Following today’s hearing, “Taking the Buzzer Beater to the Bank: Protecting College Athletes’ NIL Dealmaking Rights,” what are the takeaways from Congress’ first hearing on college sports since 2021?
Called by Reps. Cathy McMorris Rodgers (R- Washington) and Gus Bilirakis (R – Florida), the House Energy & Commerce Committee “is working to ensure a clear set of rules for male and female athletes of every sport to benefit from their name, image and likeness.”
Along with Rodgers and Bilirakis, Reps. Schakowsky (D – Illinois), Pallone (D – New Jersey) and Trahan (D – Massachusetts) provided opening statements. The hearing’s witnesses were: Patriot League Commissioner, Jennifer Heppel; Virginia State University President, Makola Abudallah; former NFL and University of Florida football player, Trey Burton; current Florida State University softball college athlete, Kaley Mudge; Washington State University director of athletics, Pat Chun; and College Football Players Association founder, Jason Stahl.
Across opening statements and witness testimony, three areas of focus for Congress were signaled:
- How to regulate college athletes’ NIL rights;
- Whether college athletes should be categorized legally as employees; and
- How to ensure the health, safety and wellbeing of college athletes
Reference was repeatedly made to the “patchwork” of individual state laws governing college athletes’ NIL rights.
This body of state law was set in motion by California, which in 2019 enacted the “Fair Pay to Play Act,” making it illegal for the state’s colleges and outside governing bodies, like the NCAA, to prevent California college athletes from exercising their right of publicity.
The right of publicity allows an individual to commercially exploit their name, image and likeness. The right first emerged in the United States in 1953 in Haelen Laboratories, Inc. v. Topps Chewing Gum, Inc., a federal court decision recognizing the commercial value held in a famous person’s likeness. Subsequently, the right has expanded through the development of common law and enactment of state statutes. At least 30 states recognize citizens’ right of publicity. However, no federal right of publicity has been enacted by Congress.
Notably, college athletes in states recognizing the right of publicity possessed the right to profit off of their NIL before the NCAA began allowing them to in 2021. It was only the NCAA’s bylaws that restricted them from exercising this right. Notably, for college athletes competing in states recognizing the right, this meant that NCAA athletes were restricted from exercising a right all other citizens in the state could take advantage of.
It is from this realization that Congress must act as it seeks to legislate around NIL.
Testimony from today’s hearing signals how NCAA conferences, universities and athletics departments want Congress to narrow college athletes’ right of publicity.
At the core of testimony from various witnesses came signs of a desire to require college athletes to disclose their NIL deals. Further, it seems that there may be appetite to regulate NIL agents and the NIL representation contracts they sign with college athletes.
All of the above may seem innocuous and in the best interest of college athletes. But such maneuvers would cut against existing law and prompt questions about the NCAA’s broader motives. That’s because existing law could be utilized to address these issues, with one caveat: doing so would require recognition of college athletes as employees.
As it relates to mandating college athletes to disclose their NIL deals, consider this: existing state right of publicity statutes do not require other state citizens to disclose their endorsement deals.
In certain professions, employees are required to disclose outside employment, including endorsement deals. For instance, professors often are required to disclose such, due to possible conflicts of interest created.
Thus, passing federal legislation isn’t required for college athletes to disclose their NIL activity to their respective university. Rather, such requirement could—and should—emerge through contract law.
This, though, is where things get sticky—and why the NCAA likely wants Congress to legislate in this area.
Professors are university employees. Such disclosure requirements exist in their employment contracts. Historically—and iterated today in witness testimony—the NCAA has adamantly worked against recognizing the employee status of college athletes.
So, in that realm, it is unlikely that the NCAA or its member institutions would be interested in negotiating the requirement of such disclosures in an arm’s length employment negotiation.
The employee status of college athletes also factors into the regulation of NIL agents and the contracts they enter into with college athletes.
Athletes in the United States’ major professional sport leagues—like the NBA, NFL and WNBA—are unionized. Unionization is a right granted under a federal law, the National Labor Relations Act. The law only grants employees—and not every worker—the right to unionize.
American professional sport unions have delegated their right to negotiate individual professional athletes’ employment contracts to sport agents. To ensure that professional athletes are properly protected in this process, the unions certify agents. Certification processes vary by players association, but typically include background checks, education requirements and in some instances, passing a test and completing continuing education. The sport unions set ceilings on the fees agents can take from clients and also draft and require agents to enter into a standard form representation agreement with the athletes they represent.
That this mechanism exists—and is standard practice in American sport—signals the lack of need for Congress to legislate around it. But, taking advantage of the mechanism would again require the NCAA to do what it doesn’t want to do–recognize the employee status of college athletes.
So, what is needed?
At the most basic level, Congress must enact a federal right of publicity. This bill is important not only for college athletes’ rights, but as a burgeoning influencer economy grows and the value of data–particularly biometric–expands, every American citizen.
The law must apply equally and fully to all American citizens. If an organization wants to narrow a group of Americans’ rights, contract law can be utilized.
Further, Congress should deeply consider the employee status of college athletes. Existing law can be applied to assess whether college athletes are employees. In fact, the Right to Control test plausibly supports the reality that most college athletes—at least in revenue producing sports—are employees of their universities. Congress should be aware of the deep ramifications—particularly from a civil rights perspective—in enacting a law proclaiming that college athletes are not employees.
The NCAA and some conferences are increasingly spending to lobby Congress in part to enact NIL-related legislation. If Congress examines existing federal law, though, it will recognize that answers already exist for the questions NCAA leaders have around how NIL should operate.
Get the free weekly newsletter so you can win the game.