The “College Athlete Economic Freedom Act” pertains directly to NIL (Name, Image and Likeness) rights for college athletes. It goes well beyond existing proposed legislation at the federal and state level, and the proposed new NCAA rules, in giving athletes broad rights, including virtually unrestricted access to earning NIL income in individual and group NIL agreements. Indeed, there are no guardrails to constrain athlete NIL income. Moreover, the Act gives athletes the right to organize through collective representation, like a trade association or 501 (c) nonprofit, which is significant for group NIL agreements and a private antitrust right to sue under the Act that makes any violation per se illegal.
This more open approach is appropriate. There is no reason why college athletes should be controlled by the NCAA, conferences or their institutions any more than other students in their attempt to earn NIL income. As long as the athlete is contracting with third parties at fair market value, other restrictions are unnecessary. While it is arguable that contracts with alcohol and gambling companies should be restricted, the NCAA does not restrict its member colleges from signing deals with such companies for ethical reasons and so athletes should not be restricted either.
Guardrails that restrict deals to third parties and fair market value, however, are necessary for the following reasons. If college athletes are allowed to enter into employment contracts with their universities (rather than only with third parties), then their relationship with the university is transformed from an educator/student relationship to an employer/employee one. Such a transformation would undermine the fundamental purpose of a college education. While this purpose has already been vitiated, it is both desirable and possible to restore the intended relationship, rather than discarding it in the name of free markets. In addition, if the college athlete is compensated in non-educational coin by the university, the contract’s terms become subject to Title IX since universities benefit from $130 billion of federal government subsidies annually. Compensation schemes that reflect athlete revenue production will only reward male athletes and, hence, violate core principles of gender equity.
A fair market value guardrail is also important because it will prevent the introduction of athlete NIL rights from devolving into an open labor market for high school and college athletes. Absent a fair market value rule, a university could arrange with a local retailer an exchange such as free use of a luxury box with catering at football games if the retailer offers $100,000 to a football recruit for making an appearance at its store to sign autographs.
The “College Athlete Economic Freedom Act” is silent on both the possibility of university/athlete contracts and on a possible fair market value guardrail. It is also ambiguous on the interpretation of the scope of NIL rights. Does it, for instance, include revenues from live broadcasting of games?
While the “College Athlete Economic Freedom Act” begs for additional clarification and definition, the bill’s broad assertion of athlete rights that goes well beyond those proposed in the Rubio, Gonzales, and Wicker federal bills, the plethora of state bills, as well as the tightly constrained proposals that the NCAA put forward and then tabled. At the very least the Murphy/Trahan College Athletic Economic Freedom Act will open up the discussion of athlete rights that have long been artificially and unnecessarily suppressed by the NCAA and, ultimately, help foster a more meaningful and equitable system for college athletes in the United States.
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February 08, 2021 at 01:20AM
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The ‘‘College Athlete Economic Freedom Act’’ Proposed By Senator Chris Murphy (D-CT) And Congresswoman Lori Trahan (D-MA) Is A Step Forward - Forbes
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