Nic Mayne (HLS ’18) is an attorney in the Portland, Oregon office of Miller Nash Graham & Dunn. A graduate of Harvard Law School and former member of the Journal of Sports and Entertainment Law, Nic’s practice is now focused on representing educational institutions, businesses, and individuals, including those in the sports and entertainment industries. As an agent certified by the National Hockey League Players’ Association, Nic has prior experience representing professional athletes in endorsement and licensing deals as well as negotiations with NHL teams, in addition to advising younger athletes on NCAA regulatory compliance. Nic can be reached at 503.205.2336 or email@example.com.
Max Forer is an attorney in the Portland, Oregon office of Miller Nash Graham & Dunn. Max’s practice comprises outside general counsel services, providing advice and counsel on a wide and diverse variety of business and intellectual property matters to educational institutions, businesses, and entrepreneurs. Additionally, Max was a student-athlete at the University of Oregon, playing center on Oregon’s football teams (2006-10/11) that won two Pac-10 Championships and went to the Rose Bowl and National Championship. While in law school, Max also worked for Octagon Football and the University of Oregon Athletic Department. Max can be reached at 503.205.2473 or firstname.lastname@example.org.
As the NCAA and federal legislature consider various options for monolithic modernization to Name Image Likeness (“NIL”) rules, various state bills continue to progress through the legislative process. While California’s Fair Pay to Play Act, as the first state NIL legislation passed, has garnered the bulk of credit for forcing action by the NCAA on the issue, Colorado, Florida and Nebraska have since passed NIL legislation of their own. As of July 20, 2020, more than 30 other states have introduced NIL legislation.
While federal legislation may very well preempt state NIL laws before any take effect, the similarities in and differences between unique state efforts highlight some of the “Home Run” features that may garner consideration for inclusion in eventual federal law; as well as some more ambitious “Hail Mary” features of state legislation that likely will not make the cut.
Home Runs–Common Elements of State NIL Legislation
Perhaps the most common feature among state NIL bills, which has potential to dramatically impact student-athletes and the business of sports generally, is granting student-athletes the right to obtain agents or other professional representatives. California’s Fair Pay to Play Act, for example, provides that “[a] postsecondary educational institution, athletic association, conference, or other group or organization with authority over intercollegiate athletics shall not prevent a California student participating in intercollegiate athletics from obtaining professional representation in relation to contracts or legal matters, including, but not limited to, representation provided by athlete agents or legal representation provided by attorneys.”
The NCAA Board of Governors Federal State Legislation Working Group’s Final Report and Recommendations (the “Working Group Report”) seems to accept the inevitability of agent representation, listing “the use of agents, advisors and professional services by student-athletes” as a necessary regulation of newly permitted NIL activities. The form of agent regulation, while not standardized across all state NIL legislation, is usually addressed by reference to existing laws, such as the Sports Agent Responsibility and Trust Act (“SPARTA”), the Uniform Athlete Agents Act (“UAAA”), or a state-specific UAAA replication. Many also require licensure under existing state licensing regimes. However, SPARTA and the UAAA in their current forms do not provide a comprehensive solution for agent regulation, as neither is directed at a market where student-athletes can hire agents. Both, for example, require warnings in agent contracts regarding loss of college eligibility.
Another common feature, and one that educational institutions are bound to push for, is a bar on student-athletes entering into agreements that conflict with the institution’s existing sponsorships. Colorado’s NIL law, for example, provides that student-athletes shall not enter into paid agreements which conflict “with a team contract of the team for which the student-athlete competes.” Other state bills narrow this requirement, creating category-specific spaces where team contracts take precedence; Missouri and Iowa, for example, both have proposed legislation that would grant institutions priority only as to apparel, equipment and beverage contracts. Many state bills (and the Working Group Report) would further protect institutions by prohibiting compensation of student-athletes by the institutions themselves, avoiding a potentially complex licensing scenarios between institutions and its student-athletes.
Hail Marys–Ambitious Features of State NIL Legislation
While not included in any passed legislation to date, a number of introduced state bills include some form of injury fund for student-athletes. The Massachusetts NIL bill, for example, would require each institution to establish a catastrophic sports injury fund to compensate independently verified qualifying injuries. Others, including Alabama, Virginia, and New York go even further, establishing an injury and wage fund. Those bills each require institutions to deposit 15 percent of athletic event ticket sales revenue split between an injury health savings account to compensate long term and career ending injuries, and a wage fund to be divided equally among student-athletes at the end of the academic year. The Working Group Report, however, recommends that the NCAA reject any approach that “would result in NIL payments being used as a substitute for compensation related to athletics participation” seemingly taking any wage fund, and potentially even injury-related compensation, off the table.
