Latest trend in state NIL laws prepares for inevitable

State legislatures continue to be proactive by pushing the envelope in NIL rights given to college athletes despite resistance from the NCAA.

The willingness and quickness of legislators to introduce and pass these NIL reform bills has constantly put the NCAA in a reaction mode. And that hasn’t changed during the 2024 legislative session across the country.

The latest trend for the NCAA to deal with is legislation being introduced that would pave the way for schools to directly compensate their athletes for the use of their NIL.

Missouri – whose legislature has been a major trendsetter in the NIL legal landscape – kicked off this shift in 2023 by amending its state law to say a school shall not compensate a current athlete or prospective athlete, or the family of such individuals, for the use of the athlete’s NIL, “unless otherwise permitted by institutional policy and a collegiate athletics association that the postsecondary educational institution is a member of.”

States rushing to introduce NIL legislation

Since then, a handful of states have introduced similar legislation. For example:

+In Virginia, House Bill 1505 was recently passed by the House and Senate and sent to Gov. Glenn Youngkin’s desk. The legislation states that no athletic association, athletic conference, or other organization with authority over intercollegiate athletics shall prevent a school from compensating an athlete for the use of their NIL. This week, Younkin struck the effective date from the bill and asked the state’s Intercollegiate Athletics Review Commission to review implantation plans and have a report ready no later than November.

+Oklahoma Senate Bill 1786, which has been passed by the Senate and is currently making its way through the House, would permit schools to compensate a current or prospective athlete for their NIL if permitted by a collegiate athletics association of which the school is a member and institutional policy.

+Mississippi Senate Bill 2417 recently passed the House and the Senate and would permit a school or officer, trustee or employee of the school to compensate an athlete for the use of their NIL to the extent consistent with any legally enforceable rules of a national association, a conference or any other group or organization with authority over the sport, that promotes or regulates collegiate athletics applicable to that institution.

Other states also introducing NIL bills

+Louisiana Senate Bill 465 was recently introduced and would allow schools or an officer, director, employee or agent of such school to compensate an athlete for the use of their NIL if permitted or authorized by a court order nullifying or declaring unlawful current restrictions on player compensation, the policy or bylaws of an athletic association or school or settlement agreement or consent decree.

+Nebraska Legislature Bill 1393 would allow schools to compensate an athlete for the use of their NIL if permitted or authorized by the policy of an athletic association or school policy, a court order, or a settlement agreement.

+Rhode Island Senate Bill 2674, which was introduced in March, would allow schools or any officer, director or employee of the school to compensate a current or prospective athlete or the family of such individuals, for the use of their NIL if permitted by institutional policy and a collegiate athletics association of which the postsecondary education institution is a member.

NCAA’s plan to directly pay NIL to athletes on hold

Interestingly, it appears NCAA President Charlie Baker is open to the idea of allowing schools to compensate its athletes for NIL. Baker introduced his Project D-I proposal in December that would have permitted schools to directly pay NIL to athletes.

But that key piece of the plan is on pause because of House v. NCAA – the potentially game-changing class-action lawsuit that could open the door to schools being able to provide NIL payments to athletes for any reason, including for athletic performance – is only 300 days away from trial. Baker has been lobbying Congress for federal assistance for more than a year. No piece of legislation regarding college sports has even made it past committee rooms.

In the meantime, the list of state laws pushing back against the NCAA’s power to govern continues to pile up. The state NIL law game has proven to be competitive in itself, so do not be surprised to see other similar bills introduced and passed in the future while the NCAA continues to wait for a federal NIL bill to save them. 

Guest writer Daniel Greene, an NIL expert and associate attorney at Newman & Lickstein