Last year, I scored the first 25 state NIL laws for their pay restrictions. My study—“Do College Athletes Get NIL?”—is already out of date. That’s how fast NIL has changed. This week, I will present my research to a Nevada legislative committee.
Here’s what I plan to tell those legislators—and any others addressing the new generation of college athlete “NILionaires”:
1. Require NIL agents to register in your state. Only 12 states in my study do this, including Nevada. It’s a powerful tool for ensuring that 18-to-21-year-olds are represented by licensed attorneys or financial advisors, not charlatans.
2. Regulate collectives, the giant funnels for paying players to play. They are largely unregulated. Start simple: Require collectives to incorporate in your state. Make sure any person can sue them in your courts.
Understand, however, that collectives are the payroll operation for college teams. Because they are financially connected to schools—especially public schools that are exempt from federal labor law—they will likely be treated as “joint employers” for your public schools. That exposes schools to becoming unionized—but that’s inevitable, so regulate them.
3. Five states prohibit employment of athletes as part of NIL deals (Illinois, Ohio, Texas, Mississippi and Arkansas). This idea is absurd: In Texas alone, collectives offer lavish deals.
4. Put in an employment trigger law: If any other state, federal court or agency, or Congress declares that college athletes are employees, your state should have a trigger that syncs to whatever the external law says. Understand that NIL leads to employment.
5. Allow your college athletes to bargain collectively. This is a counter-intuitive idea until you understand that collective bargaining allows conferences and the NCAA to negotiate hard salary caps. This is essential for restoring competitive balance.
States with schools in the SEC, ACC and Big 12 loathe unions. But they should realize that a player’s union will benefit their schools. NFL players decertified their union while the NFL argued that players can’t do this: It’s because professional sports leagues have leverage over a union, and can avoid crippling antitrust lawsuits.
6. Avoid being like Illinois, which has the “Student-Athlete Endorsement Rights Act.” NIL is beyond endorsements. Illinois enacted the most pay restrictions in the nation—45.
The University of Illinois recently lost All-American center Kofi Cockburn to the NBA draft, even though his NBA prospects are marginal. The Kentucky Wildcats, in a state with only 17 NIL pay restrictions, had more legal room to make a $2 million deal for Oscar Tshiebwe, their star center. Even with the recent passage of amendments in HB 1175—which rolled back the ban on schools facilitating NIL deals between athletes and third parties—Illinois continues to have the most restrictive law in the nation, which completely bars athletes from suing their schools over deals gone wrong.
In sum: Regulate with a light touch. Get ready for employment of college athletes. Finally, consult with athletic directors—but don’t hand them a pen to write your laws. They have already proven themselves shortsighted in managing college athletics in the age of player compensation, beginning with their repeated use in NIL laws of the outdated term “student-athlete.” Be more realistic: Use “college athlete.” Consult labor lawyers for pro sports leagues, and those who successfully litigate antitrust claims for NCAA players. Legislate for the future, not the past.
Michael H. LeRoy, a professor at the University of Illinois, has published multiple law review articles on college sports, as well as the book, Collective Bargaining in Sports & Entertainment: Professional Skills and Business Strategies.