NIL rights in limbo in North Carolina despite NCHSAA rule change

For now, athletes who attend member high schools of the North Carolina High School Athletic Association will be allowed to monetize their name, image and likeness rights while retaining their athletic eligibility starting July 1, 2023. The NCHSAA board of directors approved an NIL policy proposal last week.

North Carolina is now one of 28 states, plus Washington, D.C., where a governing body has passed a rule or law to allow high school athletes to participate in NIL activities. High school athletic associations in North Carolina and Virginia approved NIL policies on the same day, continuing a gradual trend of permissive bylaws that will apply to athletes in talent-rich states in the Southeast or Eastern Seaboard.

However, the North Carolina General Assembly could soon transfer more of the NCHSAA’s authority to the State Board of Education, which would include adopting rules regarding NIL rights. The same day the NCHSAA board of directors approved the proposal, the North Carolina Senate passed Republican-sponsored Senate Bill 636 along party lines with a 30-20 vote. The bill passed its first reading in the House of Representatives.

If signed into law, the bill – which has a short title of “School Athletic Transparency” – would amend existing legislation to grant the State Board of Education additional authority to adopt rules over high school athletics involving public schools.

“At a minimum,” the rules shall include “student amateur status requirements, including rules related to use of a student’s name, image and likeness,” according to the latest version of the bill.

NCHSAA commissioner: NIL policy ‘added fuel’

In the Senate, 30 of the 50 senators are members of the Republican party. Twenty of them sponsored the bill. If Gov. Roy Cooper, who’s a member of the Democratic Party, vetoes Senate Bill 636, the Republican supermajority in the Senate could allow the group to override a potential veto by reaching the required 60% vote.

When the bill was filed on April 5, it didn’t feature any specific clauses related to NIL rights. However, it was amended on May 3, which was the same day it passed the Senate. The amendments included the aforementioned NIL clause.

“They just amended 636 to add some language about that,” NCHSAA commissioner Que Tucker said Monday in a phone interview, recalling a conversation with another reporter about whether the NCHSAA’s NIL policy prompted the bill’s authors to want to do more. “I said, ‘All the other guts of 636 were already there.’ But I think what our board giving some guidance and passing a policy did was just – in their minds – it added fuel and they believe it verified their belief that we don’t have the authority to do what we have done for over 100 years.”

Each of the bill’s primary sponsors – Senators Vickie Sawyer, Todd Johnson and Tom McInnis – haven’t responded to multiple voicemails and an email requesting comment from On3.

Senate Bill 636 follows House Bill 91

When Tucker discussed the legislation currently making its way through the General Assembly, she mentioned a related bill – House Bill 91, which Cooper signed into law in November 2021.

“When House Bill 91 was first introduced in July of 2021, it was to totally dismantle us,” Tucker said.

Tucker said NCHSAA representatives communicated with members of the General Assembly and “we were able to get the bill to a point that, well, we thought, ‘OK. We can handle this.'”

The law says the State Board of Education may enter into a memorandum of understanding for a four-year term with one or more nonprofit organizations to “administer and enforce” the high school athletics rules adopted by the State Board. The State Board could also delegate authority to an organization to establish certain rules.

Tucker said she signed the MOU with the State Board of Education on March 14, 2022, and it went into effect last July. She noted that the NCHSAA wasn’t under the “MOU umbrella” for even 12 months when lawmakers started working to amend the legislation again.

SB636 says the State Board of Education’s adoption of rules pertaining to student participation and other specific areas “shall not be delegated to an administering organization.”

SB636 is because ‘we didn’t get everything that we wanted’

The initial version of Senate Bill 636 included clauses that member schools shall be classified into one of four athletic divisions, including that charter or nonpublic schools shall be classified into the “next largest conference” based on their average daily membership.

The originally filed version of the bill also said that athletic activities designated for female athletes shall not be open to “students of the male sex,” which the bill defines based on “a person’s reproductive biology and genetics at birth.”

During the legislative process, legislators removed the clause about classifying schools into one of four athletic divisions. Also, the version of the bill that the Senate passed states the State Board of Education must adopt student participation rules, which include “biological participation requirements.” However, it no longer defines the requirements any further compared to the originally filed version.

Greensboro.com reported that primary sponsor Sen. Sawyer said she “agreed to remove the transgender athlete language from SB636 because SB631 would cover those eligibility restrictions.”

