The Latest Update on Federal NIL Legislation

Over the past few months, new NCAA President Charlie Baker has shown that getting a federal NIL bill passed is one of his top priorities. Representatives of universities and conferences have been outspoken about the need for a federal law to prevent competitive advantages for schools based on their state laws. Leading up to the August recess set to begin on July 28, numerous NIL bills have been introduced and reintroduced to Congress. Here is a summary of each:

Unnamed Bill Drafted by Ted Cruz

Dated July 3rd, 2023, Ted Cruz drafted an NIL bill that was observed on July 21. Perhaps the biggest takeaway from this drafted bill is that it sets out the standard that athletes are not employees. This is a topic that has been widely disputed yet has remained unaddressed in most of the federal legislation proposed for NIL. In addition, Ted Cruz’s bill includes a state law preemption, meaning if the bill goes into effect, it will supersede all state laws that have been enacted for NIL. The bill would give the NCAA the power to make recruiting rules and transfer rules for college athletics without worrying about what individual states have done prior to it. Although the bill would not explicitly grant the NCAA an antitrust exemption, it would provide many of the same effects.

College Athletes Protection and Compensation Act of 2023- Drafted by Richard Blumenthal, Jerry Moran, and Cory Booker

Introduced on July 20, 2023, the College Athletes Protection and Compensation Act of 2023 focuses on regulating the NIL sphere and players’ medical protections. The Act would provide lifetime scholarships for players in addition to long-term medical coverage from injuries resulting from sports. The Act would also create the College Athletics Corporation (“CAC”) to regulate NIL and administer the bill. The CAC would consist of a 15-member board with subpoena power. Similar to the bill drafted by Ted Cruz, this bill would also expressly preempt state law.

Protecting Athletes, Schools, and Sports Act of 2023- Drafted by Joe Manchin and Tommy Tuberville

Introduced on July 25, the Protecting Athletes, Schools, and Sports Act of 2023 was drafted to set out “common-sense guidelines” for NIL across the country. These guidelines include prohibiting athletes from entering the transfer portal during their first 3 years of eligibility, mandating financial literacy training, and prohibiting athletes from deals with certain industries such as drug paraphernalia, gambling, and dangerous weapons. In addition to the guidelines for athletes, the Act would provide medical coverage for sports-related injuries for eight years after a player graduates. The Act also sets out rules for collectives, stating they can assist in recruiting if they are associated with the university through an official contract. If violations occur, the NCAA would be given the power to revoke universities’ licenses to participate in NIL or send the violations to the Federal Trade Commission (“FTC”) to be investigated.

College Athlete Economic Freedom Act- Drafted by Chris Murphy and Lori Trahan

Originally introduced on February 4, 2021, the College Athlete Economic Freedom Act was reintroduced on July 26, 2023, amongst the introduction of the preceding proposed bills from this article. The main points of this Act differ a bit from the others, as it focuses on ensuring equality amongst all collegiate athletes. The Act would include an amendment to the Immigration and Nationality Act so that international college athletes that are attending college on F-1 visas can profit off their NIL without immigration consequences because they currently have separate restrictions. The Act would also require that media rights deals include group licenses on behalf of college athletes. The last major takeaway is that the Act would prohibit college and NIL collective practices that discriminate on the basis of gender, race, or sport.

While each of these proposed bills have their own distinct goals, there is a great deal of overlap. Nonetheless, there is worry that the variety of proposed legislation will cause confusion and delay the summed-up goal of enacting a federal NIL law. Since the dawn of the NIL era in college athletics, no bill draft has made its way through a vote in the Senate. There is a looming confidence that one of these drafts may be the first, but only time will tell after Congress returns from August recess.

https://www.on3.com/nil/news/u-s-senators-joe-manchin-tommy-tuberville-alabama-west-virginia-ncaa-charlie-baker-bipartisan-nil-bill/

https://www.on3.com/nil/news/ted-cruz-senator-texas-nil-ncaa-legislation-bill-draft-employees-athletes-antitrust-charlie-baker/

https://www.moran.senate.gov/public/index.cfm/news-releases?id=A2244F4C-D01C-4F23-A6F2-6BDF56D7AB90

https://www.sportico.com/law/analysis/2023/trahan-murphy-college-athletes-rights-nil-bill-1234732227/

David Schulte is a lawyer in Michigan focused on sports and NIL. He can be found on Twitter at @DavidSchulteNIL