How the Show-Me State is Changing the NIL Landscape

I. Introduction

While the National Collegiate Athletic Association’s (NCAA) guidance and state law are fairly new, the discussion on Name, Image, and Likeness (NIL) has been prevalent in the college athletics landscape for many years. From O’Bannon v. NCAA, to California’s passing of the “Fair Pay to Play Act” in 2019, the NCAA doubled down on their stance towards amateur sports and student-athletes' compensation.[1] After months of back and forth regarding student-athletes’ right to market their own NIL, the NCAA threw their hands up, told their members to follow state laws and provided guidance for those members who did not have state laws on July 1, 2021. [2] At the core of the NCAA’s guidance, they instructed that there shall be no inducements for pay for play, no recruiting inducements, no institutional involvement, no conflict with Team Activities, no institutional trademarks, and no resale of memorabilia.[3] The policy also created agent protocols and included several disclosure requirements.[4] 

Hailed as one of the least restrictive NIL laws in the country, Missouri has taken an innovative approach in allowing student-athletes to utilize their own NIL, and influencing the rest of the country.

II. Legal Background

After the Supreme Court ruled in NCAA v. Alston, that the NCAA’s current practice of limiting “non-cash education related benefits” and limiting the type of compensation student-athletes could earn was a clear violation of antitrust rules, the NCAA essentially gave up its fight to stop NIL.[5] The court noted that “…the NCAA’s justification for its remaining rules — that they enhance collegiate athletics by distinguishing them from professional sports — impermissibly balances harm in the labor-side market against benefits in the consumer-side market,” versus the benefits gained by the student-athletes.[6] While the decision did not discuss student-athlete NIL restrictions, the NCAA realized after a stern warning from Justice Brett Kavanaugh reminding them, “that the NCAA was not above the law.”[7] 

The NCAA essentially gave up and adopted their Interim NIL Policy from the Division I Council Working Group for member-schools that had no state law one day prior to state law being enacted across the country.[8] Stressing multiple times throughout the policy, the NCAA’s interests were to continue to follow “…current NCAA rules regarding recruiting and pay-forplay…” to reinforce the ideas of fairness and integrity. While the three-page policy asked more questions than providing answers, states like Missouri found it imperative to pass their own state law.

A. 2021 Missouri NIL Law

In response to the new NCAA guidelines, Missouri legislators passed initial guidance in 2021.[9] House Bill 297, initially allowed student-athletes, “…to garner compensation for the issue of their name, image, and likeness rights as well as athletic reputation without hindering their ability to fully participate in athletics or receive grants and stipends…”, while also being able to hire professional representation in relation to NIL deals.[10] The provision also gave protection to the institutions, by not allowing student-athletes to enter into contracts with competition companies of existing sponsors, for immoral products, and not allowing students to use school marks and logos.

B. 2022 Amendment

Missouri realized quickly that they needed an amendment to current state law to “keep up with the Joneses” and passed a new NIL bill on June 16, 2022.[11] The bill went into effect on August 28, 2022, and allowed for Missouri Institutions to be more hands-on with their student-athletes.[12] The key change to the former law was the allowance of more involvement from the institution during the NIL process.[13] Schools were now allowed to facilitate deals and provide annual financial development programs.[14] While the 2022 amendment gave more flexibility to schools, the real benefit occurred during the 2023 amendment.

C. 2023 Amendment

In response to NIL laws being passed in Texas, Alabama and other parts of the country,

Missouri lawmakers opted to go back to the drawing board in year three.[15] In July 2023, Missouri Governor Mike Parsons amended current state law for the third time, which included ways to bypass NCAA NIL oversight.[16] Beginning on August 28, 2023, college coaches could now have a more active seat at the NIL table, allowing the Tiger Fund[17] to be actively involved in fundraising instead of as a third-party collective, allowing the use of school logo and marks, and allowing Missouri High School student-athletes to start profiting of their own NIL.[18] Now coaches can participate in NIL meetings where the 2022 amendment only allowed them to only facilitate deals. However, coaches are not allowed to receive compensation for facilitating these deals.[19] 

For the first time, high schoolers are now able to join in and profit from their own endorsement deals. The major catch is “as long as they sign a letter of intent to attend a public university in Missouri.”[20] State Representative Kurtis Gregory stated that this new rule could “incentivize some of Missouri’s top talent to remain in their home state, helping to “close down the borders and keep Missouri’s best athletes in the state of Missouri.” An exact example of a recruiting inducement that the NCAA wanted to avoid.  

