Arkansas committee votes to expand NIL to college-bound athletes

University of Arkansas Athletic Director Hunter Yurachek appeared before the House Insurance and Commerce Committee on Wednesday to speak in favor of a bill about student athletes’ publicity rights.

“This is a very important bill for us,” Yurachek said. “It keeps us in the forefront. It keeps us competitive not only in the Southeastern Conference but nationally.”

House Bill 1649 by House Speaker Matthew Shepherd, R-El Dorado, “cleans up language” in a law that took effect on Jan. 1, 2022.

Shepherd’s bill would allow high school athletes who have been admitted to or signed a letter of intent to attend an Arkansas college “to enter into a contract and receive compensation for the commercial use of the student-athlete’s publicity rights” immediately.

Publicity rights is another term for NIL — name, image, likeness — that allows a student athlete to receive compensation for the use of their name, image or likeness.

The bill fails to address Arkansas high school athletes who sign national letters of intent with out-of-state universities if an in-state school never made an offer to them. 

Another bill, House Bill 1679, also filed by Shepherd and Rep. RJ Hawk, R-Benton, proposes a task force on the NIL issue that may address in-state students that choose out-of-state universities.

Changes are needed, Shepherd said, because of the ever-changing landscape of NIL to keep Arkansas universities competitive in both recruiting and keeping athletes.

“In a perfect world, I wouldn’t be handling this,” Shepherd said. “But Congress failed to act.”

Coincidentally, a subcommittee of the U.S. House Committee on Energy and Commerce held a hearing Wednesday on Capitol Hill to address the NIL situation.

It was the eighth NIL hearing by Congress to attempt to pass a federal NIL law that would preempt laws like the one in Arkansas and create uniformity across states for student athletes to earn money from endorsement deals. Many student-athletes have hundreds of thousands, if not millions, of followers on their social media platforms.

The NCAA’s new president, Charlie Baker, claims the NIL landscape is unregulated. The NCAA wants antitrust exemption from Congress that would supersede state NIL laws.

Until a federal law is passed, states are on their own, and each state has various rules and laws around NIL.

In Arkansas, Shepherd said his bill would identify and enable more opportunities for foundations and collectives to help facilitate NIL deals for student athletes who sign with Arkansas universities.

Collectives are becoming more controversial as more NIL deals are cut with athletes.

Shepherd, however, said student-athletes need guidance when making NIL deals, such as tax consequences and exclusivity clauses that an incoming college freshman may not know about. These changes would allow that to happen.

Over the last two years, Arkansas universities have created collectives that pool money from numerous donors and businesses to create relationships for student-athletes.

These new collectives, like the University of Arkansas’ ONEArkansas NIL, which Yurachek mentioned at Wednesday’s meeting, help assist Razorback student athletes to “connect, educate, and facilitate their charitable efforts while serving fellow Arkansans and others.”

One other collective — Athlete Advocate Consortium founded by J.B. Hunt trucking heirs — is also connected to University of Arkansas student-athletes.

An Arkansas State University collective, IMPACKT Club, has also been started to help A-State students with NIL deals.

Matt McCoy, senior associate general counsel for the University of Arkansas, testified that the bill was important to keep current players and even those who commit to an Arkansas university from being recruited away from Arkansas.

Rep. Jay Richardson, D-Fort Smith, asked if the University of Arkansas had players recruited by other states.

“I can tell you circumstantially we have reason to believe these things have occurred,” McCoy said.

Shepherd said this bill helps to level the playing field for Arkansas universities “even when it comes to recruitment of our student athletes even from the state of Arkansas.”

“What has happened is that you may have an athlete in Arkansas that commits, they can even sign with that institution but primarily after the commitment in particular but before they sign, you can have other schools or entities from out of state come in and say, ‘Hey, if you’ll move your commitment and if you will end up signing with our programs we can go ahead and help facilitate name, image, likeness deals,” Shepherd said.

Shane Broadway, vice president for university relations at Arkansas State University, also addressed the committee. Arkansas State is in the expanding Sun Belt Conference.

He said after the hearing that NIL legislation is going to be “an ever-changing environment every two years” until a federal NIL law exists.

“We would prefer there to be one standard across the country,” Broadway said. “In that absence, we have to be able to stay competitive with our conference foes and work with our colleagues across the state.”

Student-athlete advocates, though, say that universities are not focused on what is most important – the student. Foundation, collectives and universities may not always have the best interests of the student-athlete at heart when it comes to NIL deals. 

“We should be focused on our kids first not our schools or our non-profits or institutions, when it comes to NIL,” Byron Jenkins of Arkansas Athlete Connection, a website that serves as a booking agent for Arkansas athletes. “We should be using this opportunities to teach them entrepreneurial skills, financial literacy and branding. It should be first about the student-athlete.”

The committee voted unanimously in favor of HB 1649, which next heads to the full House for approval.