The 2023 college football season ended in early January, and sports fans are eagerly anticipating the start of college basketball’s March Madness. Many are also anxious about the future of college sports, given the non-stop news of conference realignment, transfer portal windows, and playoff expansions. Fans – along with student-athletes, sponsors, and institutions – are also wondering how Name, Image, and Likeness (NIL) deals will factor into the future of college athletics.

Those NIL deals have, so far, been regulated primarily at the state level. The National Collegiate Athletics Association (NCAA) has offered guidance on NIL deals to member institutions, but it does not have the power to create laws or federal regulations. Those attempts at guidance have caused confusion given quick advancements in NIL practices and given interactions between the NCAA’s guidance and state NIL laws. So, there are now a number of competing federal-level proposals that seek to create regulations for NIL deals that would apply uniformly across the country. All of these are bills in Congress, meaning none have been passed into federal law yet. Still, institutions and businesses that have entered (or are interested in entering) into NIL endorsement deals with collegiate athletes should familiarize themselves with these federal legislative trends so they will be prepared to adapt if, like so many other things in collegiate athletics, the regulatory landscape for NIL deals undergoes drastic changes.

There are currently seven pieces of proposed legislation addressing NIL deals in Congress. These include:

1. The College Athlete Economic Freedom Act (Economic Freedom Act);
2. The College Athletes Compensation and Protection Act (Compensation Protection Act);
3. The Fairness, Accountability, and Integrity in Representation of College Sports Act (FAIR Act);
4. The College Sports NIL Clearinghouse Act of 2023 (Clearinghouse Act);
5. The Protecting Athletes, Schools, and Sports Act (PASS Act);
6. The Student-Athlete Level Playing Field (Level Playing Field Act); and
7. Ted Cruz’s NIL Legislation (Cruz’s Act).

The Bills

Each of these seven bills seeks to regulate NIL deals and the role those deals play in college athletics. But they each pursue slightly different means for achieving that end. Primary takeaways from each proposal include:

1. The Economic Freedom Act

• Would prevent institutions from prohibiting student-athletes from entering NIL deals;
• Would bar institutions from colluding to cap the compensation student-athletes can earn from NIL deals;
• Would prohibit institutions from barring student-athletes from forming unions or collective bargaining representatives;
• Would not allow a student-athlete’s NIL compensation to adversely affect amount, duration, or renewal of the student-athlete’s grant-in-aid;
• Would empower the Fair Trade Commission to treat certain violations of the Economic Freedom Act as unfair or deceptive acts and bring enforcement actions against violators; and
• Would require institutions and athletic associations to obtain licenses before using a student-athlete’s name, image, or likeness for any type of promotion.

2. The Compensation Protection Act

• Would create the College Athletics Corporation, which would serve as a clearinghouse for NIL deals, creator and enforcer of NIL policies, and licensing body for NIL agents;
• Would preempt most state NIL laws;
• Would prohibit institutions from offering “pay-to-play” NIL deals as recruitment incentives;
• Would require institutions to cover certain student-athlete medical expenses;
• Would prohibit institutions from representing student-athletes and prohibit attempts to influence a student-athlete’s choice of representation in NIL deals;
• Would require institutions to offer financial literacy and life skills development courses for student-athletes; and
• Would require student-athletes to disclose their NIL deals.

3. The FAIR Act

• Would empower the Federal Trade Commission to enforce NIL regulations and create the U.S. Intercollegiate Athletics Commission which would craft NIL regulations;
• Would require registration for NIL collectives;
• Would create a website to report alleged NIL violations; and
• Would prohibit NIL collectives from entering into NIL deals with student-athletes until the student-athlete has been enrolled at that institution for 90 days.

4. The Clearinghouse Act 

• Would create a regulatory body called the NIL Clearinghouse;
• Would prohibit institutions from interfering with a student-athlete’s NIL deals or use compensation from NIL deals against that student-athlete’s financial aid;
• Would allow institutions to prohibit student-athletes from entering NIL deals with businesses in certain industries;
• Would require institutions to notify student-athletes which entities they are prohibited from entering NIL deals with; and
• Would give the NIL Clearinghouse the power to investigate violations of the Clearinghouse Act, and to establish penalties for violations.

5. The PASS Act

• Would regulate contents of NIL deals and require them to commence only after a student-athlete enrolls at an institution;
• Would prohibit using NIL deals as “pay-to-pay” recruiting incentives;
• Would change transfer portal rules and make certain student-athletes ineligible based on their transfer timing;
• Would prohibit retaliation against student-athletes who enter into NIL deals; and
• Would require student-athletes to disclose the material terms of any NIL deal to their institution within 30 days.

