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Why the Power 5 Commissioners want a Federal Law to govern NIL

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In an Aug. 31 letter to U.S. Senators Joe Manchin and Tommy Tuberville, the Power 5 conference commissioners outlined their position on how Congress can most appropriately create fair and uniform legislation to govern name, image, and likeness (NIL) in college athletics. The letter was submitted in response to the Senators’ request for more information from the commissioners.

The “NIL era” has been riddled with patchwork state legislation, differing institutional policies, and a lack of straightforward guidance from the NCAA. The NCAA has been unable to create a uniform set of rules through its internal legislative process—or enforce the rules it does have—due to antitrust concerns stemming from the Supreme Court’s decision in Alston. Because of those antitrust concerns, key college athletics stakeholders, including the Power 5 conference commissioners, have called on Congress to create more uniform NIL legislation that can be applied on a national basis.

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Uniformity is one of the conference commissioners’ critical goals in promoting a federal NIL law. Any federal legislation would preempt conflicting provisions in state NIL laws. The preemption doctrine comes from the Constitution’s Supremacy Clause, which gives Congress the ability to override any inconsistent state legislation. Where state laws might differ from a federal law, they would be invalidated. There are a whole host of reasons why the conference commissioners would like uniform NIL regulations. In addition to having more clarity for student-athletes and universities, the commissioners want everyone to play by the same rules. For example, certain state NIL laws prohibit universities from facilitating NIL deals for their student-athletes, while others do not. Some feel as though this can give universities in certain states a leg up in recruiting.

In addition to uniformity, the conference commissioners want a federal NIL law to prohibit boosters from engaging in recruiting prospective student-athletes and compensating them at an above-market rate. Over the past year, there have been dozens of boosters and booster-led collectives that have offered NIL deals as a recruiting inducement to high school athletes and current collegiate student-athletes in the transfer portal. This practice is against the NCAA’s Interim NIL Policy—which prohibits pay-for-play and recruiting inducements—although the NCAA has not enforced it yet. Here, the conference commissioners want to keep boosters away from the recruiting process and see NIL compensation tethered to a student-athlete’s marketability and brand value, not their athletic performance.

The conference commissioners also ask Congress to regulate the agents that are representing student-athletes in NIL activities. Athlete agent laws, such as the federal Sports Agent Responsibility and Trust Act and the Uniform Athlete Agents Act (which many states have adopted) were written and passed long before the NIL era. As a result, many of the laws regulating athlete agents are outdated and contain provisions that are no longer applicable. Moreover, athlete agent laws were written to regulate the agents that represent professional athletes—not college athletes.

Finally, the commissioners’ biggest request of Congress is an antitrust exemption that would allow the NCAA to enforce its prohibitions on pay-for-play and impermissible recruiting inducements. The commissioners cleverly disguise the ask by characterizing the prohibitions as furthering fair competition between schools, when, in fact, they are an anticompetitive restraint under the antitrust laws. Furthermore, they borrow the concepts of limited liability protection and chilling from distinct areas of the law, when they are really looking for antitrust immunity. Exemptions from antitrust law are unique and rare, but they do exist elsewhere in sports.

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For example, Major League Baseball has enjoyed a broad antitrust exemption stemming from a hundred-year-old Supreme Court decision. In addition to Baseball’s common law antitrust exemption, Congress has granted sports organizations a legislated exemption from the Sherman Act in the past. The Sports Broadcasting Act of 1961 allows professional sports leagues to pool the rights to broadcast their games on free, over-the-air channels. Absent the exemption, this would be—and was previously held to be—a violation of the antitrust laws.

Although many think it is unlikely that Congress would include an antitrust exemption in any federal NIL law, it remains number one on the Power 5 conference commissioners’ wish list. While there has been bipartisan interest in passing legislation, it remains to be seen if an NIL bill will make it through Congress at all.

Joshua Frieser is a Principal Attorney at Frieser Legal.