Why new Virginia NIL law is harbinger of things to come for NCAA

If you’re looking for significant progress on college sports reform these days, look to state legislatures rather than the NCAA.

As NCAA President Charlie Baker’s forward-thinking Project D-I proposal remains stuck in neutral because of a litany of ongoing lawsuits making their way through the courts, several states are passing permissive legislation that is moving the industry closer to a day when schools can directly pay players.

“The NCAA has lost the fight on athlete compensation,” said Mit Winter, a college sports attorney with Kennyhertz Perry. 

On Thursday, Virginia Gov. Glenn Youngkin signed House Bill 1505, a piece of legislation that could well be a harbinger of what’s to come nationwide.

The bill will allow in-state schools to directly compensate athletes for promoting their schools and games, effective July 1. Additionally, Virginia is now the first state to make it illegal for the NCAA to punish schools for paying athletes for their NIL rights. 

It provides notable recruiting advantages for in-state schools, at least until other states pass similar legislation or the NCAA formally brings NIL in-house. Many stakeholders have long been preparing for a world in which schools can directly pay athletes.

“Not only does this position us more competitively among other states during this critical time,” Virginia Tech Athletic Director Whit Babcock said. “But it also allows for more school involvement as we continue to enhance our recruiting and retention efforts to bring the most talented student-athletes to Virginia Tech.”

NCCA watches other states rewrite NIL laws

Meantime, Mississippi Gov. Tate Reeves signed an NIL bill that will allow third parties to pay athletes for promoting their school and games, effective immediately. The difference with the Virginia bill is that, in Mississippi, in-state schools will need to pay third parties, which will then compensate athletes.

Nebraska Gov. Jim Pillen also approved legislation, effective immediately, that – much like the Mississippi bill – will allow schools to pay third parties, which will then pay athletes for promoting their schools and games.

The progressive move by several states calls to mind the advent of the NIL Era. Changes to state laws was the catalyst that ultimately led to the NCAA allowing athletes to monetize their brands beginning July 1, 2021.

NCAA slows down on NIL reform plans

The ability for schools to strike NIL deals with athletes is, of course, a key element in Baker’s reform proposal, which was unveiled in December. 

But key NCAA stakeholders have pumped the brakes on the proposal, sources tell On3, as the landmark House antitrust case moves toward either a settlement or an early 2025 trial.

Plaintiffs’ lawyers in the House case are using Baker’s proposal in court documents to bolster their own arguments, claiming that Baker himself wants to green-light a less restrictive financial model for college athletes.

In the absence of change enacted by the NCAA, states are now moving to the forefront to reshape the landscape.

“The list of states with NIL laws that contradict NCAA rules continues to grow and puts pressure on the NCAA to change its rules,” Winter said. Make no mistake, a less restrictive model is on the horizon – one that will allow schools to directly pay athletes. The only question is whether third parties – the courts and state legislatures – will trigger the change before the NCAA is willing or able to usher in a new world order.