The NCAA is set to present legislation to Congress next week regarding the monetization of student-athletes’ names, images, and likenesses.
In a draft obtained by Sports Illustrated, the NCAA will propose that student-athletes may earn money while in school, but the restrictions will be rather significant.
While the draft only serves as an outline for the NCAA’s thinking, the restrictions are expected to ban athletes from signing endorsement deals until they have completed one semester of college, force schools to make NIL contracts public, and maintain the right to bar individuals from specific NIL opportunities.
Nonetheless, it’s a step in the right direction for those hoping for schools to boast some level of competition for the G League and overseas options for high-profile athletes hoping to make money immediately after high school.
Here is the summary of the proposed legislation – called the Student-Athlete Equity Act of 2020 – obtained by Sports Illustrated:
The proposed Act ensures that all Student-Athletes can monetize their Publicity Rights (also known as name, image, and likeness, or “NIL” rights) pursuant to:
- a uniform national structure;
- the assistance of qualified agents and advisors; and
- safeguards to prevent payments actually intended to induce or compensate a Student-Athlete for playing sports at a particular university from being mischaracterized as payments for Publicity Rights.
Publicity Rights of Student-Athletes
Section 3(b) ensures that each Student-Athlete can license his or her Publicity Rights, subject to narrow safeguards, which afford the NCAA very narrow authority to limit or prohibit payments:
- to induce a prospective Student-Athlete to attend a particular institution;
- by or on behalf of institutions; and
- for Publicity Rights licenses prior to the completion of a semester of college work.
The term “Compensation” is defined in Section 2 in a manner to ensure that the NCAA cannot regulate or limit certain fundamental benefits now available to all Division I Student-Athletes, including:
- full “cost of attendance” athletic scholarships;
- Pell and other governmental grants;
- health and disability insurance payments and benefits; and
- career counseling, and legitimate employment.
Section 3(c) permits individual institutions, acting alone and not in coordination, to prevent Student-Athletes from entering into endorsement agreements that violate university standards or that conflict with institutional sponsorship agreements.
Section 4 of the Act provides that all agreements with Certified Agents and all Publicity Rights licenses will be publicly available, which should help to prevent Student-Athletes from acting without sufficient information and also be beneficial in implementing the provisions of Section 3(b).
Agents and Advisors
Section 5 of the Act establishes a “Certification Office” within the Federal Trade Commission for the purpose of licensing and regulating agents and advisors. Consistent with the provisions of section 3(b)(ii), section 3(a) ensures that Student-Athletes can retain Certified Agents once they have passed the equivalent of one semester of institution course work.
Limited Safe Harbor/Preemption
Section 6 ensures that the NCAA, conferences and institutions will not be subjected to inappropriate liability and preempts a patchwork of inconsistent state laws.
Are you in favor of the NCAA’s anticipated proposal?