Why Most of the Proposed State NIL Laws Are A Big Backward Step

The natural state of college athletics, when the player arrives on campus for his freshman year, is this: the player owns his Name, Image, and Likeness (NIL) rights.

But the school quickly demands that he waive — hand-over — all those rights. Player NIL, in fact, is The Golden Nugget for the schools and the NCAA, because it has, collectively, such staggering value. And the NIL Waiver is the gun which allows the school and NCAA to hold-up each player, to take that Golden Nugget from him.

(This extraordinary waiver, on its own, is strong prima facie evidence of an employment relation.)

Right now, Player NIL is potentially sold in roughly three different markets:

1) Shoe and Apparel (to Nike, Adidas, etc.);

2) Broadcast: this category includes networks, digital, and video. (These sales actually allow or trigger NIL re-sale, through conferences or other media packages); and

3) Lone-Wolf (my term): these are the remainder uses, usually involving direct, player-specific deals with smaller advertisers, or direct-to-consumer deals.

The Category 3 deal, as of today, is essentially dormant and of little value, since NCAA rules purport to bar player overt appearance in ads for third parties. In contrast, Categories 1 & 2 deals are what distinguish today’s NCAA from that of the mid-20th century. (The NCAA basketball finals, for example, were not even nationally televised until the mid-1960s; now they generate $1 billion annually for the NCAA.)

The primary, glaring defect in most of the new proposed state NIL statutes is that they not only ignore Category 1 and 2 Player NIL uses: they affirmatively bar the player from any participation in such deals.

In effect, as regards the Category 1 & 2 NIL, the statutes eliminate any school need to even get a Player Waiver: the statutes codify it.

(And that player — whether or not Mark Emmert, or Tom Izzo call them “kids” — is NOT a kid. They are all adults. 18-year old entrepreneurs, just like every other 18-year old.)

The result? the statutes generally bar the player from economically participating in the vast majority of NCAA commerce — most of which is built directly atop that player’s NIL.

This result is the principal reason that these proposed (or just-passed) state NIL laws (to steal what was I think Justice Brandeis’ legal term) ‘just plain suck.’

Upon passage of most of these proposed NIL statutes, players are stuck with solely cast-off Category 3 Lone-Wolf NIL rights — for no good reason, other than, most likely, that the schools and NCAA have already sold Category 1 & 2 Player NIL rights, using long-term shoe and broadcast contracts. (Much of this already-sold Player NIL pertains to NIL rights held, right now, by Middle School children, who will, 5 or 6 years from now, play football or basketball at a P5 school.)

The effect of most of these new statutes is to tell the basketball and football players with staggering NIL value that they can have their Lone Wolf NIL — but that the schools and NCAA need to retain the players’ Category 1 &2 NIL rights, in order to fund alot of other things the schools and NCAA think are really good.

It’s a part of a familiar message to black laborers (which is what the P5 basketball and football players are): “You can have a little bit more cash derived from what is your own asset, but we really need to keep most of that cash, because we do so many good things with it — and we are much better than you at deciding what is good.

“Oh, and by the way, the legislature is going to pass a law, to insure that we can keep almost all of the cash derived from your asset. We’ll keep you posted.”

This is how the schools, NCAA, and now, legislatures, treat the adult 18-year old, primarily black sports entrepreneur. It’s not even “separate but equal” treatment: it’s “separate, and a teensy bit of equal.”

About brewonsouthu

lawyer, with interest in college sports and NCAA oversight and decisions, and sports generally.
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