Congressional hearing highlights challenges of NCAA's strategy of pursuing federal NIL legislation

WASHINGTON – For the first time since Republicans gained control of the U.S. House of Representatives in the 2022 elections, a panel of lawmakers on Wednesday turned its attention to the NCAA’s ongoing issues in dealing with college athletes making money from use of their name, image and likeness (NIL).

But a hearing by the Energy and Commerce Subcommittee on Innovation, Data and Commerce quickly illuminated many of the basic difficulties the NCAA faces in its quest for what it sees as a solution to varying state NIL laws and a variety of other legal problems, including continuing antitrust exposure.

In his opening statement, subcommittee chair Gus Bilirakis, R-Fla., said a “federal standard is needed” regarding athletes’ NIL activities. And the full committee’s ranking member, Frank Pallone, D-N.J., said in his opening that while dealing with NIL issues is a start, Congress also must address athletes’ health and safety, their right to organize and schools’ gender-equity problems.

So, there seemed to be a bipartisan acknowledgement that there is a problem – and there seemed to be a bipartisan willingness to act. As with many other things in Congress, though, it gets harder from that point. A lot harder. And this is just on the House side.

Senators, acting basically along party lines, have offered several bills related to college sports and NIL over the past few years. There has been a narrowly drawn proposal that basically addresses only NIL activities. There has been broad version dubbed the College Athlete Bill of Rights. None have advanced.

What’s at issue with NIL?

Led by California in September 2019, states began enacting laws that made it easier for college athletes to make money or other forms of compensation from endorsements, public appearances and signing autographs, among other ventures. Those laws have had varying – and shifting – parameters for what is allowed, what is prohibited and what, if anything, about these deals must be reported or disclosed.

Against that backdrop, booster- and business-driven collectives have formed to pool resources and NIL opportunities for athletes at various big-time schools. And this past October, the NCAA issued guidance allowing school personnel, including coaches, to assist a collective with fundraising and allowing schools to request that donors provide money to a collective. Now, questions are being raised – including during Wednesday’s hearing – about the degree to which collectives are providing equal opportunities for female athletes.

Legal hurdles to finding a solution

Meanwhile, the Supreme Court has ruled that the NCAA’s limits on education-related benefits to athletes violated antitrust laws. The National Labor Relations Board’s general counsel has issued a memorandum that says she views college athletes as employees of their schools under the National Labor Relations Act – a move that Rep. Tim Walberg, R-Mich., criticized Wednesday as being a product of a “radical” NLRB.

One newer legal case basically seeks to eliminate the NCAA’s remaining limits on athlete compensation and obtain hundreds of millions of dollars in damages for former athletes based on the value of money-making opportunities they were prohibited from having. Another case seeks to further advance the notion of athletes as employees of their schools, although Florida State softball player Kaley Mudge, appearing as a witness Wednesday, said she is against the idea of athletes becoming employees. And California’s legislature, for the second consecutive year, is debating a bill that would create what amounts to a revenue-sharing plan for athletes.

Impact on college athletics

In her prepared remarks filed with the subcommittee before testifying at the hearing, Patriot League commissioner Jennifer Heppel objected to changes that would deem athletes as employees and implied some schools in her league would walk away from athletics if that happened.

"The absence of rulings or determinations that would allow for the legality of the current non-employee model to continue would likely represent a breaking point for the sponsorship of athletics programs at Patriot League institutions."

The degree to which any or all of this constitutes an existential crisis for college sports can be debated. But Washington State athletics director Patrick Chun said after the hearing: “All of the issues that are surrounding college athletics are really interwoven together.”

In an interview with USA TODAY Sports outside the hearing room, Rep. Lori Trahan, D-Mass., said: “I'm really motivated to have a federal standard that protects athletes in place. And I think these conversations are important because we know a little bit more about what the natural landscape looks like today. But we also know that there are a lot of loopholes.”

Possible NIL legislative paths filled with challenges

Rep. Neal Dunn, R- Fla., said “Congress does need to act” and “impose guardrails” that would back existing NCAA rules prohibiting pay for play for athletes.

Jason Stahl, the executive director of athlete-advocacy group called the College Football Players Association, said in witness testimony that Congress should not act in any way that limits athletes’ ability to make money from NIL deals and that there should be bargaining between schools and athletes, including over the use of their NIL in live television broadcasts.

Chun called for an entity or process that brings clarity to the NIL marketplace.

“I don't know if that's from a national level or a conference level or state level, a local level on our campuses,” he said after the hearing. “But … the highest priority is to ensure that our student-athletes can fully ascertain what their market value is, (and) have benchmarking on what actual contracts should look like or could look like, even down to what commission lawyers or agents are charging.”

Trahan captured the challenge in all of this.

“We have to make sure that there's rules of the road,” she said, “but … when you put a federal or a national standard or framework in place, we have to make sure that everybody has accessibility and everybody is treated fairly. And that's going to require a unique framework that we haven't seen in college sports.”

The challenge for passing federal legislation goes beyond a solution in the House. It also includes finding common ground with the Senate, which has had members from both parties pursuing their own separate bills. An agreement between the two sides would need to be found before legislation could go to the White House.

This article originally appeared on USA TODAY: NCAA pursuing NIL legislation in Congress has challenges in hearing