SB636 also includes a punishment of one postseason of ineligibility for a student who doesn’t live in a local school administrative unit but whose enrollment at a school is solely for athletic purposes.

Tucker said that when she and other members of the NCHSAA’s board of directors recently attended an education committee meeting, one legislator asked a member of the committee, ‘Why? Why are you all doing this?'”

Tucker paraphrased a committee member’s response. “Because we didn’t get everything that we wanted in House Bill 91 and in the memorandum of understanding so this is a way to fix that,” Tucker relayed.

Senate Bill 636 says the Superintendent of Public Instruction may enter into an MOU for a four-year term with a nonprofit organization to adopt administrative, gameplay and penalty rules. The Superintendent of Public Instruction’s office hasn’t responded to a voicemail requesting comment.

NCHSAA similar to NCAA: ‘We work for the membership’

On3 asked Tucker if she knows specifically what the state lawmakers want from the bill. Is it power and control? Is it about reshaping high school athletics as a whole? Is this bill even about NIL rights?

“I really don’t,” Tucker said. “I really don’t know. I know that there have been concerns that because we are a 501(c)(3) not-for-profit organization, there have been concerns that we shouldn’t be governing public schools but you know, our bosses are superintendents. And when I say ‘our,’ the staff’s bosses are superintendents, principals and athletic directors. We work for the membership. We can’t do anything as a staff without the say-so of the membership. I think there is this idea that perhaps our staff is the one wielding the power. Well, that’s far from the truth.

“I don’t know exactly what they want and I guess if I did, maybe I could understand it better. But I really don’t know what they want, other than they don’t want this organization to have control and to be able to govern high school athletics as we have done all these many years. That’s the only thing I know and that it is about that control resting with the powers that be in Raleigh.”

It’s a membership association of a smaller scale than the NCAA but Tucker described a similar dynamic regarding the potential perception of an all-powerful central office that in reality is governed by its members.

NCHSAA’s NIL policy ‘was to try to give some guidance’

There are several other parallels between the prospect of high school athletes in North Carolina signing marketing agreements and the NIL landscape within college athletics. The NCAA’s interim NIL policy removed its previous prohibitions on college athletes receiving compensation for marketing agreements and public appearances. The policy didn’t create new rights for athletes. It merely allowed them.

“It’s important to keep this in mind. The opportunity for students right now to use their name, their image and likeness even before our policy kicks in, that’s in place,” Tucker said. “We’ve got some students in North Carolina right now who have brokered some NIL opportunities but they reached out to us to say, ‘What can we do? What can’t we do?’ and we tried to advise, ‘Well you can’t represent your school. You can’t wear your player uniform. You can’t be standing out in the middle of your gym or the baseball field and say, “Here I am, a student-athlete at New Bern High School and blah, blah, blah, blah, blah.”‘

“Well, you can’t do that. So students right now have that right. All we did was to try to give some guidance and put some boundaries in place so that students, if they use their name, their image and likeness, don’t do so in a way that could cause them to be ineligible to continue playing high school athletics.”

Similar to college athletics, there are some fans of high school athletics who believe permitting NIL deals will ruin the enterprise.

“One of the frustrations I’ve had is that people just don’t understand what the board passed and what we are trying to do,” Tucker said. “I had a dad call me. He said, ‘I think that’s the worst decision you all ever made. I mean y’all are just ruining high school athletics.’ I was thinking, ‘Well, sir. If we don’t put these in place, it really is going to be ruined because you’ve got some kids that will go out here and do some crazy stuff.'”

Tucker said it wasn’t a surprise that California and New York were the first two states where high school athletic associations allowed athletes to pursue NIL opportunities while retaining their athletic eligibility. New York City and Los Angeles are the two largest markets in the country.

“Their state associations knew they had to do something right away,” Tucker said. “We took time and we wanted to kind of pay attention to what else was happening.”

If Senate Bill 636 is signed into law, the NCHSAA will no longer have the same authority to govern high school athletics, which includes the adoption of NIL rules. Instead, the State Board of Education would be responsible for the oversight.

“Some of our kids are going to play at the next level,” Tucker said, “and at the next level, the NIL deals are abounding and all of the things that are happening at that level, it would be nice if we could give them some guidance and some structure before they leave high school and then they kind of sort of know what to expect.”