NIL: State or Federal Law?

Photo courtesy of the Associated Press (AP Photo/AJ Mast)
Photo courtesy of the Associated Press (AP Photo/AJ Mast)

There is an intense debate occurring in Congress and in state legislatures across the country surrounding name, image, and likeness (NIL) for college athletes.  The debate is two-fold.  First, should NIL be available for college athletes?  Second, if yes on NIL, in what format should NIL be implemented? 

The second question is where the intense debate begins.  Congress and state legislatures have nearly unanimously voted to approve NIL laws to see college athletes benefit from intellectual property related to their name, image, and likeness.  Universities, conferences, and businesses have gotten together to set the stage where college athletes will engage and benefit from their NIL.  College athletes will of course benefit from the existing social media structure that allows the world to connect with each other (and advertise and sell stuff). 

When it comes to how NIL will be delivered, state laws have varied from a strictly market-based approach as in California through the Fair Pay to Play Act, while Georgia’s law pools college athlete NIL revenue for other college athletes and places the money in an escrow account until one-year after the student leaves school or graduates.  In Congress, the debate is basically a line between straight NIL allowance versus larger changes to the NCAA structure.  How will states, Congress, college athletes, brands, businesses, and the NCAA navigate the NIL space? 

One the one hand, the NCAA is calling for a national law that covers all U.S. states and territories.  On the other hand, there is now and could be a network of individual state laws that allows for college athletes to choose the best school and NIL scheme for them (if that is indeed important to the specific athlete), while allowing the states to compete with each other.  The NCAA’s call for a federal law is about controlling the compliance aspect of NIL.  Compliance in college athletics is already wrought with challenges and investigations. 

In some ways the NCAA is getting left behind as the College Football Playoff looks to expand from four teams to twelve for the purpose of adding broadcast revenue opportunities and growing the field of postseason teams.  The NCAA should be less focused on compliance and more focused on what is best for the college athlete, which is education, safety, and what they will do post college, while making a little extra cash never hurt.  In negotiating contracts, one tool often used is splitting up rights to increase the sale to multiple parties.  La Liga is currently doing this to entice Amazon, which will increase sales and revenue.  Therefore, it would seem college athletes could benefit from state-specific NIL laws despite the difficulty of monitoring fifty different state laws.

There is also the constitutionality of state versus federal law.  The federal government has or at least it was envisioned to have very few powers, everything else is reserved to the states.  In fact, one is much more likely to be affected by state laws and local ordinances.  The question has to be asked, should the federal government be involved with individual NIL rights of athletes?  Interestingly, that seems much more difficult to navigate than state law.  Time will tell.

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