College athletes have entered a golden age where they are compensated for participating in a competition which produces hundreds of millions, if not more, in profits for colleges. The Supreme Court, in the NCAA v. Alston case, decided in 2021, certain restrictions on compensation for college athletes violated anti-trust law. The case allowed states to create parameters for student athletes to profit off their name, image and likeness (NIL). Furthermore, colleges are now permitted to share a portion of their profits off media contracts with participating athletes.
There are competing proposals in Congress on how to set up a uniform federal set of rules for NIL athletes. The bipartisan Student Compensation and Opportunity through Rights and Endorsements (SCORE) Act which protects athletes’ economic freedom versus one sponsored only by Democrats – the Student Athlete Fairness and Enforcement (SAFE) act which forces students to be employed by colleges, join a union and sets up a new bureaucracy to second guess media deals. Freedom for athletes to be allowed to do their own contracting would be the best solution to the problem of differing rules across different states.
The SAFE Act is a failed attempt to solve the problem. That legislation does not bar student athletes from being forced to be employees of their university. This would hurt the athletic programs who want to offer opportunities to Olympic athletes and women’s sports. Forcing the athletes to become employees of a school may threaten some athletic programs because of cost. Smaller schools may have revenues held back if a newly created bureaucracy, under the control of the NCAA, deemed conditions were not satisfied, including but not limited to mandated scholarship levels.
The new bureaucracy created by this proposed bill would be a complex way to distribute media rights governed by inexperienced negotiators. Media rights would be seized from colleges in an unprecedented manner to be shifted over to the government mandated commission to oversee all 136 football schools participating in the Football Bowl Subdivision (FBS) of the NCAA. This new agency would be called the Committee on Intercollegiate Sports Media Rights.
There are many conferences today which have negotiated media deals lasting a decade or more and contain options to be extended. Democrats crafted a bill which would ban schools and conferences from extending these contracts and would shift all the power to the new Committee. The revenues for some schools would hurt non-revenue generating sports. A compulsory licensing scheme, including a requirement which local broadcasters receive non-exclusive contracts, would lower the value of media rights. This form of price control would use government power to force the sharing of games without proper compensation and could be considered a “taking” by the federal government under the Fifth Amendment.
The most glaring problem is this legislation allows schools to force student athletes into becoming employees of a school. This would create a different class of students at a university which would reduce the educational opportunities for student-athletes. Another failing of the legislation is that it would not prevent the trial bar from using litigation to profit off of these schools under the pre-text of student employees being treated unfairly.
The SCORE Act is a better approach because it protects the contracting freedom for student athletes. This legislation allows participating athletes to be treated like individuals with the ultimate control over NIL rights. It provides liability protections that will prevent trial lawyers from profiting off schools and conferences. The bill protects the freedom for universities, conferences and students to have more control and avoids the idea of setting up a new bureaucracy of non-experts to govern conduct. The SCORE Act also does not strip colleges and conferences from negotiating their own unique media deals.
The SAFE Act and the SCORE Act both end a piecemeal approach of 50 different state laws which is confusing to athletes and conflicting with various legal issues. The difference is that the SAFE Act takes a collectivist approach which forces student athletes to become employees of an institution of higher education, while also setting up unionization as another costly and confusing problem. The other, more logical, approach respects the freedom to contract and allows student athletes to control their own NIL rights without government, or a school, second guessing decisions.
A commonsense approach to fixing the confusing situation we have today for student athlete NIL rights is to set up a federal framework that provides more freedom and liberty, not less for them.
Peter Mihalick is former legislative director and counsel to former Reps. Barbara Comstock, Virginia Republican, and Rodney Blum, Iowa Republican.
