Cruz bill would give NCAA power over NIL rules

Dive Brief:

• The NCAA would have the power to set national name, image and likeness, or NIL, policies, which allow college athletes to profit from their celebrity, under a bill Sen. Ted Cruz announced Wednesday.
• Cruz’s legislative proposal would also establish that college players are not employees. This would likely anger athlete advocates and policymakers who have called for compensation and broader labor rights for players.
• While other federal lawmakers have offered their own NIL bills, Cruz’s stands to make waves. The NCAA is backing his proposal, and Cruz, a Texas Republican, is the ranking member of the Senate Commerce, Science, and Transportation Committee. It has jurisdiction over athletics issues and would likely control the initial stages of any NIL legislation.

Dive Insight:

The NIL policy landscape has turned rocky over the last few years. 

Though the NCAA had long prohibited college athletes from earning money based on their personas, in 2019, California passed legislation authorizing NIL deals. This spurred similar legislative action in other states, essentially forcing the NCAA to get on board. The association formally started allowing NIL compacts in 2021.

However, state NIL laws can differ drastically, and some have undercut the NCAA’s authority. Texas and Oklahoma laws block the NCAA from regulating NIL deals.

The NCAA has called for Congress to establish a national standard through legislation, though none of the proposals to date have come close to passing. 

Cruz’s legislative plan would empower the NCAA to set and oversee NIL rules and protect the association from legal challenges to those policies. This differs from other federal bills, which have called for a third-party entity to regulate NIL.

The new bill also would mandate the creation of a national database of NIL contracts.

NCAA President Charlie Baker said in a statement Wednesday that Cruz’s bill would allow the association to “be well positioned to go further in our efforts to protect student athletes from exploitive behavior and provide consistent, national rules at a time when states are engaging in a race to the bottom to gain a competitive edge.”

However, the bill’s prohibition against establishing college athletes as employees will likely be a point of contention. 

This issue has in fact already engendered controversy. The National Labor Relations Board in May filed a complaint against the University of Southern California, NCAA and Pac-12 Conference, alleging they violated federal law by not classifying players as employees.

Two years prior, Jennifer Abruzzo, NLRB’s general counsel, issued a memo stating college athletes are employees under the National Labor Relations Act.

Court cases have also trended in favor of athletes’ labor rights. 

In 2021, the U.S. Supreme Court, in NCAA v. Alston, ruled that the association and its member institutions infringed on federal law by limiting how much athletes can be compensated for academic-related costs.