Utah is wading into the national debate around how to regulate name, image and likeness deals for college athletes — and legislation being proposed would also shield NIL contracts from state public record laws.
Powerful Utah lawmakers including Utah Senate President Stuart Adams, R-Layton, are backing the bill, looking to place guardrails around the NIL industry while also preserving Utah’s collegiate athlete competitiveness.
“I’m not a fan of (NIL),” Adams told reporters during a media availability Tuesday. “Probably that’s an understatement. I really don’t like it.”
The Senate president said he worries NIL deals are “messing up” college athletes’ focus on athletics and their education, but it’s become a national norm and a reality states are stuck with. More than two dozen other states have so far passed NIL legislation, and now lawmakers say it’s Utah’s turn to tackle the issue.
With HB202, Rep. Jordan Teuscher, R-South Jordan, wants to tame what he called the “wild, wild west” of NIL by drawing lines on what college athletes, athletic programs, universities and others can and can’t do when it comes to NIL deals.
The latest version of the bill would ban higher education institutions from using state funds for purposes related to a student athlete agreement. It would also codify existing NCAA guidelines around NIL in state law, and require student athletes to disclose to universities deals over $600. Universities would then review those deals for violations of university rules, NCAA rules or state law.
The bill would explicitly ban NIL deals that promote:
- Tobacco and e-cigarettes
- Alcohol
- Controlled substances like steroids, antibiotics and marijuana
- Gambling or betting
- Guns that the student athlete couldn’t legally purchase
- “Sexually oriented businesses,” like strip clubs or pornography websites
‘Closed Door’ on NIL deals
Even though Adams said NIL deals can be problematic, Teuscher’s bill would also prevent contracts from being released to the public. The bill would explicitly exempt NIL agreements or any communications and other related material from Utah’s public records law.
Teuscher acknowledged he’s “gone back and forth” on whether contracts should be subject to open records requests, and he wants the Legislature to decide on the matter.
“I don’t think it’s a good idea for us to punt on this question and have the courts try to interpret” the law, he said. “We need to have the debate.”
Teuscher said “there are good arguments on both sides,” but he’s leaning toward restricting the records.
“I guess the bottom line for me is I’m not convinced that there’s really a public need for the public to know how much these athletes make. Like, why does it matter?”
The Utah Media Coalition (of which Utah News Dispatch is a member) opposes that provision of the bill. The Utah Transparency Project, a joint enterprise among Utah media to provide real-time assessments of pending legislation, has given the bill a “Closed Door” rating.
Jeff Hunt, a First Amendment and media lawyer at the firm Parr Brown who is representing the Utah Media Coalition, said NIL contracts should be public records because there’s a compelling public interest for government compliance oversight.
“If government is going to get into the business of reviewing NIL agreements, to make sure that they comply with NCAA eligibility requirements and that they don’t run afoul of all these prohibited transactions in the bill, then there needs to be some oversight of that compliance function,” Hunt said, noting the public currently has “oversight over all regulatory functions in the state of Utah.”
Hunt is also representing Deseret News in a lawsuit seeking access to NIL records. The State Records Committee ruled in favor of the Deseret News, but five universities have appealed the decision in court. The outlet contends “the public has a right to the information to shed light on the role of schools in vetting NIL contracts and making sure they comply with NCAA eligibility requirements.”
Hundreds of millions of dollars are likely floating around the NIL marketplace — to the tune of $750 million to $1 billion, according to On3.com. It’s expected to grow to between $3 billion and $5 billion in the next five years, the Deseret News reported.
“Given the magnitude of the money that is flowing into NIL deals, which makes it ripe for potential abuse, oversight is even more important,” Hunt said.
Hunt said completely exempting NIL records from Utah’s open and public records laws would essentially result in a “black box that the citizens of Utah would have no idea what kind of deals these are, whether they’re complying with the law.
“That’s just not the kind of government we have. We don’t just say, ‘We trust you to do your job,’” Hunt said. “We have the public overseeing the government to make sure they’re doing their job.”
Hunt said the bill would even preclude the release of summary data or demographic data.
“So for example, we won’t be able to tell how much of this money and these deals are flowing to popular programs like men’s football, men’s basketball versus women’s gymnastics, volleyball (or) other programs,” he said.
That information would be relevant for ensuring compliance to Title IX.
“If all the money is just flowing to the men’s program, are the universities giving equal opportunities to the female athletes for these NIL opportunities?” Hunt questioned. “We won’t be able to tell that, because we won’t have any data on these NIL deals. How many there are, how much money is involved, what sports, and what positions.”
Arguments for shielding NIL contracts
Teuscher and Adams argued making NIL contracts subject to public records requests would put Utah at a “competitive disadvantage” with other states that shield those records.
“For me, this isn’t a matter of disclosure, it’s a matter of trying to compete with other states,” Adams said. “Right now, I think if we have to disclose those salaries — even though I would like to and I think it might be good policy — it puts us in a very difficult competitive disadvantage.”
Teuscher said university officials have argued that if the contracts were to be public “it would put our universities at a real disadvantage.” He said they could also “breed some team cohesion issues” and stir resentment in college teams if team members knew how much money one player was making compared to another.
“It wouldn’t be the worst thing in the world if they were public,” he said. “But I think there are some really good arguments to make them private.”
Hunt argued making NIL deals open to the public wouldn’t hurt but help competitiveness for student athletes by allowing more transparency around the value of the contracts.
“If you have information about the value of these NIL deals, that’s going to be to the benefit of the student athlete,” he said, “because if you have all this information public, they’ll be able to have a more competitive marketplace in which to sell their services.”
Tuescher was skeptical about that argument considering other states protect the records. He said it could cause some to be nervous about engaging in Utah, as well as arm universities with information to “undercut” students.
“If you had a level playing field across the whole country maybe that would be true,” he said. “But if it’s just in Utah, now we’re at a disadvantage.”
Fundamentally, Teuscher argued “these are private contracts between a private student and private companies for their own name, image and likeness. And I’m not sure the government should really have a role in dictating what that is.”
To Teuscher’s arguments that these are private contracts between companies and student athletes, Hunt said, “Sure, if two individuals enter into a private contract, it’s normally not a government record. But here, the government, the universities, require them to submit these private contracts for review. So that makes it different.”
If private or personal information needs to be redacted, that would be allowed under Utah’s public records laws.
“As long as the government is enforcing these rules,” Hunt said, “then the public has a stake in it.”
Teuscher said his bill is only meant to set rules similar to what other states have done so Utah has some sort of regulation around NIL. It’s nothing groundbreaking, he said, but if Utah were to allow public release of NIL contracts, then Utah would be straying from what other states have done.
“We would be the only state that has to disclose,” he said.
As Utah wades into the issue, Hunt said he hopes lawmakers will give more consideration to the “government transparency aspect of this.” He said he, too, wants Utah universities to be competitive, but if Utah is going to regulate it, lawmakers should allow public oversight of the government.
“Hopefully the transparency piece was sort of not really thought out,” Hunt said.
This story was reported by The Utah Investigative Journalism Project in partnership with Utah News Dispatch.
