Utah passed a bill Friday governing college athletes’ use of their name, image and likeness, including making NIL agreements submitted to universities for review exempt from the state’s public records law.

While about 30 states have passed NIL laws and many have legislation pending, HB202 is Utah’s first attempt to regulate NIL in college sports. It comes as a federal judge in Tennessee last week issued a preliminary injunction barring the NCAA from enforcing its rules prohibiting NIL compensation for recruits in a lawsuit brought by the states of Tennessee and Virginia.

How Utah governs NIL

The Utah law would require athletes to submit any contract over $600 in value to their university. The school then must provide the athlete written acknowledgment regarding whether the contract conflicts with university policies or provisions of the proposed law. The bill further states that the agreements, along with any other correspondence or material related to them, would not be subject to Utah’s Government Records Access and Management Act, or GRAMA.

The legislation bans college athletes from promoting tobacco and e-cigarettes, vaping products, alcohol, a seller or dispenser of drugs including marijuana, antibiotics and steroids, gambling or betting, sexually-oriented businesses and firearms they could not legally own. It also prohibits schools using tax dollars for NIL purposes.

The Senate approved the bill Friday 21-7. It passed the House last month. If the governor signs the bill, which he intends to do, it would take effect May 1, 2024, and exempt all NIL agreements signed before and after that date from GRAMA.

Gov. Spencer Cox said he “hates” NIL and that it’s a “terrible thing” for college sports but it’s the law now.

“We’re at a big competitive disadvantage if other states aren’t required to release the terms of those contracts,” he said. “And as much as I’d like to get rid of all this, I do support the bill. I think it’s the right thing to do, put us on a level playing field and, especially because it involves young people and minors, I think it’s OK.”

Utah House clears path to keep college athletes’ NIL deals private

Jeff Hunt, a Salt Lake City media law attorney, said the legislation would move Utah in the wrong direction on public oversight of college athletic programs.

“It’s a huge missed opportunity. Utah could have been a national leader on this issue. But rather than embrace transparency and accountability, the Legislature has made NIL a black box at all of Utah’s taxpayer-supported universities. How can the public have any confidence that these deals are being properly regulated when there is zero public oversight?” said Hunt, who represents the Utah Media Coalition, a consortium of news outlets that works to keep government records open.

Lawmakers contend that allowing NIL contracts to become public records would put Utah schools at a competitive disadvantage for recruiting athletes. They also said NIL contracts are private agreements between a business and an athlete.

Sen. Chris Wilson, R-Logan, said he owns a business that has contracts with college athletes. He said businesses would leave the NIL space if the agreements became public. He also said it would harm minority athletes in particular.

“Most of my NIL contracts are with minorities. I believe it would hurt our minorities and many of them come to our state with very, very little and this NIL contracts are very, very small amounts and they have been able to help minorities that have come with very, very little,” Wilson said on the Senate floor.

Are NIL contracts public records?

The Deseret News is currently in litigation with the University of Utah, Utah State, Weber State, Utah Valley and Southern Utah universities over whether NIL contracts are public records. It is unclear how the new law would impact the court case.

Last October, the State Records Committee unanimously ruled that NIL contracts are public records and ordered the schools to release them. The universities challenged the decision in court.

“Considering the public interest in college sports, the fandom and the immense revenue our public institutions capture from athletics, it’s apparent to us that a university compliance officer reviewing these contracts to ensure players’ eligibility under the rules is indeed conducting the public’s business,” according to the committee.

The universities say that NIL contracts are protected under the federal Family Education Rights and Privacy Act, or FERPA, and are not subject to Utah’s public records law. They also contend the records committee lacks the authority to order disclosure of the agreements.

Revamped Utah bill aims to exempt NIL agreements from open records law

The Deseret News maintains that NIL contracts become public records when universities require athletes to submit the agreements for review. Most universities have policies and some states have laws requiring athletes to submit their NIL contracts to a compliance office for review or approval before an athlete signs the agreement. Schools say they review the contracts for a number of reasons, including wanting to weed out bad actors and to ensure the agreements don’t jeopardize players’ eligibility.

Hunt, who represents the Deseret News in the court case, argued in legislative hearings that as long as public universities regulate the NIL activity of college athletes to ensure compliance with NCAA rules, the public has an interest in monitoring that compliance function.

Judge blocks NCAA rules

Last week, U.S. District Judge Clifton Corker in the Eastern District of Tennessee issued the injunction that undercuts what has been a fundamental principle of the NCAA’s model of amateurism for decades: Third parties cannot pay recruits to attend a particular school, according to The Associated Press. The judge wrote the NCAA’s stance likely violates antitrust law with Congress so far unwilling to give the organization an exemption. The judge said athletes with a limited window are hurt by not being able to know their true value before committing to a school.

“Without the give and take of a free market, student-athletes simply have no knowledge of their true NIL value,” Corker wrote in his ruling. “It is this suppression of negotiating leverage and the consequential lack of knowledge that harms student-athletes.”

The judge also took issue with the NCAA’s strategy to prevent recruiting inducements, including the association’s attempt to classify NIL collectives, which raise and distribute money, as boosters.

“The NCAA’s prohibition likely violates federal antitrust law and harms student-athletes,” Corker wrote.

During discussion of the Utah bill, one state senator called NIL a “terrible mistake,” leading to the demise of amateur athletics.

“There is no one more upset about this move from college being amateur sports to semi-pro than I am,” said Sen. Ann Milner, R-Ogden, a former president of Weber State University who supported the legislation.

“We walked away from the principles of amateur sports,” she said. “If we’re going to play in a different game, we have to have different rules that allow us to be competitive with everyone else.”

How NIL is transforming college sports