Congress weighs whether to referee ‘pay for play’ in college sports

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Starting in 2021, athletes were allowed to tap into the multibillion-dollar industry that is college athletics by monetizing their name, image, and likeness, known as NIL, for promotions and other paid media.

Athletes pulled in millions as states from Florida to Ohio followed California’s lead.

But the state laws, passed in contravention of NCAA rules, had sports officials sounding the alarm bells. In a bid to outmaneuver one another, states were beginning to enact lax NIL rules to attract recruits to their universities.

The changes were creating an “unlevel playing field” in college sports, the NCAA warned. Worse yet, they posed an existential threat to the principle of “amateurism” that differentiates college from professional sports.

The NCAA dropped its prohibition days after the Supreme Court questioned its legality under antitrust law, with Justice Brett Kavanaugh excoriating the group for “suppressing the pay of student-athletes who collectively generate billions of dollars in revenues for colleges every year.”

But the NCAA, constrained by the new state laws and fearful of further antitrust suits, failed to replace its policy with a set of guidelines on NIL. Instead, it has looked to Congress to replace a “patchwork” solution with a federal one.

Lawmakers have been slow to respond to the changing NIL landscape. A handful of bills have been introduced and reintroduced with little to no action in the House or Senate.

Sports leaders hope to break the logjam with an aggressive lobbying campaign on Capitol Hill. Figures from Alabama football coach Nick Saban to SEC Commissioner Greg Sankey renewed their calls for action this summer, mindful that this year is their best shot to get a law passed before Washington is consumed by the 2024 election cycle.

The NCAA even brought on the politically connected Charlie Baker, the former governor of Massachusetts, as its new president in March, widely viewed as a strategic hire to get a college sports bill passed.

Congress responded to the push with a bevy of legislation, some in draft form and others introduced formally.

Sen. Tommy Tuberville (R-AL), the former head coach of Auburn, and Sen. Joe Manchin (D-WV), a one-time college football player, spent more than a year consulting with stakeholders, including conference officials, coaches, and student-athlete groups, before they introduced theirs in July.

“What happened is we put something together, and then we invited all them to come in, put their two cents worth, and then we changed it around,” Tuberville told the Washington Examiner.

The bill has unique provisions, such as the limits it would place on a student-athlete’s ability to transfer schools, but it has substantial overlap with other legislation put forward in recent weeks.

“Joe and I didn’t want to get into reinventing the wheel here,” Tuberville added. “What we wanted to do was get four or five basic things to where the NCAA could work with it. And we think it hits most of those pretty good.”

Among its provisions is a ban on “recruiting inducements,” in effect gifts used to influence a student’s decision to attend a certain university.

Boosters have for decades lured student-athletes to colleges with financial perks and favors, but the advent of NIL deals has supersized those inducements.

In one possible case, a collective apparently offered more than $13 million to recruit a star athlete in Florida before the deal fell apart.

The NCAA already bans the practice but has struggled to enforce its NIL policies as state laws render the organization toothless to pursue violations.

The Tuberville-Manchin bill, like others, would preempt state law and impose a set of guardrails to regulate the market.

Agents would be required to register with a regulatory body, and all NIL deals would be reported to a central database for public disclosure.

The legislation, though it broadly allows NIL deals, would impose some restrictions, including on agreements related to drugs or alcohol.

The bill is viewed as friendly to athletics associations — it would shield schools and conferences from legal liability for enforcing the NIL rules, for example — but does not go as far as some.

A draft bill offered by Sen. Ted Cruz (R-TX), the top Republican on the Senate Committee on Commerce, Science, and Transportation, the panel of jurisdiction for NIL legislation in the Senate, includes language stating that student-athletes are not university employees.

The provision is aimed at killing efforts to share college sports revenue with the players who generate that money, a practice called “pay for play.”

The NCAA opposes revenue sharing, arguing it would starve athletic departments that subsidize less lucrative sports with the money brought in by men’s basketball and football. The change also raises Title IX concerns for women’s sports.

The NCAA, however, is embroiled in a lawsuit over whether it is denying players their right to compensation under federal labor law. Separately, a bill considered in the California legislature would have imposed revenue sharing while skirting the question of employee status.

Not all of the proposals introduced in Congress are favorable to the athletics associations. A bill reintroduced by Sen. Chris Murphy (D-CT) and Rep. Lori Trahan (D-MA) in July would, among other things, empower athletes to take civil action against the NCAA and colleges that violate their NIL rights.

“Giving college athletes the ability to make money off their name, image, and likeness was long overdue, and the past two years have transformed college sports for the better,” Murphy said in a statement. “The NCAA spent decades arguing against athletes’ right to their own NIL, so it should come as no surprise that colleges and athletic associations are now focused on how to take back control, hoping Congress will do it for them.”

Getting a bill through both chambers that reconciles these and other differences is daunting, especially in the face of a busy legislative calendar that will be consumed by government funding fights.

Should Congress fail to get legislation done, the NCAA is already contemplating a Plan B in the form of new guidelines that would incorporate elements of the proposed bills. Those include transparency and disclosure requirements and the creation of a standardized contract for NIL agreements.

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“The board believes the Association must use the tools at our disposal to improve outcomes for student-athletes when it comes to NIL activity, but there are some things we believe only Congress can address,” Jere Morehead, chairman of the Division I board of directors and president at the University of Georgia, said earlier this month.

“We have seen good progress on Capitol Hill recently,” he added, “and while that process advances, we are moving ahead to do what we can to increase transparency and establish standards so student-athletes can pursue these NIL opportunities.”