How Federal Legislation Can Save the
NCAA from Itself
George Sdregas | July 2021
Football players from the University of Nebraska and The Ohio State University shake hands before a game, 2018
n June 21st, 2021, in National Collegiate Athletic Association v. Alston, the Supreme Court ruled in favor of student-athletes. The justices, in a unanimous decision, determined that the NCAA cannot prevent certain education-related benefits from being offered to college athletes. This landmark decision opened the floodgates for student-athletes in their fight for the right to capitalize on their own name, image, and likeness (NIL).
In the opinion, Justice Gorsuch determines that it is a violation of federal antitrust law to prohibit donations to athletes, specifically donations related to academic pursuits. Gorsuch explains that, under the Sherman Act, the NCAA had near-complete market power over profits created by athletes. The unanimous decision revealed striking facts about the lack of organization, as well as decades of corruption and coercion, within the NCAA. In a concurring opinion, Justice Kavanaugh wrote that he believes many other NCAA regulations violate federal antitrust laws. He also identified this landmark decision as the first of its kind against the NCAA, but expected more to come.
Justice Kavanaugh was on to something, as just nine days later, on July 1st, the NCAA dropped its rules barring students from capitalizing on their own name, image, and likeness. This news came as no surprise; pressure from states and universities alike, along with countless athletes, made this decision inevitable. However, problems abound following this decision, notably in that it leaves room for a great deal of confusion and inconsistencies among states regarding state-level NIL legislation.
As a result of the vacuum created by the NCAA and the subsequently confusing web of state laws determining the bounds of student-athletes’ ability to profit from their NIL, we’ll see that the status quo is quite harmful to the very competitiveness of college athletics, a competitiveness which millions of Americans hold dear. I argue that to best uphold competition in college athletics, legislation determining the degree to which student-athletes can profit from their NIL must be established at the federal level. Here’s why.
From its inception under President Theodore Roosevelt, the NCAA was organized primarily as a standard-setting body to enhance the safety of college athletics. Today, it could not look any more different.
First, the organization’s standards are extremely out of date. When NCAA regulations were first passed, outlining whether athletes should profit from participating in college athletics, NIL was not even discussed. Athletes had no extensive platform for popularity, as collegiate contests were not considered by the general public to be “entertainment.” Only a handful of schools even participated in competitions. NCAA restrictions were simply established in order to prevent schools from bribing athletes to enroll.
120 years ago, the prospect of college athletes having millions of fans and the ability to make money from their own image was unthinkable. Today, it's a reality, a reality still being governed by restrictions not updated for over a century.
Making matters worse, amidst recent pressure from lawmakers and universities, the NCAA went from completely prohibiting monetization through NIL to having no guidelines defining its use. NIL regulations that had been worked on for over two years to create some guidelines got scrapped in a matter of hours, as the NCAA decided to rid itself of NIL headaches by altogether dropping its rules prohibiting compensation for athletes based on their NIL.
So instead of creating policies to outline and bring much-needed guidance to student-athletes looking to profit from their NIL, the NCAA is dodging the question. The organization once created to be a standard-setting body is now the exact opposite.
As of July 1st, an interim policy has been put in place by the NCAA and is already proving to be problematic. The policy is bland, not creating any guidelines for athletes or universities, and was established by the NCAA as a way for the organization to completely exempt itself from involvement with NIL.
This new policy can be seen as an attempt to leave room for states to step in and create legislation and guidelines for NIL profitability while the NCAA sorts out its own NIL rules. The reason this is problematic is that, inevitably, some states are going to create stricter sanctions than others. This makes it more difficult for universities in those states to recruit, creating an uneven playing field.
Why a Federal Solution?
Before July 1st, when the NCAA effectively allowed its players to profit from NIL, 19 states had already passed similar policies enabling athletes to profit.
Yet state-level NIL legislation can create an uneven playing field, on which states with favorable NIL restrictions would experience boosts in the quality of their respective institutions’ recruiting classes, while states with unfavorable laws could deter recruiting.
For example, senators in California are deciding to make their own NIL legislation, outlined in the recently-proposed Senate Bill 26. If passed, the bill would enable California student-athletes to profit from their NIL. Even though the bill will likely be passed, California athletes are being forced to wait while their counterparts in other, more lenient states, such as Georgia, can reap the benefits immediately due to divergences in state legislation.
And while this has not yet been seen, states could also make laws to bolster recruitment to their respective universities, an effort which could include incentives for attending a university in their state or the ability to use state or school colors and logos in advertisements. The worst possible outcome of this situation is an exacerbated inequality among universities in different states, with some states’ universities receiving an outsized portion of revenue and top-notch athletic recruits.
States are not the only entities which have created different NIL regulations and guidelines: universities have as well. Controversies over how these regulations will be implemented are already being seen, namely observed in inconsistencies between the NIL policies of different schools. For example, Louisiana State University has decided to allow players to use the school's logos and colors in promotions involving their name, image, and likeness. In contrast, the University of Arkansas will not allow this. Even though the schools are in the same athletic conference and compete against each other, their athletes are not given the same privileges. This incentivizes athletes to attend one school over another, exacerbating inequalities in recruiting, leading to inequalities in universities regarding athletic performance.
Federal NIL legislation is the only way to establish a more level playing field.
First and foremost, once a law is created at the federal level, it would apply to all states and universities equally. Laws, including those determining whether logos can be used or not, caps on monetization, and recruiting standards will be created to ensure a level playing field. Federal legislation would ensure that schools in states with previously lackluster or nonexistent NIL guidelines would have better access to top athletic talent.
An Uncertain Future for Competition
The NCAA is on the brink of chaos if it maintains its insufficient status quo. Like a volcano, inequality can erupt at any second due to the lack of proper legislation and guidelines. The effects of such an eruption could be catastrophic. Recruiting advantages now would be practically irreversible due to the upper hand that universities with larger budgets are given in the process of attracting top athletic talent. Once a school gets on top, there's a reason it stays on top. The best high school athletes want to go to the best college programs, creating a perpetuating cycle of feast or famine, reinforced by favorable state legislation.
Without federal legislation ensuring that all states and their respective universities have the same NIL policies, competition in college sports is going to become increasingly lob-sided. This inherently means underperforming programs will be at an even greater disadvantage, namely a financial one: programs that perform poorly may even be at risk of termination by the universities that fund them.
This termination of programs is an activity in which some universities are clearly not afraid to engage. The University of Akron terminated its men’s golf, men’s cross country, and women's tennis programs just last year due to budget constraints. If universities cannot become competitive against opponents due to the existence of moneyed advantages, especially in smaller sports, they run a high risk of being forced to shut down a majority of their athletic programs. Unevenly applied NIL laws that favor some universities over others and some states over others, will perpetuate inequality and result in an oligopolistic competitive landscape in college sports.
The competitive nature of college athletics is on the brink of being radically altered and diminished. Once created as a governing body, the NCAA is now avoiding its rulemaking responsibilities regarding one of the most controversial topics in college athletics. Even worse, individual states know they have the power to take over and create their own NIL laws at any time.
Federal legislation is the only feasible route to upholding competitiveness in college sports. Above all, equality is essential in collegiate athletics. Without equality, most smaller, less competitive programs would struggle to exist. The only way to ensure equality in rules and regulations surrounding NIL laws is by creating precedent and parameters at a federal level. The very competitiveness of one of America’s favorite pastimes, collegiate athletics, might just depend on it.