The NCAA’s top governing body said Wednesday that it supports a proposal to allow college athletes to sign endorsement contracts and receive payment for other work, provided that the schools they attend are not involved in any of the payments.
A working group assembled to evaluate potential ways to modernize the NCAA’s rules about athletes making money from their names, images and likenesses presented its recommendations to the board of governors during its annual April meeting Tuesday afternoon. The recommendations included significant changes to current restrictions while also leaving room for the NCAA and schools to regulate the types of deals athletes might be allowed to sign in the future and the monetary value of individual contracts.
“Allowing promotions and third-party endorsements is uncharted territory,” board chairperson Michael Drake said in a release Wednesday morning.
The NCAA’s news release said athletes will be allowed to appear in advertisements and can reference their sport and school, but they would not be able to use school logos or branding in those advertisements.
Ohio State athletic director Gene Smith, who co-chaired the working group in charge of evaluating NIL payments, said the proposed changes will move through the NCAA’s regular rulemaking process. Member schools will have a chance to give feedback and input during the next several months. A formal proposal for the new rules is scheduled to be submitted no later than October, and the NCAA board will vote on the proposal no later than January.
Smith and co-chair Val Ackerman, who also serves as Big East commissioner, said some of the most important details about how these future moneymaking opportunities will be regulated are yet to be determined. Ackerman said finding a way to prevent boosters and “overzealous individuals” from using endorsements as a way to pay for athletic performance or recruiting enticements remains one of their chief concerns. NCAA members will have to figure out a way to use school compliance officers and NCAA staff to make sure that endorsement deals reflect a real market value for the services provided.
“It’s vitally important that we maintain some level of integrity and fairness,” Ackerman said. “We believe guardrails on boosters will help us mitigate the potential of recruiting inducements.”
NCAA president Mark Emmert said the association will also be turning to Congress for help in making the proposed changes possible. The working group’s report says the NCAA should ask the federal government to help provide “guardrails” that would create one law that applies to all schools and also to “[e]stablish an antitrust exemption for the Association” that would provide cover from future lawsuits challenging potential caps the NCAA would place on the type of endorsements athletes could make and the value of those endorsements.
“It’s clear we need Congress’s help in all of this,” Emmert said.
Federal legislators have shown interest in creating laws about how college athletes are paid in the past year, but the coronavirus pandemic and an upcoming presidential election present obstacles to quickly passing any legislation. Emmert said the NCAA could vote to approve these proposals even if Congress does not provide all the help that is being requested. He added that he thought passing a law in the coming year was “certainly within the realm of doable.”
Rep. Anthony Gonzalez (R-Ohio) said he has been working on writing federal legislation that would, in many aspects, line up with what the NCAA proposed this week. Gonzalez said he expects to formally propose his bill within the next month or two, but it’s unclear how soon members of Congress would be able to take any action on it because the priority right now remains with solving issues related to the coronavirus pandemic. He thinks a commitment to a bipartisan approach to passing the bill will help it move quickly, but he told ESPN that “D.C. never surprises me in its ability to move slowly and nonsensically.”
Gonzalez, a former wide receiver at Ohio State and in the NFL, said there are still important details for politicians and college sports stakeholders to figure out. He suggested that the government might create some type of clearinghouse to help the NCAA regulate its new NIL market. He said he is confident that answers will emerge in the coming months for one simple reason.
“We have no other choice,” Gonzalez told ESPN. “… Whether we like it or not, those questions have to be answered. Do we get it perfect? Probably not, I don’t know. But it’s certainly something that needs to be done.”
Gonzalez said based on conversations he has had in the past several months he does not believe other members of Congress will be interested in providing an antitrust exemption to the NCAA.
Rep. Mark Walker, R-N.C., said Wednesday he wants to compliment the NCAA on what could turn out to be a significant step forward, but doesn’t think the new proposals should be presented as the NCAA “doing athletes a favor” and that the NCAA should not get credit for being “dragged kicking and screaming” by lawmakers into changing its rules.
Walker said he believes an unrestricted free market remains the right option for college athletes moving forward, but wants to view what the NCAA is requesting with an open mind — including the potential for an antitrust violation exemption.
“I want to work with the NCAA,” Walker told ESPN. “Do they deserve [an exemption]? No, they probably don’t because they’ve prolonged this situation 20-25 years longer than it should have been, but I’m willing to see what they’re putting on the table and go from there.”
Walker was the first congressman to introduce a federal bill that would guarantee college athletes an opportunity to profit from their name, image and likeness.
The NCAA sees a federal solution as vital to avoid trying to operate a nationwide organization with a patchwork of different state laws.
California became the first state to pass its “Fair Pay to Play” law in September. Nancy Skinner, a Berkeley-based state senator, wrote the bill, which says colleges in her state cannot punish an athlete who accepts endorsement money from a third party or hires an agent to try to profit from his or her popularity. More than two dozen other states introduced similar legislation in the wake of California’s law, which is scheduled to go into effect in 2023.
The new proposals would still be more restrictive than what California’s law will allow. Skinner said she believes the NCAA’s announcement Wednesday morning was a good step forward, but it does not mean that states should stand down.
“The devil will be in the details,” Skinner said in a statement provided to ESPN. “I urge states to press forward with their plans and keep the pressure on the NCAA. I also look forward to closely examining the NCAA’s decision and monitoring the steps it takes going forward. Pressure from states and the public will help ensure the NCAA does the right thing — and crosses the finish line to fully give college athletes the same rights that all other Americans enjoy.”
Florida State Rep. Chip LaMarca said he was encouraged by the step forward, but he remains wary of the NCAA’s willingness to follow through on some of its initial proposals. LaMarca helped start a legislative effort that resulted in a bill that is currently waiting to be signed by Florida Gov. Ron DeSantis. That law, which is similar to California’s, would go into effect next summer.
The NCAA’s proposal remains more restrictive than the state laws and proposed laws. Those differences could lead to a legal conflict next summer if Florida’s bill is passed and Congress has not created a law that supersedes it.
NCAA leaders say it is crucial to keep the distinction between their organization and pro sports. The amateurism status allows the NCAA to defend itself against antitrust violation lawsuits and to hang on to nonprofit tax exemptions that are important to the college sports business model. This unique status has helped the NCAA carve out a niche in the eyes of federal judges who have ruled that the NCAA’s caps on what an athlete can receive from his or her school violate antitrust laws, but they have determined the schools may continue enforcing those caps because college athletes are students and not laborers.