While states across the country have passed laws related to name, image and likeness opportunities for college athletes, Utah has taken a wait-and-see approach.
The waiting, though, might be over.
State lawmakers will consider for the first time at least one and possibly more NIL bills when they convene in general session next week.
HB202, sponsored by Rep. Jordan Teuscher, R-South Jordan, spells out what college athletes, institutions, collectives and booster clubs can and can’t do regarding NIL. It prohibits pay-for-play, bans endorsing certain products such as tobacco and makes clear that college athletes are not employees of their schools.
“The intent of the legislation is to ensure that our universities in the state are able to compete on a level playing field with the other universities across the nation. I don’t want to do anything that is going to hurt our ability to compete,” he said.
But, Teuscher said, universities in the state already have concerns about some of language in the bill, “so expect significant changes.”
The University of Utah is reviewing the legislation but had no immediate comment on the measure.
As proposed, the Utah law, among other things, would:
- Require athletes to disclose to the university any contract with a professional services provider before entering into the agreement.
- Ban inducements for future NIL compensation to recruit an athlete and sign an NIL agreement before an athlete is enrolled in school.
- Provide that athletes are not considered employees of the institution based on their participation in athletics.
- Prohibit athletes from endorsing alcohol, tobacco, e-cigarettes, gambling, sexually oriented businesses, companies that sell substances such as steroids, antibiotics, marijuana and firearms that the athlete cannot legally purchase.
- Not limit or prevent a college athletic program employees from promoting, participating or supporting a school’s booster club or collective.
- Not prevent a university representative or employee from creating, facilitating or assisting an athlete with opportunities to earn compensation from a third party.
- Allow a collective to create a loyalty points program to recognize or provide benefits to donors.
- Ban a third party from acting on behalf of the institution, an institution’s employee or collective from acting as an athlete’s agent or receiving compensation for providing assistance.
Many of the provisions in the Utah bill parallel university policies as well as guidelines the NCAA established after a U.S. Supreme Court ruling paved the way for college athletes to receive compensation.
As of July 1, 2021, college athletes were permitted to profit from the use of their name, likeness and image. Those activities, which may include endorsing products, appearing in commercials, signing autographs and monetizing social media platforms, must be consistent with state NIL laws or, in their absence, university policies.
According to NCAA guidelines, NIL opportunities may not be used as a recruiting inducement or as pay-for-play. Deals must be based on a true quid pro quo arrangement — meaning the athlete must do some work, whether it be a social media post, public appearance or TV commercial. It prohibits deals that are contingent upon an athlete’s enrollment at a certain school or upon athletic performance.
Just this week, the NCAA punished Florida State after an assistant football coach violated NCAA rules when he facilitated a meeting between a transfer prospect and a booster. The booster, who was the CEO of a collective, encouraged the player to enroll at Florida State and offered him a $15,000 per-month NIL opportunity.
The NCAA placed the school on two years probation and required it to disassociate with the collective for one year and the booster for three years, among other things. It is the first time the NCAA has handed down an NIL-related punishment.
More than half of states have passed NIL legislation, some modeled after California’s Fair Pay to Play Act, but creating a hodgepodge of laws throughout the country. Some of the broader state laws give schools in those states an advantage of others. Proposed federal legislation to bring some uniformity has languished.
Several lawsuits also aim to have college athletes declared as university employees, a position athletic conferences and universities have drawn a hard line against.
“It’s crazy out there,” Teuscher said.
He said his legislation isn’t groundbreaking but that he’s trying to level the playing field for athletes in Utah and trying to make sure the state isn’t falling behind.
The legislation wasn’t contemplated as an attempt to codify NIL in Utah. But because there is nothing in state law, legislative attorneys who drafted the bill wanted to add the process universities in the state currently follow, Teuscher said.
He said several collectives — entities typically founded by alumni and supporters of a school that raise money and connect athletes to money-making opportunities — approached him about running a bill to clarify a question about donations.
Specifically, they’re asking for clarity in the law that would allow those donating to collectives to also receive some sort of credit with booster clubs.
“What I’m working on isn’t too sexy,” Teuscher said.
Maybe not. But it could be significant for donors.
Collectives such as the Royal Blue Collective at BYU and the Crimson Collective at the University of Utah are endorsed but not sponsored by the schools. Universities also have booster clubs such as the Cougar Club and the Crimson Club that raise money for the athletic programs. Collectives and booster clubs compete for the same donor dollars.
Joining the booster club affords members certain privileges, such as buying season tickets earlier or access to events or meeting with coaches depending on the level of their donation.