Name Image Likeness

State Senators Release Statement Opposing NIL Revenue Sharing Settlement

Reprasentatives from California, Nebraska, and Oregon claim that the House v. NCAA settlement contradicts state NIL law in 17 states

Noah Henderson

Nov 30, 2024; Eugene, Oregon, USA; Puddles plays with a referee during the second half in a game against the Washington Huskies at Autzen Stadium. Mandatory Credit: Troy Wayrynen-Imagn Images
Nov 30, 2024; Eugene, Oregon, USA; Puddles plays with a referee during the second half in a game against the Washington Huskies at Autzen Stadium. Mandatory Credit: Troy Wayrynen-Imagn Images / Troy Wayrynen-Imagn Images

Today, four NIL lawmakers from California, Nebraska, and Oregon released a joint statement with the National College Players Association (NCPA) expressing concerns about the terms of the highly publicized House v. NCAA settlement: California Senators Nancy Skinner and Steven Bradford, Nebraska Senator Megan Hunt, and Oregon Senator James Manning Jr. 

The preliminarily approved House v. NCAA settlement awaits a final hearing from Judge Claudia Wilken this April. If the settlement is officially approved, several novel fixtures will be added to college sports, including roster limits, direct institutional revenue sharing of up to $20,500,000 per school to athletes, and an NCAA-run clearinghouse that intends to disallow ‘pay-for-play’ NIL collective payments that have become the primary vehicle of athlete compensation since 2021.

The state senators take exception to the proposed restrictions on NIL collectives, claiming that these restrictions would contradict state NIL law, which “explicitly prohibit conferences and the NCAA from restricting our athletes’ NIL freedoms and compensation.” 

The proposed NCAA restrictions would not limit deals for bonafide sponsorship arrangements (i.e., a commercial featuring a college football star), but they would prevent illusory endorsement contracts that compensate student-athletes primarily for their on-field efforts. 

Booster-funded NIL collectives are private third-party companies, separate from the university they represent, that solicit donations from university alumni to pay salaries to their players on the field: those schools with the most NIL funding are able to recruit and poach the highest touted athletes to their team. 

According to Opendorse figures, 82% of NIL compensation comes from NIL collectives. In an era of direct institutional revenue sharing, that figure is likely to dwindle, but without restrictions, it is anticipated that NIL will still pay a sizeable amount to student-athletes. 

The NCAA, seeking to maintain sovereignty and promote competitive equity, has enshrined the $20,500,000 NIL revenue-sharing provision as a de facto salary cap. If schools can continue using donors’ wallets to compensate student-athletes through NIL collectives beyond the proposed cap, any competitive equity benefit of the revenue-sharing system will be negated. 

The NCPA has indicated that 17 states currently have NIL laws that the settlement’s NIL ‘pay-for-play’ clearinghouse would contradict. The state senators have indicated that their current state law supersedes any rule implemented by the NCAA, "we are sending letters to the universities in our state to clarify that, even if this settlement is granted final approval, our universities, conferences, and the NCAA are prohibited from imposing such NIL restrictions on athletes and universities in our state."

If those schools in those states, and only schools in those states, do not comply with the House v. NCAA settlement, it would usher in an unprecedented level of incongruity within the college athletics landscape. 

Schools in non-protected states would be subject to a salary cap, and schools in anti-NCAA enforcement jurisdictions could compensate athletes beyond the $20,500,000 cap. Like most revisions to state NIL law, if even one state disobeys the settlement terms through statutory language, other states would almost immediately amend their laws to give their athletes the same freedoms to pursue NIL collective earnings. 

Just as the NCAA looked to have restored some limited autonomy to their enforcement, a new challenge appears on the horizon, even if the House v. NCAA settlement is fully approved in April. 

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Noah Henderson
NOAH HENDERSON

Professor Noah Henderson teaches in the sport management department at Loyola University Chicago. Outside the classroom, he advises companies, schools, and collectives on Name, Image, and Likeness best practices. His academic research focuses on the intersection of law, economics, and social consequences regarding college athletics, NIL, and sports gambling. Before teaching, Prof. Henderson was part of a team that amended Illinois NIL legislation and managed NIL collectives at the nation’s most prominent athletic institutions while working for industry leader Student Athlete NIL. He holds a Juris Doctor from the University of Illinois College of Law in Urbana-Champaign and a Bachelor of Economics from Saint Joseph’s University, where he was a four-year letter winner on the golf team. Prof. Henderson is a native of San Diego, California, and a former golf CIF state champion with Torrey Pines High School. Outside of athletics, he enjoys playing guitar, hanging out with dogs, and eating California burritos. You can follow him on Twitter: @NoahImgLikeness. 

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