The NCAA embraces NIL, or, the NCAA embraces NIL?

 

Yeah, that went over well.  Can’t imagine why ($$).

… this is what Emmert said Wednesday: “It’s a natural extension, in my opinion, of the steps that the NCAA member schools have taken over the past years to constantly improve the college athlete experience as an integral part of higher education.”

He left out the part where every single one of those steps was forced by a federal court ruling or a public shaming or a state legislature. Every time the NCAA relents a little on its own hypocrisy, it is presented to us as a gift that the schools have decided to bestow upon the athletes instead of something the schools should have been allowing all along.

Part of the reason for that is the NCAA has placed so many conditions on its acquiescence that it’s hard to grasp what the final version of college athletes’ NIL rights will look like from here.

The report also recommends “areas of regulation for newly permitted NIL activities.” These recommendations will surely grab the attention of antitrust and intellectual property litigators since they involve competing businesses (the colleges and conferences that comprise the NCAA) agreeing to restrain the autonomy of athletes. The recommendations include the following five:

1) Prohibiting endorsements that are inconsistent with NCAA membership values. Listed examples include no endorsements for alcohol, tobacco and sports gambling.

Legal analysis: the phrase “membership values” is vague and could potentially be construed to block a wide-range of possible endorsement deals. To that point, a private, religiously-affiliated college might espouse different “values” than a public university. Further, schools might disagree about politically-divisive topics such as endorsements for firearm or marijuana products. Any restrictions that schools conspire to agree on could lead to antitrust challenge.

2) Evaluating whether certain businesses, including sneaker companies, should be excluded from authorized companies that can do business with athletes. Companies that have been involved in recruiting infractions might be barred from doing business.

Legal analysis: Removing businesses restrains potential among businesses, and potential compensation, for college athletes. Both athletes and the excluded companies could consider antitrust litigation.

3) Adopting measures to ensure that endorsement deals are not masquerading pay for play.

Legal analysis: The world of compliance officers in athletic departments is about to become much harder (and don’t be surprised if schools ramp up hiring of compliance officers, including recent law school graduates). Consider this example. Say a local car dealership owned by a wealthy booster offers to pay a star freshman basketball player $1 million to do a TV commercial, with the understanding (though not in writing) that the player will stay for his sophomore season instead of declaring for the NBA draft. How would that transaction be judged and whom would judge it? On the surface, it’s an endorsement deal. But if its value is 30 times what the dealership normally offers in endorsement deals, there would be reason to think there is more than meets the eye. The working group notes there has been discussion regarding a “regulatory system in which payments from third parties to student-athletes” are compared to a “fair market value standard.” The group also acknowledges there would be “difficulty in creating and maintaining such a system.” Any attempt by the NCAA or a group of its members to determine “fair market value” would be vulnerable to claims of illegal price fixing under federal antitrust law.

4) No compensation for appearances in live broadcasts, rebroadcasts, news accounts or many informational items or pictures. The NCAA regards such compensation as pay for play, since the payment would be for participating in the game itself.

Legal analysis: This is a tricky area for the NCAA and involves a much-debated area of law, particularly given technology changes in broadcasting and streaming and their interplay with intellectual property law. The working group expresses fairly strident views on the right of publicity (as mentioned above, there is no singular right of publicity, it varies by state). The topic is not straightforward. Specific regulations could invite legal challenge.

5) No group licenses (for now). The recommendation is that group licenses be addressed next year or thereafter.

Legal analysis: It appears the NCAA will not allow college athletes to use a trade association as vehicle for negotiating with a video game publisher. For fans of college sports video games, that is disappointing news. However, the related subject matter is hardly straightforward. It’s possible that a video game publisher could explore signing individual college players, presumably stars, to appear in video games. Whether the NCAA would agree, separately, to license its own intellectual property in such a game is uncertain. The report makes clear that endorsement deals involving players can’t use uniforms, trademarks or other intellectual property of schools.

Part of the reason for that is Mark Emmert and his cohorts are clearly jonesing for some sort of federal preemption.

The NCAA has lobbied for a federal law that would effectively preempt these [state] laws. In pursuing a federal bill, the NCAA seeks an antitrust exemption that would extinguish the risk posed by some of the potential lawsuits hypothesized above.

And… a pony.  How schools expect to obtain an antitrust exemption for college sports without allowing college athletes to unionize is something I don’t understand, but I rather strongly doubt Congress would be in the mood to grant the former in the absence of the latter.  Is federal preemption a condition for college athletes’ NIL rights?  I’m sure the NCAA thinks it is.  I’m also sure the legislative bodies that are moving ahead right now don’t really care what the NCAA thinks.

