adult entertainment).\u00a0 Boosters would be barred from paying athletes to induce them to enroll or stay at a university.\u00a0 The Federal Trade Commission (“FTC”) would have the authority to enforce the law.\u00a0 In addition, the Department of Education would appear to have indirect enforcement power.\u00a0 This is because the law would require Program Participation Agreements (“PPAs”)–contracts that universities sign with the government to participate in federal student loan programs–to include a commitment by schools to allow athletes to exercise their NIL rights.\u00a0 The Department of Education could claim broad authority to limit a university’s access to student loan programs if it breaches its PPA.<\/li>\n
  2. The Fairness Accountability and Integrity in Representation of College Sports Act<\/em>, introduced by Congressman Gus Bilirakis (R-FL).\u00a0 Under this act<\/a>, colleges, conferences, and governing bodies like the NCAA could not prohibit athletes from earning compensation “commensurate with market value” for use of their NIL or from signing contracts with agents.\u00a0 Again, athletes could lawfully be restricted from entering into NIL deals with businesses in certain industries (e.g., tobacco, alcohol, cannabis, adult entertainment).\u00a0 Students who stop participating in athletics could also rescind any NIL deal they’ve signed without giving payments back, so long as the deal had 1+ year remaining.\u00a0 Licensees could not enter into NIL deals until 90 days after an athlete has enrolled at a university, use NIL deals to induce enrollment at a particular school, or base NIL deals on the athlete’s on-field performance.\u00a0 The law would also establish the United States Intercollegiate Athletics Committee (“USIAC”).\u00a0 All athletes, agents, collectives, boosters, and licensees would have to register with the USIAC, and all NIL deals would have to be disclosed to it.\u00a0 The USIAC would present, among other data, disaggregated information about every NIL deal in the country.\u00a0 The FTC would have the authority to prosecute “unregistered” agents, licensees, collectives, and boosters.<\/li>\n
  3. The College Sports NIL Clearinghouse Act of 2023, drafted by Senator Lindsey Graham (R-SC).\u00a0 Reportedly, under this act<\/a>, institutions may not retaliate against athletes who enter into NIL deals, though NIL deals may still be prohibited if they would violate the school’s code of conduct or a state-wide law.\u00a0 This act would also establish the “NIL Clearinghouse,” an organization exempt from antitrust laws which would police violations of the act and have authority to impose fines or bans from college sports.\u00a0 It appears that the bill would limit NIL compensation to “market value” and would allow bans on NIL payments to induce enrollment or for athletic performance.<\/li>\n
  4. The College<\/em> Athletes Protection & Compensation Act<\/i>, introduced by Senators Jerry Moran (R-KS), Richard Blumenthal (D-CT) and Cory Booker (D-NJ).\u00a0 This act<\/a>, which contains some similarly worded provisions as Senator Graham’s NIL Clearinghouse Act, protects athletes’ rights to sign with registered agents or enter into “endorsement contracts,” except endorsements with industries adverse to an athlete’s college’s code of conduct.\u00a0 Payments to induce initial or continued enrollment would be prohibited, and universities, conferences, and organizations like the NCAA would be barred from representing students or from playing any part in setting their compensation for endorsements.\u00a0 However, universities would be required to provide athletes with “a list of rules that govern endorsement contracts.”\u00a0 It is not clear what “rules” a university would have authority to impose.\u00a0 This act would also allow rescission of NIL deals with more than 1 year remaining under similar terms as Representative Bilirakis’s proposed legislation.\u00a0 Furthermore, athletes could not be punished for entering into a professional draft, so long as the athlete does not obtain payment from the professional league, team, or agent and as long as the student declares their intention to resume collegiate sports within seven days after the draft ends.\u00a0 In addition to these common provisions, the proposed law includes various other protections for athletes, including mandatory medical care payments, non-interference with an athlete’s choice of major, continuation of scholarships in case of career-ending injury, and others.\u00a0 Finally, this act would establish a new non-profit corporation–the College Athletics Corporation–which would among other things) serve as a “clearinghouse” and “establish rules and investigatory procedures” that set standards for endorsement contracts and the authorization of individuals to serve as agents.<\/li>\n
