Utah looking to pave way to directly pay college athletes

A Utah lawmaker has proposed a bill to allow universities to directly pay college athletes for the use of their name, image and likeness.

The legislation also explicitly states that athletes are not employees of a school through participation in an athletic program or because they receive compensation.

Furthermore, HB449 would make contracts between athletes and universities a public record subject to Utah’s Government Records Access and Management Act, or GRAMA.

Bill sponsor Rep. Jordan Teuscher, R-South Jordan, said the proposal is intended to keep Utah universities competitive with schools across the country and ensure they don’t fall behind because the state’s laws are not up to date.

“It’s a very quickly shifting landscape,” he said, adding the bill came as a result of discussions with schools in the state.

The legislation comes as a federal judge is expected to approve a settlement in the House v. NCAA antitrust case this spring that would allow universities to directly pay athletes starting in July.

In that case, the parties negotiated an agreement to distribute nearly $2.6 billion in NIL “back pay” to former and current college athletes who competed in 2016 through Sept. 15, 2024. About 80% of that money would go to football, men’s basketball and women’s basketball players, while the remainder would be available to athletes in other sports.

The settlement also allows schools to directly pay athletes.

Universities could earmark as much as $20.5 million in the 2025-26 school year for revenue sharing. Most Power Four schools are expected to spend $15 to $17 million on their football rosters.

Teuscher said there’s a real question as to whether schools can directly pay athletes and the Utah law would be a hedge against the possibility that a final settlement in the House case isn’t approved.

Are college athletes employees?

One of the biggest debates in college sports is whether athletes are employees of their universities and have the right to unionize. A National Labor Relations Board regional administrator’s decision allowing the Dartmouth men’s basketball team to join a union spurred a hearing in Congress last year. The Dartmouth players, however, ended their attempt to unionize in December.

NCAA President Charlie Baker has asked Congress to pass a law granting college athletes special status that would affirm they are not university employees.

Several bills proposing to regulate NIL have floated around Capitol Hill but none have gained traction. About 30 states have passed NIL-related laws, including some stating college athletes are not university employees.

Teuscher said college athletes were never intended to be considered employees and higher education policies around employment never contemplated them as such.

A U.S. Supreme Court ruling set the stage for college athletes to profit from their name, image and likeness starting in August 2021. Collectives, which are organizations typically founded by alumni and supporters of a school, connect athletes to money-making opportunities as well as negotiate their compensation packages. Though unaffiliated with a university, collectives may have the school’s endorsement.

Under the House settlement, collectives could still facilitate NIL deals but universities could also share revenue with athletes.

Are NIL contracts public records?

Utah would not be the first state to pave the way for universities to directly compensate college athletes. Teuscher said Utah is “certainly among friends” as states either through a law or executive order have moved to put that option in their back pocket.

Last fall, Georgia Gov. Brian Kemp put schools in his state in position to directly pay college athletes with an order that insulates them from any action the NCAA might take against them. Georgia lawmakers are also considering a bill that would exempt direct payments from state income tax, arguing its universities need to stay competitive in recruiting athletes with states that have no income tax. That is not part of the proposed Utah law.

“I think that would be a hard sell for me,” Teuscher said, noting Utah regularly competes for business with states that have no or low income tax.

The Utah proposal adds to an NIL bill the Legislature passed last year requiring college athletes to submit all contracts over $600 to their universities. The school then must provide the athlete written acknowledgment regarding whether the contract conflicts with university policies or provisions of the proposed law. It bans 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.

The statute also exempted NIL contracts and related materials — past, present and future — from the state’s public records law.

The 2024 law, also sponsored by Teuscher, came in response to a Deseret News attempt to obtain athletes' NIL contracts submitted to universities under GRAMA. The schools denied those requests. 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.

In the meantime, the Legislature passed the law shielding the agreements from public access. A judge found that even though the law doesn’t use the word “retroactive,” it applies to all NIL contracts, including those signed before the law took effect May 1, 2024.

Teuscher said those NIL agreements are private because they are between an athlete and a third party. The new bill treats direct payments from schools to athletes the same as other university disbursements which are public records, he said.

Are Utah schools following NIL law?

The Deseret News attempted last year to ascertain under GRAMA how the University of Utah and Utah State University were complying with the requirement that athletes submit NIL contracts over $600 to their schools. The newspaper asked for only the number of contracts submitted in football, gymnastics and men’s and women’s basketball in the first six months since the law took effect.

The University of Utah declined to provide any information, saying the request appears to seek “information rather than records.” The university responded that it is “not required to create a record or to compile, format, manipulate, package, summarize or tailor information in order to fulfill a GRAMA request.”

Utah State University has had 10 disclosures — two in football, five in men’s basketball, one in women’s basketball and two in gymnastics.

The scant information makes it difficult to know whether schools are complying with the law. It suggests that, at least at Utah State, there are few athletes with NIL agreements that exceed $600 or possibly that contracts are not being submitted at all.

While the current law has no way of tracking whether athletes or schools are following the law or penalizing them if they aren’t, Teuscher noted his bill includes audit requirements to evaluate the money schools spend on directly paying athletes.