Five Guiding Principles for NIL Legislation to Protect the Rights of Student-Athletes
Congress is considering legislation that would include unwarranted limitations on the rights of student athletes to compensation for their name, image and likeness (NIL). College sports is big business, but disparities abound so it is important to ensure that the rights of student athletes remain protected and student athletes can enforce their rights through legal remedies, including those available under the antitrust laws.
Principle 1: NIL legislation should recognize that college athletes deserve the same protections of the U.S. laws—including federal antitrust law—as any member of society.
- The NCAA and its members should not receive immunity from liability for the hundreds of millions of dollars in damages they caused to college athletes by unlawfully and unfairly colluding to ban athletes from monetizing their NIL rights.
- Immunity would be unfair and counterproductive from a gender-equity perspective, because it would disproportionately impact female student-athletes, who already receive inferior support from the NCAA than their male counterparts (see, e.g., the disparity in resources provided to the men’s and women’s basketball teams competing in this year’s March Madness tournament) and have far fewer professional sports opportunities after college, but who have the greatest NIL earning potential while in college, particularly on social media.
- Taking away the right to sue for damages would also be especially unfair to former college athletes, who were denied the ability to monetize their NILs during their playing days, but do not stand to benefit from changes to NIL rules going forward.
- No form of legal immunity for the NCAA is appropriate, and it is particularly unwarranted now when the Supreme Court is set to issue the Alston decision by the end of this month.
- Retroactive immunity for the NCAA raises serious constitutional concerns, by taking away athletes’ property rights without any compensation in consideration for what they have already lost.
Principle 2: College athletes should be free to enter NIL contracts with any third party.
- Federal legislation should place no limit on college athletes’ ability to enter into NIL deals with sponsors or other corporate business partners of the NCAA, conferences, or schools.
- The inclusion of any such provision would do nothing more than protect the NCAA and its members’ business relationships, and it would send the message that Congress is willing to legislatively condone what the NCAA has done for years – prioritize its own economic interests at the expense of student-athletes.
- If student-athletes could not receive NIL compensation from any business partner of the NCAA or its members, it would eliminate a significant portion of the NIL opportunities that athletes would otherwise have. This is because the companies that currently sponsor college sports – including virtually all major athletic apparel and sneaker brands (e.g., Nike) – are the ones most likely to enter into deals with student-athletes.
Principle 3: The NCAA, conferences, and schools should have the right to provide NIL compensation to student-athletes if they so choose.
- While NCAA bylaws have prohibited student-athletes from profiting off the use of their NILs, the NCAA, conferences, and schools themselves generate significant revenues as a direct result of their use of student-athlete NILs.
- Alternative legislation has provided for compensation by the NCAA and its members in recognition of the profits they derive from the use of student-athlete NILs, for example in the form of revenue sharing.
- Even if legislation does not mandate revenue sharing, it should not include any provision that would prohibit NIL compensation, if a school, conference, or athletic association decides to provide it. Anything else would be contrary to American free market principles and perpetuate a discriminatory system where extravagant salaries are paid to predominately white coaches, athletic directors, and commissioners, while disproportionately Black athletes in revenue sports are forbidden from receiving any NIL compensation from their schools.
Principle 4: College athletes should be able to negotiate freely for the full market value of their NIL rights—neither the NCAA, its members, nor any third party entity should be given the authority to judge whether the amount of NIL compensation offered to a student-athlete is “fair” or “justified.”
- Congress should not pass any bill that would limit the amount of NIL compensation that college athletes can receive to some artificially-determined “fair market value.”
- Any “fair market value” provision would prevent the market from freely operating for student-athletes in the same way that it freely operates for all other students on college campuses, and for all other individuals and entities involved in college sports, including coaches and athletic directors who are paid huge salaries and benefit from immensely lucrative commercial endorsements and other NIL-related deals without similar restrictions.
Principle 5: College athletes should have the right to offer group NIL licenses.
- Federal legislation should recognize the right of college athletes to join together to offer group licenses for their NIL rights.
- This is a powerful tool for college athletes to use their collective economic power to bargain with potential sponsors.
Who we are: Hagens Berman Sobol Shapiro LLP has represented classes of student-athletes in successful lawsuits against the NCAA challenging policies that limit student-athletes’ rights and freedoms and threaten their health and safety.
Hagens Berman Sobol Shapiro LLP and Managing Partner Steve Berman have achieved ground-breaking legal victories on behalf of student-athletes against the NCAA and its members in numerous cases, including a case related to the use of athletes’ images in video games, a lawsuit challenging NCAA rules artificially capping the value of athletic scholarships, a case that provided for a medical monitoring program and safety protocols to prevent concussions, and in Alston, where the NCAA has sought antitrust immunity, we represented student-athletes through a trial victory and during the appeal process, with the Supreme Court expected to issue a decision this month. We now represent student-athletes in a pending NIL antitrust lawsuit against the NCAA and its members, with hundreds of millions of dollars in NIL revenue for students at stake. See House v. NCAA, Case No. 4:20-cv-03919-CW (N.D. Cal.).