More state lawmakers introducing school-friendly NIL-focused legislation

It’s legislation season and more states are introducing bills and amendments that appear to thumb their nose at NCAA oversight and make it easier for local schools to have NIL success.

In the last couple of weeks alone, there’s been legislation introduced in Mississippi, Nebraska, Oklahoma, Utah and Virginia that directly attacks the NCAA’s NIL guidelines. Legal experts also tell On3 the multiple bills also attempt to address the employment issue in college athletics, along with confidentiality and liability issues.

“It’s all about remaining competitive right now,” Dan Greene, a NIL expert and associate attorney at Newman & Lickstein told On3. “Adapt or get left behind.”

Multiple states – including Missouri, New York and Texas – raised the irk of the NCAA in 2023 when they passed legislation that appears to provide cover for state schools from being punished by the NCAA for any NIL-related violations, including any committed by donor-driven collectives set up to support student-athletes through deal facilitation.

What were in 2023 state laws?

Some of the state laws passed in 2023 were designed to prevent the NCAA from launching investigations into NIL activities. Other pieces of legislation protected third-party entities that support an institution providing compensation to athletes.

Missouri’s law was considered by many experts as the most brazen. The state’s revised NIL legislation allows high school recruits to enter into NIL deals and start earning endorsement money as soon as they sign with in-state colleges. Interestingly, a contingent of Missouri Tiger coaches, including football coach Eliah Drinkwitz, were in the House chambers when the bill passed. 

In reference to the in-state school-friendly laws, NCAA President Charlie Baker said last summer, “They say screw the NCAA. Screw the conference. Screw their rules.”

Now more state lawmakers are attempting to help their local schools. And it’s one of the few bipartisan issues lawmakers seemingly can agree on in this volatile political climate.

What’s in some of new NIL state proposals?

Virginia Senate Bill 678 cuts to the heart of the NCAA’s oversight of NIL and mirrors much of what was passed by other states in 2023. The bill outlines multiple ways that athletic associations or conferences cannot punish a student-athlete for NIL infractions. It also appears to provide protection for schools, coaches and collectives.

Parts of the bill explicitly say that athletes or schools can’t be punished “because an individual or entity whose purpose includes supporting or benefitting the institution, or student-athletes, violates its rules or regulations concerning name, image and likeness.”

In Oklahoma, lawmakers have introduced an amendment to its Student Athlete Name, Image, and Likeness Rights Act. The amendment would allow public educational institutions and their employees to keep any student’s NIL contract disclosed to them as confidential.

Mississippi’s amendment to its Intercollegiate Athletics Compensation Rights Act has been reintroduced this year after dying in committee last year. Most importantly, the bill would add that a school may facilitate NIL opportunities for its athletes and communicate with third parties.

Utah’s first NIL bill expressly states that an athlete would not be considered an employee – something that’s also included in the Nebraska Student-Athlete Name, Image, or Likeness Rights Act.

Plus, in Nebraska, there’s another bill – Legislative Bill 1393 – that would allow any third party to compensate athletes for use of their NIL, which would contradict NCAA rules. It would also allow third parties to compensate athletes for the use of their NIL to promote events they’ll participate in and to promote their school. That’s similar to what is in the Missouri NIL law.

“These bills are following what some other states did last year,” Greene said. “Basically, they say the NCAA can’t do anything. Obviously, we don’t know if that actually means anything at this point, but it’s a step to acknowledging that the NCAA is losing substantial power.”

NIL state laws more bark than bite?

John Holden, an associate professor at Oklahoma State who specializes in student-athletes’ rights, told On3 that he’s not sure a state will ever truly tell the NCAA to get lost if they try to investigate one of their schools.

“We are going to see a lot of states trying to keep their legislation at a place similar to where they view their rival’s legislation,” Holden said. “But when it comes down to states looking to ban the NCAA – or anyone else from investigating schools – that legislation does not really mean anything to me until a state is ready to act on it and tell the NCAA to take a hike. If the school does not want to be part of the NCAA they are free to leave.”

“If the SEC schools want to say ‘Forget the NCAA, they are outdated and don’t understand college sports like SEC members do.’ Those schools can leave and start their own college athletics governing body. So, states saying ‘You can’t come in here’ is probably an empty threat in most cases. The NCAA will say ‘play by our rules or don’t play.'”

Holden also cautions lawmakers to avoid passing bans on athletes becoming employees because they could suddenly be at a competitive disadvantage if another state or the National Labor Relations Board codifies that status.

“That will likely lead to the same trickle and then wave we saw with NIL,” Holden said. “If you legislate now saying that college athletes are not employees, then when someone, like California, decides to say, ‘No, we’re going to say they are employees and provide them the same rights as other workers,’ you will see other states jump on board.”