There’s one other reason to discount Emmert’s generosity.  School administrators are gonna school administrate ($$).

And what of fair-market value? Ohio State athletic director Gene Smith, who co-chaired the NIL working group, offered a scenario: “If I do a deal with Panera Bread and I do two likes (on social media) and they pay me $50,000, I’m not sure that’s in the realm I’m talking about.’’ Yet Vox reported influencers with 1 million followers can make more than $100,000 and up to $250,000 per post. Tua Tagovailoa has 333,000 Twitter followers and 695,000 on Instagram. Is $50,000 so outlandish?

Seriously, you ask that?  In a world of “they’re just gonna spend it on tats and weed”?  It’s more outlandish than Charlie Weis’ last head coaching contract.

Don’t get me wrong.  That Emmert actually got up yesterday and forced himself to say the words he said is not insignificant.  The courts and politicians have forced the NCAA into a place it has long fought against going.  There’s still a long, long way to travel before this sees any resolution, though.  That’s just the NCAA’s nature.

9 Comments

Filed under It's Just Bidness, The NCAA

9 responses to “The NCAA embraces NIL, or, the NCAA embraces NIL?

  1. MGW

    “Say a local car dealership owned by a wealthy booster offers to pay a star freshman basketball player $1 million to do a TV commercial, with the understanding (though not in writing) that the player will stay for his sophomore season instead of declaring for the NBA draft.”

    How is that bad for the NCAA or the school? Or the kid? Or Espn? Or… anyone else?

    I’ve always thought that aspect of unfettered NIL rights would be one of the best side effects; i.e. someone stepping up to pay borderline early draft kids to stick around instead of risk, say, going in the fifth round to the Browns.

    I wouldn’t want Bama and Georgia boosters picking off good QB’s from mid major programs every off-season, but I’m all for more four year kids.

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    • Dylan Dreyer's Booty

      I think it wouldn’t even take $1 million to get some kids to stay. If Fromm could have legally gotten a little State Farm money he would have been a lot better off staying another year. Matching late round draft money doesn’t require $1 million.

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  2. Can’t the schools specifically say in the LOI/scholarship offer that the student-athlete will not be compensated by the NCAA, the conference or the university for NLI for appearing or having his name called on a broadcast or in pictures associated with the university? That’s a condition of receiving the scholarship.

    All of the other stuff is once again the NCAA sticking its nose somewhere it doesn’t belong. If a local car dealer is dumb enough to give a deal to a one-and-done for $1m with the “wink, wink” understanding the player will stay 2 years, that can’t be enforced if the player leaves after 1. Allow the school’s compliance people to review contracts before they are signed to look for potential violations of NCAA rules (you don’t need an army of attorneys just a well-trained AI engine to look for items of interest – I’m sure IBM Watson could be easily taught this). If a kid signs a deal with Nike but the school is with Under Armour, the kid can’t play in the Nike shoes or have a jersey made with a Nike swoosh.

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    • Have you seen the HBO’s “The Scheme”? The sponsors have already bought the schools. If the kid makes a deal with Nike, the kid will play at a Nike sponsored school. A lot of people think allowing NLI compensation for athletes will (could) lead to an ersatz free agency where the top talent goes to the highest bidder, already happening under the table in NCAA basketball apparently.
      Sponsors could certainly offer verbals to keep players from leaving early. If I’m successful enough to offer a large sum of money to an 18 year old, I’m probably savvy enough to do it in a way that Sprout can’t run off with it before I’ve gotten my mileage from it.
      Check out “The Scheme”. It’s worth a look.

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  3. Malcolm X

    I love football, but I’m not a nut. The quote that irritates the holy crap out of me…” improve the college athlete experience as an integral part of higher education.” Jesus Christ! These guys are taking on line bullshit classes while working many hours at football. There is no “higher education “ occurring. Piss in my face, but don’t call it rain.

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  4. Faltering Memory

    Senator has said it many times, Emmert is doing what his employers want, but surely they could find someone better. How could they do any worse?

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  5. I think the article does raise a lot of good points about the complexity of enforcement. I think large institutions like the NCAA (“N-C-double Assholes” as the line from “The Program” goes) are inherently lazy. The fact is, compliance in the world of NIL rights would become much more difficult and require a lot of money, in and of itself. It would be a nightmare. The booster-car dealership is a simple example, but there are so, so many others one can think of. But that’s not a good enough reason not to do the right thing.

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  6. BuffaloSpringfield

    Malcolm X “It’s don’t piss done my back and tell me it’s raining, Senator”.
    The Outlaw Josie Wales, Clint Eastwood

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  7. BuffaloSpringfield

    “Down”… not done, perhaps Emmert is.

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