Congress Considers Multiple Bills Affecting NIL Laws in College Sports

Ongoing interest in adopting a federal standard for college athletes’ ability to monetize their name, image, and likeness (NIL) has caused Congress to propose a spate of new NIL bills. The National Collegiate Athletic Association (NCAA), a group that promotes college athletes’ well-being, has issued some broad guidelines that, since 2021, have allowed athletes to profit from their NIL. Yet even those guidelines are being challenged by various states that have arbitrarily adopted a patchwork of rules concerning the subject.

So far, at least three new NIL bills have been introduced in Congress, with a fourth being drafted for discussion.

The College Athlete Economic Freedom Act

The College Athlete Economic Freedom Act was originally proposed in 2021 by Sen. Chris Murphy (D-Connecticut) and Rep. Lori Trahan (D-Massachusetts) who reintroduced the expanded 2023 version to take care of issues arising from the NCAA’s NIL policies. The bill would require sports conferences and universities to obtain a group license from athletes before using their NIL in any promotion. Notifying athletes includes apprising them of the revenue generated by promotions and media rights deals so athletes can negotiate their share.

Current and prospective college athletes would also be able to market their NIL with no restrictions, meaning that their universities, conferences, and the NCAA could not limit students in any way. Other provisions include:

  • Allowing international student athletes in the U.S. on F-1 visas to profit from their NIL without affecting their visa status
  • Allowing athletes permission and control over retaining attorneys and agents, and participating in players associations and collectives, as well as the right to pursue civil actions
  • Forcing collectives to register with the Federal Trade Commission (FTC) and disclose all NIL deals to ensure no athlete is discriminated against; the FTC can also levy penalties for unfair or deceptive practices, including subjecting the NCAA, universities, and conferences to per se antitrust penalties

Protecting Athletes, Schools, and Sports Act of 2023

Introduced by Senators Joe Manchin (D-West Virginia) and Tommy Tuberville (R-Alabama), the Protecting Athletes, Schools, and Sports Act of 2023, offers universities some protections while prohibiting some NIL activities.

The NCAA, universities, and conferences would not incur any liability for efforts they make to comply with the Act. Prohibited NIL deals include those involving inducements for an athlete to attend or transfer to a specific school, those that conflict with university and conference licenses, and those involving alcohol or drugs. With limited exceptions, penalties attach for athletes who transfer before completing three years of athletic eligibility.

Sports agents and collectives would be subject to regulation, and NIL deals would be disclosed within 30 days of an agreement. A standard NIL contract would be available to athletes, who would also be required to take NIL-relevant classes, such as financial literacy. Uninsured athletes would be guaranteed health insurance for up to eight years after graduation.

NCAA President Charlie Baker has endorsed this Bill, as have notable university presidents and the Southeastern and Big 12 Conferences.

Student Athlete Level Playing Field Act

Representatives Mike Carey (R-Ohio-15) and Greg Landsman (D- Ohio-1) reintroduced the Student Athlete Level Playing Field Act, from 2021. The bill would create an FTC clearinghouse for NIL deals exceeding $500. The FTC would also register agents before they could work with student athletes. Recruiting inducements would be prohibited and student athletes would not be labeled employees. Athletes must also be enrolled in college before they can enter an NIL deal.

The patchwork of state laws would be preempted and the federal law would prevail for NIL issues.

College Athletes Protection and Compensation Act of 2023

Senators Richard Blumenthal (D-Connecticut), Jerry Moran (R-Kansas), and Cory Booker (D-New Jersey) disclosed the College Athletes Protection and Compensation Act in draft form for discussion. The Act would create an oversight committee to enforce standards and rules protect student athletes negotiating and entering NIL deals.

A Medical Trust Fund would cover sports-related injuries and universities would have to pay for athletes’ school-related expenses, even if they are released from their teams or suffer an injury that benches them permanently. Universities would create classes such as financial literacy, contracts, and personal budgeting for athletes contemplating NIL deals.

It remains to be seen which of these bills, if any, will gain enough traction to be passed through Congress. Our NIL lawyers will be paying attention to any legislative movement on these bills. For any questions concerning sports law or trademarks, reach out to Lomnitzer Law for a free consultation.