  5. The\u00a0Protecting Athletes, Schools, and Sports (PASS) Act of 2023<\/em>, introduced by Senators Joe Manchin (D-WV) and Tommy Tuberville (R-AL).\u00a0 The senators had, for some time, sought to develop a national NIL standard, and they state that their act<\/a> is the product of input from stakeholders throughout the college sports industry.\u00a0 This act would protect athletes’ NIL rights (as with the others) but would allow exceptions for alcohol, cannabis, casinos, pharmaceuticals, and certain other industries.\u00a0 This act would requires boosters to be formally associated with a university before assisting with recruiting or with providing benefits to an athlete.\u00a0 Payments to induce enrollment would be prohibited.\u00a0 NIL contracts would have to be written in a form provided by the FTC, and athletes could only sign NIL deals after enrolling at their chosen institution.\u00a0 Contracts would have to be disclosed to the FTC.\u00a0 Universities would have to provide health care coverage for sports-related industries and financial literacy training.\u00a0 In terms of enforcement, the statute would direct the NCAA to investigate NIL violations and to report them to the FTC for further action.\u00a0 One of the more interesting provisions, however, would affect the well-known “transfer portal.”\u00a0 The law, if passed, would require “student-athletes to complete their first three years of academic eligibility before allowing them to transfer without penalty, subject to a few exceptions.”<\/li>\n
  6. The College Athlete Economic Freedom Act<\/em>, introduced by Senator Chris Murphy (D-CT) and Representative Lori Trahan (D-MA).\u00a0 This act<\/a> grants an unrestricted right to athletes to pursue NIL deals and authorizes athletes to organize groups and appoint a group representative to negotiate an NIL deal on a group-wide basis.\u00a0 Collectives would be required to register with the FTC, track deals they facilitate, and report the disaggregated details to the FTC.\u00a0 Finally, the proposed law contains unique provisions for international student-athletes, purporting to “[a]llow international college athletes to market their NIL in the same ways their non-immigrant peers can without losing their F-1 visa status.”<\/li>\n
  7. Senator Ted Cruz’s draft legislation, which is not yet named.\u00a0 The senator’s draft bill<\/a> would protect athletes’ rights to obtain representation and enter into NIL deals, except deals which fall into the vaguely worded category of “violat[ing] the code of student conduct, reasonably impact[ing] the [school’s] reputation or public image, or conflict[ing] with the terms of an existing contract or agreement[ ] of the institution at which the student athlete is enrolled.”\u00a0 This legislation would also set forth certain provisions which must appear in any NIL deal (e.g., scope of work, amount of compensation to be paid, length of agreement, etc.).\u00a0 The draft law would allow the NCAA or conferences to publish NIL deal data to allow other athletes to estimate the value of their publicity rights.\u00a0 Interestingly, the draft law would not outright prohibit payments to induce an athlete to enroll, nor would it impose new transfer portal requirements.\u00a0 Instead, it gives the NCAA and conferences the authority to set their own rules on those, and other, issues.<\/li>\n<\/ol>\n

    It is important to remember that, to date, no NIL law has ever made it through Congress.\u00a0 It is also important to understand that the proposals above contain many more details than what is discussed here, and that all<\/span> of those details are subject to change as part of the legislative process.\u00a0 Still, those who are eager to have a federal NIL standard must be encouraged by the recent uptick in congressional activity.<\/p>\n","protected":false},"excerpt":{"rendered":"

    In the span of about two weeks, senators and representatives announced no fewer than four new bills that, if passed, would result in a national standard for name, image, and likeness practices which, as of now, vary from state to state.\u00a0 These bills join other proposed legislation introduced earlier this year.\u00a0 There are at least … <\/p>\n

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