WASHINGTON — A seismic shift will rock college sports next month, when a handful of new state laws go into effect allowing student athletes to make money off their personal images.
It’s been against the rules governing collegiate sports for student athletes to make a profit off their name or image— a practice that’s commonplace in professional sports.
But a flurry of states has forged ahead with laws granting college athletes the rights to their own “name, image and likeness,” arguing that it’s a matter of fairness for student athletes. Statutes in five states, including Georgia and Florida, will go into effect July 1.
Congress could step in, but lawmakers have been unable to come to agreement on a federal law that would resolve the coming patchwork of differing state laws. The Senate Commerce, Science, and Transportation Committee is scheduled to grapple with the issue again during a hearing Wednesday morning.
The state laws regulating name, image and likeness rights are part of a national wave of legislation. A tally by ESPN shows at least 11 other states — including Tennessee, Montana, Colorado, Michigan, Maryland and Arizona — have statutes poised to go into effect in the coming months and years.
That state policy-making sets up a chaotic legal playing field for the National Collegiate Athletic Association, which governs college sports and has long resisted efforts to pay student athletes, even as its revenues and those of university athletic departments have soared.
The NCAA has said it is “committed to modernizing” its name, image and likeness rules. But the sports governing body has held off any official changes because of yet one more complication— the U.S. Supreme Court is preparing to rule before the end of this month in a separate but related case involving the NCAA’s limits on eligibility and compensation.
SCOTUS decision looms
The result of that case, NCAA v. Alston, is likely to determine the NCAA’s ability to respond to the new “NIL laws.” The case centers around whether NCAA rules capping the amount of financial aid athletes receive from colleges violate federal antitrust laws.
The NCAA has argued that current rules, which allow schools to offer athletes only a scholarship and an additional cost-of-attendance stipend, are in line with federal law.
But a lower federal court struck down those limitations, saying the NCAA could restrict benefits unrelated to education, such as cash payments, but not potentially expensive education-related benefits, like free laptops or paid post-graduate internships.
It’s not clear how narrow or broad the Supreme Court’s ruling will be in the pending case, but depending on how that opinion is framed, it could make it “very difficult” for the NCAA to enact any policies on name, image and likeness rights, said Steve Ross, a professor of law at Pennsylvania State University and executive director of the school’s Center for the Study of Sports in Society.
If the top court rules against the NCAA in the Alston case, one option is that it could suggest that the matter be resolved by individual sports conferences, Ross said.
A favorable ruling for the NCAA could give assurance that it can legally attempt to set some guidelines around name, image and likeness rights, he added. Or the collegiate sports organization could launch a legal challenge to those state laws.
“I’m hopeful that after the Alston decision, Congress will actually look at this,” said Ross, who teamed up with other sports law professors to craft a proposal for regulating NIL rights.
Little uniformity among states
In the meantime, the bills passed by state legislatures so far offer little uniformity on how the issue will be managed state to state.
There are some similarities. Most states would allow student athletes to hire professional representation to negotiate contracts with outside companies.
But there are differences as well.
The new law in Georgia allows schools to require athletes to pool up to 75% of any name, image and likeness income they earn into an escrow account, which would then be shared with other athletes. A student’s share of those dollars could not be withdrawn until after they graduate or a year after they leave the school.
The Georgia law also requires college athletes to take courses on financial literacy to better prepare them for spending that money.
The measure approved in Maryland isn’t set to take effect until July 2023, allowing time for any policy changes that may come from the NCAA and the federal government.
That Maryland law also creates new health and safety requirements in Maryland athletic programs to prevent and treat serious injuries, a provision prompted by the death of University of Maryland football player Jordan McNair, who died of complications related to heat stroke after a 2018 practice.
Even with distinctions across states, the new laws all bring the prospect of at least modest and potentially significant new income for players, particularly those in the most-watched, big-dollar sports like football and basketball.
A study by Pennsylvania-based Temple University School of Sport, Tourism and Hospitality Management also suggests that athletes across non-revenue generating sports may also be able to use their social-media platforms to “attract endorsement deals from sponsors with the opportunity to develop an audience and operate as influencers.”
That study noted that female student athletes tend to post more content than their male counterparts, and the median athletes of either gender have a comparable number of followers, suggesting a somewhat more level playing field for potential social-media endorsements based on their reach.
Multiple ideas in Congress
A federal law would help to standardize the nuances among those state laws, but members of Congress have been unable to reach agreement across at least eight proposals, including a bipartisan proposal from Rep. Anthony Gonzalez, an Ohio Republican and former Ohio State football player, and Rep. Emanuel Cleaver, a Missouri Democrat.
Those proposals range in scope. A wide-reaching measure from Democratic Sens. Cory Booker of New Jersey and Richard Blumenthal of Connecticut includes revenue sharing, a medical trust fund, and greater scholarship protections.
“I know firsthand that college sports can open doors of opportunity that most young people never knew existed—but the unfortunate reality is that the NCAA is also exploiting college athletes for financial gain, and disproportionately exploiting Black athletes who are over-represented in the revenue generating sports,” Booker has said. “Under its current operation, the NCAA is preventing college athletes from earning any meaningful compensation and failing to keep the athletes under its charge healthy and safe, and that needs to change.”
A number of issues remain unresolved across those ideas from members of Congress, including whether a federal statute would entirely preempt state laws on the matter.
“As states continue to pass laws determining how college athletes can be compensated for their name, image, and likeness, it is clear that a patchwork of 50 state laws would be devastating to college sports,” Sen. Marco Rubio, R-Florida, said last year when he introduced his Fairness in Collegiate Athletics Act.
The Senate hearing set for Wednesday could advance the debate. Staffers for Sen. Maria Cantwell, D-Washington, who leads that panel and who has been a key player in talks over NIL legislation, did not return messages from States Newsroom for this report.
Sen. Jerry Moran, R-Kansas, who drafted one of the NIL rights proposals, told USA Today last month that it would be “difficult … if not impossible” to pass a federal law on the issue before July 1.
But Moran also told the paper that the state laws have made NIL rights for college athletes “a much more important issue” than it had been even a few months earlier.
The Supreme Court is set to rule in the Alston case before it adjourns at the end of June.
Depending on the timing and scope of that ruling, the next steps from the NCAA come on June 23, when one of the organization’s rule-making panels is set to meet.