NCAA to Let Schools and States Set Athlete NIL Pay Rules Amid ‘Guidance’
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The NCAA has thrown up its hands at the challenges of paying its athletes and will leave the issue to individual schools. The organization, according to reports, is pursuing a new plan with a week to go before name, image and likeness statutes going into effect in six states, and a full 11 years and 11 months from the day former UCLA basketball star Ed O’Bannon sued the NCAA over the illegal use of his likeness in college basketball video games.
The NCAA intends to waive enforcement of amateurism rules that currently prevent college athletes from profiting off their prowess and leave guidance up to the six states that have laws set to go into effect on July 1. Schools in states with no laws in place would be left to determine their own policies, with additional guidance to come from the NCAA at an undetermined time.
The decision comes just as a bevy of activity such as hiring agents, signing endorsement deals and negotiating sponsorship contracts with sneaker companies, car dealerships, trading card businesses, summer camps, social media influencing entities and other third parties must now be decided without direct NCAA oversight. Sports Illustrated and CBS Sports were first to report the news.
Assuming this plan comes to pass, college athletes in all 50 states will enjoy NIL rights by the start of July. It would represent a stunning about-face for an organization long opposed to NIL and one that has explored legal options to block NIL statues from going into effect.
Yet this outcome would not necessarily end the NIL debate.
First, although the plan is described as streamlined and permissive, it’s unclear how restrictive “NCAA guidance” would prove to be and what, if any, enforcement mechanisms would exist. The NCAA previously advocated for “guardrails” designed to prevent pay-for-play compensation being cloaked as NIL.
The NCAA has also pushed for market-value analysis of prospective endorsement deals, though it remains unclear which entity or entities would conduct such analysis. Further, the NCAA has opposed group licensing, a vehicle that is likely necessary for the return of college football and basketball video games, at least those with real players in them.
What is billed as “streamlined” plan could quickly morph into a “problematically complex” scheme.
Second, the plan doesn’t achieve uniform rules for all athletes and schools—a core principle to the NCAA, as recently expressed by Mark Emmert in testimony before the U.S. Senate. States’ NIL statutes vary in important ways. For example, in Florida, fair market analysis is required of prospective endorsement deals. In Georgia, schools can require athletes share as much as 75% of their NIL revenue with other athletes at the school. In Alabama and Texas, endorsement deals with gambling and adult entertainment companies are off-limits. Presumably NIL rules in states without NIL statutes will also vary.
State-by-state NIL differences are not necessarily bad. In fact, athlete advocates have described them as benefiting the athletes. To wit: If a state finds recruits are flocking to schools in other states with more permissive NIL statutes or rules, it could adopt a more permissive NIL statute that opens up new opportunities for athletes. That is competition at work. But it also means a different set of rules for athletes in the 50 states, and it removes the necessity of the NCAA, at least with respect to NIL, since there’d be no national standard.
Lastly, on the heels of the U.S. Supreme Court unanimously ruling against the NCAA in the Alston case, the NCAA no doubt wishes to avoid more antitrust litigation. This plan, as described, would allow the NCAA to sidestep a potential antitrust problem. On their own, member schools would decide appropriate NIL rules. If schools instead conspired to form rules, as they have done through NCAA rulemaking for decades, those rules would be vulnerable to antitrust scrutiny (competing businesses—which include competing colleges—can’t conspire in ways that unduly restrict competition). These legal considerations likely played a role in the NCAA’s calculus.
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