Interestingly enough, the Show-Me state laxed its amendment in favor of the boosters. With the passage, the Tiger Fund is now allowed to directly fundraise for NIL instead of through a third-party collective.[21] Now Boosters can donate directly to student-athletes and receive a tax deduction.[22] Finally, student-athletes are allowed to wear team gear, and use school marks in logos in advertisements.[23] 

While the amendment has been praised, the third passage included a roadblock. Part of the amendment reads “[t]he provisions of this section shall not be construed to qualify a student athlete as an employee of a postsecondary educational institution.”[24] For the most part, the Show-Me State’s NIL bill was almost the exact opposite of what the NCAA envisioned, however the part of the bill regarding student-athletes not being employees leans into the NCAA’s current stance on employment for student-athletes. 

III. NCAA Compliance and NIL

While schools still have to follow NCAA Compliance Rules in order to compete, however, state law will still trump NCAA legislation. However, the NCAA is trying to assert its control in a few by-laws. 

NCAA Compliance and Enforcement

The NCAA’s stance on Pay-For-Play is shown in By-Law 16.02.03 which requires student athletes to not accept extra benefits while participating in intercollegiate athletics.[25] In terms of NIL, student-athletes are not supposed to enter into contracts where they are not providing a service in return. 

In October 2022, the NCAA adopted By-law 19.7.3 which discusses Violations Presumed in Select Cases. [26] In cases involving NIL, the infractions process “…shall presume a violation occurred if circumstantial information suggests that one or more parties engaged in impermissible conduct. The enforcement staff may make a formal allegation based on the presumption. The hearing panel shall conclude a violation occurred unless the institution or involved individual clearly demonstrates with credible and sufficient information that all communications and conduct surrounding the name, image and likeness activity complied with NCAA legislation.”[27] Unlike any other violation, the member-school has to produce evidence that the NIL violation did not occur. [28] Even in the simplest criminal case, the presumption is innocent before proven guilty. In enacting By-law 19.7.3, the NCAA is trying its best to assert what little control they have over NIL.

IV. Why College Athletics Needs a Federal Bill

If the NCAA wants to regulate NIL in a way that promotes “fairness, integrity, and sportsmanship,” then it’s time to work with Congress to enact Federal Legislation.  The Missouri rule in particular has been a source of contention around the country.[29] Coaches nationwide have argued that the bill has created an uneven playing field and creating a competitive disadvantage.[30] While many of these schools have large athletic budgets and have their own state laws, there is an argument that the newest amendment was purely made for recruiting purposes and goes completely against NCAA NIL Policy. The Missouri law allows everything that the interim policy did not. States are willing to show the NCAA that they do not care about their policies and will enact rules to keep the NCAA from acting on its policy.

Currently, no state law mirrors another, each state legislator is trying to outdo the other. If the NCAA is serious about creating a level playing field, they need to work on creating a bill that is uniform, and reasonable on restraint. Student-athletes should be able to pick the school they want to attend versus picking the school that can give them the most NIL money. If the NCAA is truly about creating a landscape where fairness, integrity, and proper recruiting tactics are paramount, they’ll take a look at all the state NIL laws and work with Congress to enact a law that encompasses the student-athletes right to publicity while protecting their own goals.

University of Missouri Head Coach Eli Drinkwitz put it best: “Until there’s a uniform rule or a standard rule in place, then every institution and university, as well as state, is privileged to do what they believe is in the best interest of their student-athletes and their citizens,” in a program presser.[31] 

V. Conclusion

Many strides have been made in allowing student-athletes to profit off of their own NIL, but more can be done. If the NCAA wants to hold on to their justification told in Alston, “that college athletes should not be paid because the distinguishing feature of college athletics is that college athletes are not paid,” then the NCAA needs to work with Congress to create a bill that not only benefits the student-athletes but also encompasses the rules they treasure so much.  Specifically, the Missouri state law is an example of how state legislators don’t care about the NCAA policy and want to put their student-athletes first. The NCAA should follow suit.

Brittany Archer is the second-place winner of the 2023 Conduct Detrimental NIL Writing Competition. She is currently a 2L at the University of Missouri School of Law, and she earned her B.S. from the University of Texas in 2021. Additionally, she earned her M.S.A. from Ohio University in 2022.

References:

[1] Anthony M. Dalimonte, NIL Timeline: The Events that Transformed College Sports, https://www.fosterswift.com/communications-timeline-NIL-cases-transform-college-sports.html 

[2] Id.

[3] Mizzou Athletics, Mizzou NIL Regulations & Guidelines, https://mutigers.com/sports/2022/12/28/mizzou-nilregulations-guidelines 

[4] Mizzou Athletics, Mizzou NIL Regulations & Guidelines, https://mutigers.com/sports/2022/12/28/mizzou-nilregulations-guidelines

[5] Tamara H. Bennett, NCAA V. ALSTON, 2022 TXCLE-AIP 11-III, 2022 WL 657144

[6] Sherman Act – Antitrust Law- College Athletics – NCAA v. Alston, 135 Harv.L-Rev.471, https://harvardlawreview.org/print/vol-135/ncaa-v-alston/,(2021). 

