The House Innovation, Data, and Commerce Subcommittee’s “Taking the Buzzer Beater to the Bank: Protecting College Athletes’ NIL Dealmaking Rights” hearing on Wednesday featured a lot of talk on a topic now controlled by the states.
Much less time was devoted to concrete ways Congress might act on NIL and why it would do so.
The hearing had six witnesses: Patriot League commissioner Jennifer Heppel; Virginia State president Makola Abdullah; former NFL player Trey Burton; Florida State softball player Kaley Mudge; Washington State athletic director Pat Chun and College Football Players Association executive director Jason Stahl. Although the hearing centered on whether Congress should pursue a federal NIL law that would preempt the NIL laws of more than 30 states, none of the witnesses was an attorney.
The discussion tackled the proposition that there are meaningful differences in state NIL laws, and that those differences create advantages for schools and athletes in some states and disadvantages for those in other states. However, real-world illustrations of that proposition were largely absent.
Toward the end of the hearing, Rep. Debbie Lesko (R-Ariz.) pointedly asked for “specific examples,” rather than rhetoric or theory, of state variations impacting schools and college athletes.
Chun responded, saying because Washington lacks an NIL statute, his program is governed by more stringent state ethics laws. Those laws, as he termed them, prevent Washington State from steering athletes to collectives as schools in other states can utilize.
Similar examples of college athletes being harmed by variances weren’t part of the nearly three-hour conversation, though there were occasional, if opaque, references to “unscrupulous” agents and other parties.
At another point in the hearing, Heppel opined that one challenge in talking about specific NIL situations is a lack of “transparency” in the data. Some NIL deals, or at least details about them, are not reported. Relying on what she termed “anecdotal evidence,” Heppel believes NIL is sometimes used as “recruiting inducements to enroll out of high school or transfer.” A federal NIL law could provide the same set of rules for athletes and schools across the country and require that NIL deals are centrally reported. Congress considered such a law in 2021 but failed to act.
The panel noticeably lacked a witness from the NCAA, be it new president Charlie Baker or another executive. Such a witness might have addressed how the NCAA already prohibits NIL from being used by collectives as pay-for-play and inducements. The NCAA has been reluctant to enforce that prohibition, out of concern for being sued under antitrust law. Whether those are valid concerns is a point of debate, especially when antitrust law generally permits rules that are regarded as reasonable and flexible. The NCAA has sought an antitrust exemption to enforce NIL rules.
Some of the hearing featured questionable remarks about the law and uncertainty about what, if anything, Congress ought to do about NIL.
Rep. Cathy McMorris Rodgers (R-Wash.), who is chair of the House Energy and Commerce Committee, said:
“The Supreme Court blew the whistle on the NCAA in 2021 as it unanimously ruled that it could no longer prohibit college athletes from receiving compensation for their NIL. The ruling could not have been clearer. The NCAA was overly restrictive in its prohibition of athletes profiting from their NIL.”
The Supreme Court’s ruling in NCAA v. Alston concerned the NCAA and its member schools violating antitrust law by restricting how each school offers education-related benefits. NIL is about athletes signing contracts with third parties to commercially use their identity. The NCAA permitted college athletes to sign NIL deals on July 1, 2021, because states adopted NIL statutes effective on that same date making it illegal for the NCAA to continue its prohibition.
The rights of women athletes in college also surfaced as a topic. Rep. Lori Trahan (D-Mass.), a former volleyball player at Georgetown University and sponsor of the Fair Play for Women Act, noted that “the Department of Education allows colleges to exploit loopholes like overcounting women athletes, double or triple counting them or even counting male athletes as women to comply with Title IX on paper.” She added, “We can’t talk about NIL rights, particularly for women athletes, without talking about how some schools exploit loopholes to deprive women of the opportunity to play in college in the first place.”
The hearing also touched on the prospect of college athletes as employees. Rep. Tim Walberg (R-Mich.) expressed worry about what he called the “radical” National Labor Relations Board recognizing college athletes as employees. In response, Heppel described the relationship between an athlete and their college as “not an employer-employee relationship,” and she opined “it would be incompatible to consider the student-athlete an employee in that relationship.” Abdullah largely concurred with Heppel.
Following the hearing, Baker issued a statement saying he hopes Congress can take action to address the “exploitation” of college athletes “by bad actors.”
To date, not one NIL bill has made it out of committee in Congress and none has received a vote. Meanwhile, the U.S. Court of Appeals for the Third Circuit is considering whether college athletes are employees under the Fair Labor Standards Act and the NLRB is considering the same question under the National Labor Relations Act.