Championing another form of the fund concept, Iowa’s bill would potentially defer NIL-related compensation, allowing institutions to require student-athletes to deposit some or all funds received from NIL ventures into a trust fund until the student-athlete is no longer NCAA-eligible.
Select state bills also include a variety of remedies for student-athletes in the event of a violation by an institution, generally including injunctive relief, and often adding damages and attorneys’ fees. Michigan’s Senate Bill 660, however, goes further, establishing a civil fine of $100,000.00 for violations of the act by an amateur sports organization, such as the NCAA.
Most state legislation recognizes the compliance issues a state-by-state approach to NIL modernization could create and opts for a delayed effective date, often as late as 2023. Hawaii’s Senate Bill 2673 gives the NCAA and federal legislature an even more generous runway, with a June 18, 2050 effective date. However, some state bills contain more ambitious effective dates. In Tennessee, for example, Senate Bill 2804, if passed, was slated to be effective July 1, 2020. Florida’s signed law also initially contained a 2020 effective date, but as enrolled would take effect July 1, 2021, giving the federal legislature time to enact preempting legislation.
While any eventual uniform approach to NIL will likely differ in many respects from state legislation, these state efforts have no doubt forced the NCAA and federal government to act, paving the way for student-athletes to monetize their NIL rights. As lawmakers including Congressman Anthony Gonzalez (R-OH) have acknowledged, many state bills fail to contemplate all of the various issues NIL modernization raises for both student-athletes and educational institutions. There is work to be done, but various elements of state legislative efforts will serve as a guide in creating federal NIL legislation that works for all involved parties. Fair Pay to Play Act, S.B. 206, 2019 Reg. Sess. (Cal. 2019).  S.B. 20-123, 2020 Reg. Sess. (Colo. 2020).  S.B. 646, 2020 Reg. Sess. (Fla. 2020).  L.B. 962, 2020 Reg. Sess. (Neb. 2020).  Search Results (National legislative search about “name, image”), Legiscan (last visited July 20, 2020), https://legiscan.com (follow National Legislative Seach box; then conduct Full Text Search for “name, image” and run in “All States”).  Fair Pay to Play Act, S.B. 206, 2019 Reg. Sess. (Cal. 2019).  NCAA Board of Governors Federal and State Legislation Working Group, Final Report and Recommendations April 17, 2020, 20 (2020).  See, e.g., Fair Pay to Play Act, S.B. 206, 2019 Reg. Sess. (Cal. 2019).  See, e.g., H.B. 3347, 2020 Reg. Sess. (Okla. 2020).  See, e.g., L.B. 962, 2020 Reg. Sess. (Neb. 2020).  See, e.g., Sports Agent Responsibility Trust Act, 15 U.S.C. §7801-7807; Uniform Law Commission, Revised Uniform Athletes Agent Act (2015).  S.B. 20-123, 2020 Reg. Sess. (Colo. 2020).  H.B. Nos. 1564, 1792, 1748, 2020 Reg. Sess. (Mo. 2020).  H.F. 2282, 2020 Reg. Sess. (Iowa 2020).  S.B. 2454, 2020 Reg. Sess. (Mass. 2020).  H.B. 82, 2020 Reg. Sess. (Ala. 2020).  S.B. 464, 2020 Reg. Sess. (Va. 2020).  S.B. 6722, 2020 Reg. Sess. (N.Y. 2020).  NCAA Board of Governors Federal and State Legislation Working Group, supra at 8.  H.F. 2282, 2020 Reg. Sess. (Iowa 2020).  See, e.g., S.B. 20-123, 2020 Reg. Sess. (Colo. 2020); S.B. 5875, 2019 Reg. Sess. (Wash. 2019).  H.B. 5217, 2020 Reg. Sess. (Mich. 2020).  See, e.g., Fair Pay to Play Act, S.B. 206, 2019 Reg. Sess. (Cal. 2019); S.B. 20-123, 2020 Reg. Sess. (Colo. 2020); L.B. 962, 2020 Reg. Sess. (Neb. 2020).  S.B. 2673, 2020 Reg. Sess. (Haw. 2020).  S.B. 2804, 2020 Reg. Sess. (Tenn. 2020).  S.B. 646, 2020 Reg. Sess. (Fla. 2020).  “While I agree with the idea in principle, California’s law fails to capture the nuance that is required to get this right.” Name, Image, and Likeness: The State of Intercollegiate Athletic Compensation, Hearings before the Subcommittee on Manufacturing, Trade, and Consumer Protection, 116th Cong. (2020) (Statement of Anthony E. Gonzalez, U.S. Rep.).