Oklahoma moves closer to significantly reshaping state NIL laws

Oklahoma’s sweeping name, image and likeness bill is one step closer to becoming a law.

On Monday, the Oklahoma House of Representatives overwhelmingly passed Senate Bill 840 by a vote of 84-5. The transformative bill was initially introduced in January by state senators Greg McCortney and Shane Jett. Supporters say the bill levels the playing field for Oklahoma, Oklahoma State, Tulsa and other colleges when recruiting and retaining student-athletes who also want to capitalize off NIL.

SB 840 removes virtually all restrictions on who can represent athletes in NIL deal negotiations and allows universities to support NIL activities from third parties. It also allows schools to set parameters to prevent NIL activities from interfering with school or team activities, allows schools to be compensated for use of logos or facilities, and allows schools to require that student-athletes take financial literacy and contract courses. It also prohibits student-athletes from securing deals using a school logo.

Additionally, it doesn’t require student-athlete compensation to be in line with market value and does not count scholarships as compensation.

“Why am I passing this bill?” Rep. Jon Echols, a Republican from Oklahoma City, said when arguing the bill. “Because if we don’t, we need to go ahead and shut down OU and OSU athletics. Not passing this is tantamount to saying we no longer wish to compete on the collegiate level. It has gotten to that level. What we are doing is setting the same level playing field that everyone has to play on.”

Echols said most states, including neighboring Arkansas and Texas, now are adopting or seriously considering uniform rules so programs don’t miss out on some of the best recruits in the nation.

“It’s become a little bit more of a junior NFL,” Echols said on the floor.

The bill returns to Senate for final consideration. It appears to be on the fast track to arrive on Gov. Kevin Stitt’s desk.

Oklahoma NIL bill could provide protection from violations

Most interestingly, though, legal experts say SB 840 also appears to provide cover for OU, OSU and TU from being punished by the NCAA for any NIL-related violations, including any committed by collectives that have been set up to support student-athletes through deal facilitation.

According to the bill: “A collegiate athletic association shall not and shall not authorize its member institutions to: Entertain a complaint, open an investigation, or take any other adverse action against a postsecondary institution for engaging in any activity protected in the Student Athlete Name, Image and Likeness Rights Act or for involvement in student-athlete name, image or likeness activities.”

Coaches and NCAA leaders say NIL sometimes disguises “pay-for-play” deals choreographed by collectives ahead of when student-athletes sign binding national letters of intent or before they enter the Transfer Portal. Per NCAA rules, boosters are not allowed to pay players directly or be part of the recruiting process, and the organization says it is actively investigating multiple bad actors in the NIL space.

1Oklahoma and Crimson and Cream are the primary collectives at OU. Pokes with a Purpose is the officially endorsed collective at OSU. Additionally, Hurricane Impact was recently launched at Tulsa.

“If passed it would raise a lot of questions about the NCAA’s ability to enforce regulations in Oklahoma,” John Holden, an associate professor at Oklahoma State that specializes in the rights of student-athletes, told On3. “This would be a significant step in changing the face of college sports if passed and schools choose to act on the protection. It does not appear to directly shield athletes, though.

“While this seems like a bold step to protect school autonomy, you do not have to look too far into the past to see that the NCAA was unpleased when California passed the original legislation giving college athletes NIL rights. I suspect there will be similar concerns here.”

What will the NCAA’s reaction be?

Holden said when California passed its law, some experts suggested that it might run afoul of the Dormant Commerce Clause, a constitutional principle that “prohibits undue burdens on interstate commerce, and there is certainly a possibility that someone might view this bill with similar skepticism.”

Holden is unsure what the reaction will be from the NCAA, especially if other states don’t enact similar laws. Currently, there’s a patchwork of NIL laws in places across the country. Some are more restrictive than others. But there’s been a trend lately over the past year to give student-athletes more flexibility and allow schools and athletic departments to become more engaged in NIL dealings.

“Ultimately, we do not know how the NCAA might respond to this law,” Holden said. “They might say ‘Hey, Oklahoma schools, you are out until this law is off the books,’ I do not think that is the most likely. I think the biggest determining factor for what impact this legislation has will be what other states decide to do.

“If Texas or California come on board and tries to rein in NCAA authority legislatively, it probably adds to some weight to what is being done here. But, without other states hopping on board, the Oklahoma schools might find themselves in a tough spot between Oklahoma law and NCAA regulations.”