Conference Leaders Fire Back at Perceived Abuses of NIL

An open question in college athletics in the post-Alston has always been, to put it bluntly, how the heck will the National Collegiate Athletic Association (“NCAA”) try to reign in abuses of name, image, and likeness (“NIL”) compensation to ensure that a not-so-secret regime of pay-for-play is not the ultimate result? Balancing its adherence to the Supreme Court’s ruling in Alston with its desire to maintain some level of normalcy in the way it conducted its business was never going to be simple for the NCAA. And, therefore, somewhat wisely, the NCAA took a relatively hands-off approach to NIL for the past year. The NCAA’s interim NIL guidance,[1] issued in June 2021, did not actually provide much guidance: in effect, the guidance only said that college athletes, or student-athletes as the NCAA continues to insist on calling anyone who plays a college sport,[2] were able to earn compensation from NIL (which the Supreme Court had already required in Alston, so no new right was really being granted) and could engage in NIL opportunities consistent with state law, any school requirements, and any conference requirements. In other words, the NCAA punted (sorry) responsibility for NIL regulations to other groups, which is not necessarily a bad thing given the Supreme Court’s firm stance against the NCAA in Alston – the NCAA was likely seeking to avoid further antitrust scrutiny in the wake of Alston by having a light hand on enforcement at least in the immediate wake of the decision.

But this is not to say that the NCAA was not concerned about policing improper NIL arrangements. Preventing unfair competitive advantages that would result from pay-for-play arrangements, even if disguised as NIL, remains a primary concern for the NCAA. While there have not yet been any allegations by the NCAA against any member school about violations of NIL arrangements – and the first such allegation will be a nuclear moment in college sports – that is not to say that the NCAA is not looking into possible violations. On August 18, 2022, the NCAA sent a letter to its 1,100 member schools reiterating the fact that its enforcement staff is “actively investing potential abuses of NIL transactions” and imploring member schools to cooperate with such investigations by reporting potential violations. [3] A possible follow-up to this request could be an official NCAA rule requiring schools to share any information about NIL deals that their athletes are entering.

It seems, however, that the leaders of the NCAA’s member conferences are becoming impatient with the NCAA’s approach to enforcement. James J. Phillips, Commissioner of the Atlantic Coast Conference (“ACC”), Brett Yormark, Commissioner of the Big 12 Conference (the “Big 12”), Greg Sankey, Commissioner of the Southeastern Conference (the “SEC”), Kevin Warren, Commissioner of the Big Ten Conference (the “Big 10”), and George Kliavkoff, Commissioner of the Pac-12 Conference (the “Pac-12”)[4] sent a letter[5] on August 31, 2022, to Senators Tommy Tuberville (R-Ala.) and Joe Manchin (D-WV) in response to the Senators seeking feedback on a bipartisan NIL bill that they would be working together to draft. [6] The Commissioners noted that while they “recognize the rights of students to engage in [NIL for endorsements, camps, and lessons],” they were frustrated with the “piecemeal fashion through differing state laws and NCAA guidance” that NIL has been regulated thus far. [7]

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. This kind of inducement was not what anyone had in mind when NIL was created[.][8]

The argument in favor of federal NIL legislation made by the Commissioners essentially boils down to two major concerns: 1) fraudulent NIL deals that are disguised pay-for-play arrangements, and 2) NIL deals that are not correctly valued but are otherwise legitimate, resulting in some level of the compensation being an improper inducement. These concerns are both legitimate: pay-for-play is widely deemed as being a negative for college sports and nothing is prohibiting the NCAA from preventing it. But there has not been any solid indication that either of these scenarios are happening in the current landscape of college sports.[9] The lack of concrete examples of these impermissible situations makes it difficult to effectively legislate against their occurrence. Despite this difficulty, the Commissioners attempted to provide five guidelines to help Senators Tuberville and Manchin in their drafting of federal NIL legislation:

1. Pay-for-play should be expressly prohibited.

2. Protections for student-athletes (the term used by the Commissioners in their letter) should be built in to regulate anyone representing them in NIL deals and to provide that appropriate dispute resolution mechanisms exist in relation to NIL deals.

3. Long-term rights to a student-athletes’ NIL should be prohibited.

4. NIL compensation should be tied to market rates.

5. A mechanism for disclosing NIL agreements to compliance officers at NCAA universities.

It remains to be seen if Senators Tuberville and Manchin will have any luck getting their proposed NIL bill passed. Per Sports Illustrated, many, myself included, “believe it to be a long shot to pass in a divided Congress.”[10] At least eight federal NIL bills have been filed since 2019 and failed to gain any traction. Perhaps the best chance that this particular iteration has of being passed is the fact that Manchin is tied to it and, as the frequent swing vote in a divided Congress, might be able to push it through as part of a deal to pass or modify other legislation

[1] NCAA adopts interim name, image, and likeness policy - NCAA.org.

[2] There is not an easy answer as to why the NCAA insists on referring to college athletes as student-athletes. One explanation is that it represents a linguistic attempt by the NCAA to continue to classify college athletics as an amateur sporting endeavor, amateurism being a major draw to college sports according to the NCAA.

[3] NCAA asks member schools to help with NIL violation investigations (espn.com).

[4] The ACC, Big 12, SEC, Big 10, and Pac-12 are, of course, the “Power 5” of NCAA member conferences, representing the biggest conferences with the most financial sway and political power.

[5] A5 083122 Response To Request.pdf - Google Drive.

[6] Tommy Tuberville leading new congressional push for NIL regulation - Sports Illustrated.

[7] A5 083122 Response To Request.pdf - Google Drive.

[8] Id.

[9] Both scenarios are DEFINITELY happening (people like winning way too much to not bend the rules a little); I am only pointing out that we have not yet seen concrete proof that either scenario is happening.

[10] NIL: Power 5 commissioners urge congress to take action - Sports Illustrated.