6. The Level Playing Field Act

• Would create both a Federal Trade Commission Clearinghouse and the Covered Athletic Organization Commission that would be responsible for regulating NIL deals;
• Would preempt all state NIL laws;
• Would ban institutions from utilizing NIL deals as “pay-to-play” recruiting incentives;
• Would ensure that student-athletes are not considered employees of their institution;
• Would require disclosing NIL deals worth more than $500 to the Federal Trade Commission’s Clearinghouse within 72 hours; and
• Would require that student-athletes be enrolled at their institution prior to entering into an NIL deal.

7. Cruz’s Act 

• Would create a public, searchable database to ascertain a student-athlete’s NIL value;
• Would preempt state NIL laws;
• Would ensure that student-athletes are not considered employees of their institution; and
• Would empower the NCAA to create and enforce rules governing student-athlete recruitment and transfer, with punishments ranging from loss of a student-athlete’s eligibility to removal of member institutions.

The Trends

Regulatory Bodies

Each of the seven proposals has unique aspects that institutions and businesses interested in entering into NIL endorsement deals should understand in case of passage. Yet there are a number of similarities between the proposals as well.

For instance, the Compensation Protection Act, the FAIR Act, the Clearinghouse Act, and the Level Playing Field Act would all create a regulatory agency with some investigative and enforcement powers over institutions. The Economic Freedom Act would not create a new regulatory agency but would empower the Federal Trade Commission to investigate and bring actions in certain cases. More than half of these federal NIL proposals seek to create (or expand the powers of) a federal regulatory body that would have the power to focus on NIL deals.  

Preempting State NIL Laws

As mentioned above, NIL deals are governed primarily by state law today. It is unclear if future federal legislation would complement those state laws or displace state regulation and create a uniform set of rules across the nation. Some of the proposed federal NIL laws answer this question with preemption clauses. The Compensation Protection Act and the Level Playing Field Act both have language that would expressly preempt state NIL laws. If those bills become law, the protocols used to ensure compliance with existing state NIL requirements would need to be reconsidered, as a new federal law that preempts those state requirements would create a brand-new regulatory scheme.  

Employment Status

An outstanding question for the future of collegiate athletics is the employment status of student-athletes. Most of the proposed federal NIL laws would not bring clarity on this issue. That said, two of the proposals – the Level Playing Field Act and Cruz’s Act – would clarify that student-athletes are not employees of their institution. Yet the Economic Freedom Act would prohibit institutions from interfering with student-athlete efforts to form unions or engage in collective bargaining. This means institutions should be prepared to adapt to a range of possibilities as federal NIL bills continue to develop.    

Reporting NIL Deals

A review of the federal NIL proposals shows that lawmakers see the creation of an NIL reporting system as a priority. Six of the proposals – the Compensation Protection Act, FAIR Act, PASS Act, the Clearinghouse Act, the Level Playing Field Act, and Cruz’s Act – would require student-athletes or institutions to report NIL deals and compensation. And some proposals, including the FAIR Act and Cruz’s Act, would create databases for NIL deals or student-athlete NIL value. So, institutions may need to prepare robust disclosure protocols if federal legislation passes.

Restrictions on Institutional Control of Student-Athletes

Reviewing the federal proposals also shows that future NIL legislation may do more than simply protect student-athletes’ rights to enter NIL deals. It may also impact the rules institutions can enforce against student-athletes. For instance, the Economic Freedom Act, Compensation Protection Act, FAIR Act, PASS Act, and the Level Playing Field Act prohibit institutions from interfering in a student-athlete’s NIL deals or retaliating against student-athletes who enter NIL deals. But future legislation could also restrict an institution’s use of its student-athletes’ likeness. For example, the Economic Freedom Act would obligate institutions to receive permission from student-athletes before using their likeness in marketing materials. Institutions must therefore be ready to balance their control of student-athletes with NIL protections as federal legislative efforts proceed.

The Takeaways

College athletics is in a period of rapid change. Long-held traditions, like student-athlete amateurism, are mixing with new developments, like student-athlete NIL deals. Given the visibility student-athletes can attain through television, social media, and fanbase interaction, coupled with anticipated growth in media exposure that will be brought on by conference realignment and record media deals, NIL endorsement deals will likely continue to be attractive investments. They seem poised to remain an important factor in the changing landscape of collegiate sports. Given that staying power, it is not surprising that there are now multiple proposals for federal legislation that would regulate NIL deals. Collegiate institutions and entities looking to enter NIL deals with student-athletes should monitor the current federal proposals. Those who stay up to date on the competing proposals will be able to adapt quickly to any future legislation that might pass.