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Recap: Updates from House Committee on Small Business hearing on NIL

Nakos updated headshotby:Pete Nakos•09/20/23•

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NIL

The fight for name, image and likeness legislation on Capitol Hill continued Wednesday morning after the House Committee on Small Business hosted a hearing. Coinciding with the final day of LEAD1 Association’s Fall Summit in Washington, D.C., the legislative hearing was titled “Athletes and Innovators: Analyzing NIL’s Impact on Entrepreneurial Collegiate Athletes.”

Interestingly, no current college athletes were included in the hearing. Ohio State athletic director Gene Smith, TCU athletic director Jeremiah Donati, former Division I Student-Athlete Advisory Committee chair Maddie Salamone and former Heisman winner Gino Torretta testified in front of the committee. On3 previously reported Smith, Donati and Salamone had been tapped as witnesses.

Sources indicated to On3 that the reason behind the hearing is committee chairman U.S. Rep. Roger Williams (R-TX) has taken a special interest in NIL, which has become a popular topic for lawmakers to tackle in the last four months. Not a single bill has made it out of committee for a vote, however, and a government shutdown looms for Congress at the end of the month.

On3 covered every angle of the hearing, with multiple reporters analyzing the event in real time. This blog was updated throughout Wednesday’s hearing news, interviews and observations.

Congressional Hearing adjourned

11:54 a.m. – The ninth NIL congressional hearing in the last three years and change has come to a close. Much of the topics discussed have been broken down time and time again, with a few new wrinkles with the NCAA’s push for Congressional legislation.

What comes next? Arguably not much. If there was an emerging trend today, it was the fact multiple representatives pushed witnesses, asking if the NCAA really needs help.

Gene Smith: ‘I never wanted to come to the federal government’

11:40 a.m. – Four years ago, Gene Smith was tasked as co-chair of the NCAA’s NIL working group to develop a plan for the future. Before the state laws went into effect and before collectives existed, the Ohio State athletic director and 18 administrators and athletes had the chance to guide college athletics into its new era. 

He recognized the problems were coming. And on Wednesday, he is speaking to Congress about NIL. In a response to Rep. Peter Stauber from Minnesota, Smith was honest. His career as an athletic director began when he was 29. Now at 67 years old, college sports needs help.

“Trust me, I never wanted to come to the federal government to ask for help,” Smith said.

Rep. Bean puts pressure on NCAA oversight

11:30 a.m. – Rep. Aaron Bean from Northeast Florida opened his line of questioning by recognizing Torretta. From there, the conversation moved to whether the NCAA could actually enforce NIL or if Congressional action is needed.

The response was a mixed bag.

Rep. Landsman asks for help with his bill

11:10 a.m. – Rep. Greg Landsman from Ohio asked the witnesses for advice and any critiques of his bipartisan Student Athlete Level Playing Field Act, which he worked on with Rep. Mike Carey. Smith openly endorsed the bill when it was released in May.

Speaking to the panel of witnesses, he asked if anything could be added. Some pointed towards the need for an agent registry and pay-for-play prohibitions. Salamone said she thought the bill was too broad.

“Everything and the kitchen sink,” she said. “I’m generally of the opinion they should be done separately.”

She went on to say that the NCAA has “abdicated the throne” when it comes to NIL enforcement.

Rep. McGarvey quiets the room

10:55 a.m. – Kentucky Rep. John McGarvey wasted no time in his questioning. In the first 60 seconds, he placed an emphasis on how badly the NCAA needs help. His questioning was met with silence, which then forced the chairman to ask the witness to speak.

From there, McGarvey turned to Salamone who brought up the need for a players’ association and collective bargaining.

Congresswoman Velázquez questions collectives, Title IX

10:45 a.m. – Congresswoman Nydia Velázquez, a Democrat from New York, had no problem taking her five minutes and pointing it right at the role of collectives and whether how they operate violates Title IX. Pressing Salamone, Velázquez specifically asked if collectives and schools are working closely together at this point in NIL.

Salamone calls out NCAA’s agenda

10:35 a.m. –  Former Division I Student-Athlete Advisory Committee chair Maddie Salamone had no problem calling out the NCAA’s agenda in her opening remarks.

“Continual discussion about NIL, antitrust exemptions and even employment status of athletes are a distraction created by the NCAA and member schools and exacerbated by the media’s constant coverage of the topic,” she said early in her statement.

Salamone emphasized how NIL is not a novel concept, it’s existed for years in professional sports and other industries. She also discussed how NIL has bettered athletes through tax education and the opportunity to be entrepreneurial.

Smith shares details of NIL at Ohio State

10:25 a.m. – In his five-minute opening remarks to the committee, Ohio State athletic director Gene Smith pushed for NIL reform and called out “bad actors” operating in the space. He also shared some details about NIL deals at Ohio State.

Donati makes opening statement

10:20 a.m. – TCU athletic director Jeremiah Donati outlined the challenges facing college athletics due to NIL, using the term “Wild, Wild West” in his statement to describe the landscape.

Donati believes that Congress can bring “uniformity, transparency and fairness to the administration of NIL” through agent oversight, standardized contracts, a national “clearing house” and elimination of pay-for-play. The athletic director also does not believe the current college sports model is sustainable.

“And while NIL ‘collectives,’ often set up under 501c(3) status, have provided universities with an efficient tool to fulfill NIL opportunities from donor support outside of direct institutional control, the governance and oversight of these organizations has been inconsistent in its application and in desperate need of uniform oversight.”

Chairman outlines what he hopes to learn

10:10 a.m. – Small Business Committee chairman Roger Williams opened the hearing with a statement, outlining what he knows already about the NIL space and what he hopes to learn from Wednesday’s hearing.

The chairman includes he wants to learn and more on:

  • The role of NIL collectives in the space
  • The impact NIL has had out non-revenue-generating sports
  • What revenue sharing would mean for Olympic Sports
  • How these changes are impacting graduation rates
  • How smaller market schools will fare if athletes are lured away because of NIL

The term “bad actors” has already popped up a number of times in the first 10 minutes.

“I’m weary of other federal government agencies will be able to stop these bad actors, but it’s important to bring attention to it,” Williams said.

Hearing begins

10 a.m. – The House Committee on Small Business hearing is underway. How the legislative session plays out remains to be seen. While it’s clear three witnesses – Smith, Donati and Torretta – have views that align with the NCAA’s, the questioning should be a strong gauge of the committee’s interest in NIL.

It should be noted seven NIL collectives, all members of The Collective Association, have made the trip to D.C. While not invited to speak at the hearing, their hope is to receive some time with the chairman.

Testimonies released before start of NIL hearing

9 a.m. – Testimonies have been posted on the Small Business Committee’s website ahead of today’s hearing at 10 a.m. ET. A few notes already stick out, just from quickly breezing through. Ohio State athletic director Gene Smith clearly plans to bring the pay-to-play environment into the spotlight, providing some legitimate proof of what his coaches now experience.

“A practice of asking a school for a fee to simply visit campus has emerged; asking for $5,000 just to visit has become common,” he writes in the document posted on the committee’s website.

Former Miami quarterback and Heisman winner Gino Torretta will also testify on NIL. In his statement submitted ahead of the hearing, he does not provide any concrete details about his experience in NIL in the last two years and change. He clearly pushes for a standard NIL contract, strong enforcement measures and bringing NIL collectives under the guidance of athletic departments.

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