In what’s become an annual ritual, members of Congress are proposing new legislation that would alter the NIL marketplace, adjust how antitrust law governs the NCAA and grant or prohibit employment status to college athletes.
As before, the odds that Congress passes anything are slim—especially as state laws, labor law litigation, NLRB action and basic economics reconstitute the relationship between college athletes and their schools.
Conversations with members of the House and Senate and their staff in recent weeks indicate several bills will be introduced soon. The bills vary widely, with some seen as NCAA-friendly and others NCAA-hostile.
Under the leadership of new president Charlie Baker, the NCAA, as well as conferences and some schools, have aggressively lobbied Republicans and Democrats on Capitol Hill. Their wish list includes a declaration that college athletes cannot be classified as employees, a prohibition on revenue sharing with athletes, immunity for amateurism rules from antitrust scrutiny, preemption of state NIL laws, a legal obligation that NIL deals be disclosed to schools, a requirement that athletes use a standard NIL contract and assorted restrictions on collectives and agents.
As media have reported, one bill is linked to Congressman Gus Bilirakis (R-Fla.), who in January penned an op-ed for Sportico on his vision for NIL. The bill would contain preemption language sought by the NCAA and language prohibiting pay-for-play by collectives (something the NCAA already prohibits). Other bills are expected to include language empowering the Federal Trade Commission to oversee NIL and language opposing or supporting the recognition of college athletes as employees.
These bills face several hurdles that might prove insurmountable.
For starters, nothing is stopping the NCAA and its members from adopting new rules and enforcement mechanisms to regulate NIL, employment, collectives, agents and related topics.
Stated differently, Congress isn’t needed to accomplish what the NCAA wants.
The NCAA is a private and voluntary membership organization that, like other organizations of its kind, can craft rules for members. If the NCAA and its members can’t agree on new rules, members of Congress will question why it would be appropriate for Congress to offer those same rules as proposed federal law.
The NCAA and its members are worried about antitrust scrutiny of rules that limit economic opportunities for college athletes. But what the NCAA regards as a worry, others regard as a relief. Antitrust law is designed to ensure that competing businesses, including colleges, compete. But some restrictions on competition might prove reasonable before a court.
The NCAA lost O’Bannon and Alston because their rules were openly rigid and absolute: Those rules set at $0 the value of a college player’s NIL in video games and forbid schools from reimbursing athletes for education-related expenses even when schools wished to do so.
More flexible NCAA restrictions would likely satisfy antitrust scrutiny; most antitrust lawsuits fail because courts are usually deferential to restrictions so long as they are not blanket prohibitions. If the NCAA is unwilling to defend new restrictions from antitrust scrutiny, it invites questions about the lawfulness of those restrictions.
Congress can also question why it would grant antitrust immunity to an entity that judges from across the ideological spectrum have found in violation of antitrust law. To exempt a company or industry from an area of law designed to promote economic competition, which in turn tends to benefit consumers and labor, ordinarily requires a compelling justification.
The NCAA can credibly argue it is different from other businesses in that its members have, in some ways, atypical goals and obligations. For instance, colleges subsidize rather than scrap money-losing Olympic sports in part because they play important cultural and educational roles on campus. Colleges also must adhere to gender equity requirements set forth by Title IX.
Those features have not convinced judges the NCAA is owed preferential treatment under antitrust law. Those judges have pointed out the college sports has become a massive industry where some coaches have become multimillionaires through the labor of unpaid athletes. During the oral argument for Alston, Justice Clarence Thomas wondered, “Is there a similar focus” about coaches’ salaries “that have ballooned?” while Justice Samuel Alito opined college athletes often appear to be “used up and cast aside.”
The NCAA has also attempted to regulate NIL, which suggests it could adopt other rules. A new bylaw permits the NCAA to use circumstantial evidence when ruling on impermissible conduct with NIL. So far, the bylaw has not been challenged. Perhaps, like most bylaws, it will simply be followed.
Some of the legislative concepts invite questions about their real-world effectiveness. The FTC has been offered as a federal agency that could oversee agents who work in NIL. But remember, this is the same federal agency entrusted by the Sports Agent Responsibility and Trust Act of 2004 to enforce rules against sports agents. As a Sportico investigation revealed, the agency has not enforced the law and one former deputy admitted he had “never heard” of it.
The NCAA’s focus on Congress might be misplaced for another reason: Others who control law are moving forward on potentially seismic changes to intercollegiate athletics. The U.S. Court of Appeals for the Third Circuit is weighing whether college athletes are employees under the Fair Labor Standards Act. The NLRB is weighing that same question under the National Labor Relations Act. States—the laboratories of democracy—are passing their own college sports laws that reflect their values and priorities. All of this is happening as numerous companies and entrepreneurs are working with athletes, schools and alumni on building an economic marketplace.
The NCAA is no longer in control of college athlete compensation. It will soon discover Congress isn’t in control, either.