[7] Bennett, NCAA V. ALSTON, 2022 TXCLE-AIP 11-III, 2022 WL 657144; Natl. Collegiate Athletic Assn. v.

Alston, 141 S. Ct. 2141 (2021). 

[8] NCAA Interim NIL Policy, NCAA (Jul. 2021),

https://ncaaorg.s3.amazonaws.com/ncaa/NIL/May2022NIL_Guidance.pdf 

[9] Kaitlyn Schallhorn, Missouri to allow student-athletes to profit off of likeness, (July 13, 2021), https://themissouritimes.com/missouri-to-allow-student-athletes-to-profit-off-of-likeness/.

[10] Id.

[11] Kurt Erickson, Parson Signs New Missouri NIL Law for Student Athletes, ST. LOUIS POST-DISPATCH (June 16, 2022), https://www.stltoday.com/news/local/govt and-politics/parson-signs-new-missouri-nil-law-forstudentathletes/article_bf80ea48-a278-5495-8f0c-2dd127f7e9b5.html [https://perma.cc/NF3K-EMDN]. 

[12] Id. 

[13] Tyler Kraft, Pay-for-Play(ers): Missouri’s Recent NIL Amendment Is a Solid Blueprint for Federal NIL Regulation, 88 MO. L. REV. (2023), https://scholarship.law.missouri.edu/mlr/vol88/iss2/13. 

[14] Id. 

[15] See Darren Heitner, The New Race by States to Remove NIL Restrictions on College Athletics, (April 27, 2022), https://abovethelaw.com/2022/04/the-new-race-by-states-to-remove-nil-restrictions-on-college-athletes/ 

[16] Eric Prisbell, Examining the NCAA’s aggressive push for federal NIL laws, (September 25, 2023)

https://www.on3.com/nil/news/ncaa-aggressively-pushes-for-federal-nil-bill-corey-booker-lindsey-graham-tommytuberville-joe-manchin/ 

[17] The Tiger Fund is the University of Missouri-Columbia’s Fundraising arm of the athletic department. 

[18] Dave Matter, Missouri lawmakers revise state's NIL law, expand college coaches' role in negotiations, (May 9, 2023), https://www.stltoday.com/sports/college/mizzou/missouri-lawmakers-revise-states-nil-law-expand-collegecoaches-role-in-negotiations/article_56ee420a-ee95-11ed-bbf8-077630df774d.html.

[19] Missouri Western University, Name, Image and Likeness Information, https://gogriffons.com/sports/2021/7/8/name-image-likeness-information (last visited November 9, 2023).

[20] Liam Knox, Missouri to Open NIL Profits to High Schoolers, (July 18, 2023),

https://www.insidehighered.com/news/quick-takes/2023/07/18/missouri-law-will-open-nil-profits-highschoolers#:~:text=Missouri%20to%20Open%20NIL%20Profits%20to%20High%20Schoolers&text=The%20law%20will%20allow%20athletes,a%20public%20university%20in%20Missouri. 

[21] Id. 

[22] Id. 

[23] MO. REV. STAT. ANN. § 173.280, (2023), https://revisor.mo.gov/main/OneSection.aspx?section=173.280 

[24] MO. REV. STAT. ANN. § 173.280 

[25] NCAA, DIVISION I MANUAL BYLAW 16.02.3,

https://web3.ncaa.org/lsdbi/search/bylawView?id=33406#result, (last visited Nov. 7, 2023). 

[26] Monica Matias, NIL Enforcement Actions are Here: How Can Institutions Prepare for Possible NIL Enforcement Actions?,https://www.jdsupra.com/legalnews/nil-enforcement-actions-are-here-how 1632284/; see also NCAA, DIVISION I MANUAL BYLAW 19.7.3 https://web3.ncaa.org/lsdbi/search/bylawView?id=126324#result ( last visited Nov 7, 2023). 

[27] NCAA, DIVISION I MANUAL BYLAW 19.7.3,

https://web3.ncaa.org/lsdbi/search/bylawView?id=126324#result,(Nov 7, 2023). 

[28] Matias, https://www.jdsupra.com/legalnews/nil-enforcement-actions-are-here-how-1632284/. 

[29] On 3 Staff Report, Eli Drinkwitz says Missouri’s new NIL law is ‘in the best interest of the state of

Missouri’,(Aug. 30, 2023),https://www.on3.com/college/missouri-tigers/news/eli-drinkwitz-says-missouri-new-nillaw-in-the-best-interest-in-the-state/. 

[30] On 3 Staff Report, https://www.on3.com/college/missouri-tigers/news/eli-drinkwitz-says-missouri-new-nil-lawin-the-best-interest-in-the-state/. 

[31] On 3 Staff Report, https://www.on3.com/college/missouri-tigers/news/eli-drinkwitz-says-missouri-new-nil-lawin-the-best-interest-in-the-state/.