A Win Win: College Athletics Get Paid for Their Names, Images, and Likenesses and Colleges Maintain the Primacy of Academics

Abstract

California Governor Gavin Newsom signed the Fair Pay to Play Act (SB 206) into law on September 30, 2019. The bill made it illegal for California’s universities to prohibit college athletes from receiving compensation for use of their Names, Images, and Likenesses (“NILs”). Lawmakers soon introduced similar bills in other states and in Congress.2 The National Collegiate Athletic Association (“NCAA”) lobbied vigorously against SB 206 after its introduction in the California state legislature, threatening to prohibit all of the state’s fifty-eight member colleges from postseason play if the bill went into effect at the specified date in 2023.

The NCAA also threatened to sue to block the law3 based on the Commerce Clause of the U.S. Constitution,4 which prohibits states from enacting legislation that unduly impacts commerce beyond its borders.5 The Fair Pay to Play Act collides with the NCAA’s long-time insistence that college athletes be amateurs and thus not receive pay for playing or their athleticism.6 Indeed, payments to college athletes for NILs could blow up its amateurism model, which prohibits athletes, unlike other students, from receiving pay for activities including signing endorsements, permitting video games to use their likeness, sponsoring athletic camps, selling jerseys and other apparel, and monetizing social media.

Confronted with snowballing legislation and lawsuits, along with a growing public consensus that the status quo exploits high-profile college athletes, the NCAA sought to regain control by forming a nineteen-member committee to examine the feasibility of NIL payments to student-athletes (“NIL Committee”).

After California passed SB 206, the NIL Committee gave the NCAA Board of Governors (“Board”) an interim report that tentatively green-lit NIL benefits for athletes but also recommended myriad guidelines and restrictions. Specifically, on October 29, 2019, the Board announced that it had voted to allow athletes generally to receive NIL benefits “in a manner consistent with the collegiate model”7 and requested that each of the NCAA’s three Divisions draw up plans for implementation by January 2021.

Part of the NCAA’s concern with SB 206 and other state initiatives around NIL payments is that it would be unworkable to have a national organization with rules and regulations that differ on a state-by-state basis. Indeed, the bills introduced in the South Carolina and New York state legislatures allow for schools to pay athletes directly,9 while SB 206 allows schools to make NIL payments to current students (not prospective students) and for payments from third parties.10 The New York bill also stipulates that fifteen percent of a school’s athletic department revenues go to pay for its student athletes.11 Florida’s NIL bill would go into effect on July 1, 2021, much earlier than other states.12 Fortunately, the prospect of a patchwork of varying state laws appears unlikely to eventuate because Representative Mark Walker, R-North Carolina, has introduced a NIL bill in the U.S.

House of Representatives that would create a uniform federal system.13 Similarly, Senators Chris Murphy, D-Connecticut, Mitt Romney, R-Utah, and Marco Rubio, R-Florida, have discussed introducing a NIL bill in the U.S. Senate and the Senate’s Commerce Committee held a hearing on the matter in February 2020.14

In this Article, we explain the history and role of amateurism in college athletics (Part I); the legal landscape of amateurism and paying college athletes, including NIL payments (Part II); the potential scope of NIL payments (Part III); and the NCAA NIL Committee’s recommendations (Part IV). We conclude by offering a public policy proposal for implementing circumscribed NIL rights for college athletes (Part V).

Keywords: Sports Economics, Sports Law, Intercollegiate Athletics

JEL Classification: H20, J01, J30, K21, K31, L83