New Congressional NIL Bill Targets Expansive Change to Athlete Compensation, Video Game Licensing

Unrestricted athlete name, image and likeness rights and video game licensing are both part of the legislation.

WASHINGTON, D.C. — A new Congressional bill grants college athletes the right to strike collective bargaining agreements to maximize group licensing deals, while prohibiting schools from both restricting compensation to college recruits and regulating athlete agents.

The latest Congressional legislation governing athlete compensation, authored by Sen. Chris Murphy (D-Conn.) and Rep. Lori Trahan (D-Mass.), allows college athletes unrestricted use of their name, image and likeness (NIL), penalizing schools for imposing rules that curb those rights.

The College Athlete Economic Freedom Act is the fifth different NIL Congressional bill introduced in the U.S. Capitol over the last year, following a wave of state NIL laws that are on the brink of ending the NCAA’s amateurism model. Murphy, one of the most outspoken lawmakers for athletes’ rights, has harshly criticized the NCAA for its archaic policies, at times defining them as Civil Rights violations.

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As expected, his bill is not friendly to the governing body of college athletics but is not as expansive in nature as the College Athletes Bill of Rights, released in December by Sens. Richard Blumenthal (D-Conn.) and Cory Booker (D-N.J.). In a way, Murphy’s bill is a Democratic-leaning version of a bipartisan bill introduced in the fall by Rep. Anthony Gonzalez (R-Ohio). Two other right-leaning bills have been introduced as well, from Sen. Roger Wicker (R-Miss.) and Sen. Marco Rubio (R-Fla.).

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In fitting timing, the College Athlete Economic Freedom Act was announced two days after EA Sports announced the eventual return of its popular college football video game. The bill would grant athletes the ability to enter into group licensing agreements, allowing their names to be used in such endeavors as video games and jersey sales.

“Big-time college athletics look no different than professional leagues, and it's time for us to stop denying the right of college athletes to make money off their talents,” Murphy said in announcing the bill. “If predominantly white coaches and NCAA executives can have unfettered endorsement deals, why shouldn’t predominantly Black athletes be afforded the same opportunity?”

In an athlete-friendly provision, the bill grants college recruits open access to NIL rights, prohibiting the NCAA, schools and conferences from creating guardrails that restrict prospective athletes’ compensation. This concept touches at the heart of the raging debate over NIL, with the NCAA fearing that, without guardrails, schools will use NIL as a way to gain a recruit’s commitment. The legislation grants athletes the ability to retain agents to strike NIL deals and prohibits the NCAA from regulating any athlete representation—another sticking point with college administrators.

In a unique concept, Murphy’s legislation allows colleges to work directly with athletes, if they choose, rather than only allowing NIL deals through third parties.

The bill gives the NCAA no antitrust protections and, in fact, includes antitrust penalties if college, conferences and the NCAA violate the law. Violators would have little defense or standing against an antitrust claim for denying opportunities for athletes. The bill grants athletes a private right of action to pursue civil action against violators and authorizes the Federal Trade Commission to enact “unfair or deceptive practice” penalties against violators.

The legislation does grant one provision that the NCAA has asked of Congress: it preempts state laws governing NIL.

At least six states have passed NIL legislation while more than 30 others have either introduced or are seriously exploring passing their own bills. Iowa became the latest on Wednesday. California’s state law in 2019 sparked the movement now sweeping across America for college athletes’ rights. Florida’s state law, passed last year, will be the first to take effect—on July 1.

While states are expediting NIL, the NCAA and Congress are falling behind in creating their own legislation. The NCAA was expected to pass groundbreaking NIL legislation in January but has delayed the measure in light of a Supreme Court case (Alston v. NCAA) that could impact the organization's rules on amateurism and antitrust. The Supreme Court is expected to hear the Alston case on March 31 and deliver a ruling no later than the end of June.

In the meantime, Congress, while eyeing a federal solution, is encumbered with a host of other more important topics, such as the economy and COVID-19. There also exists a deep divide on the issue between Republicans and Democrats on Capitol Hill.

The states are taking charge, and their NIL bills are expected to grant more freedoms to athletes than anything proposed by the NCAA. It sets up a potential litigation showdown this summer as the governing body of college sports attempts to block or slow states such as Florida from having its universities adhere to more liberal state laws.