MLB and Its Players Agree to Terms for Potential Resumption of Play Amid COVID-19 Pandemic

By Gregg E. Clifton on

The coronavirus (COVID-19) pandemic has silenced all major sports leagues. Instead of the anticipated opening of the 2020 Major League Baseball (MLB) season during the last week of March, MLB and the Major League Baseball Players Association (MLBPA) announced agreement on the specific terms governing the potential beginning of a coronavirus delayed start to the 2020 season.

The parties have reached agreement on several subjects, including the following:

  • Resumption of Play/Scheduling of Games

MLB and its players agreed to certain safety measures prerequisite to the return to the field. With the goal of playing the most games in the regular season and postseason, both sides agreed to the following conditions:

– No bans on mass gatherings that would limit the ability to play in front of fans.

However, the Commissioner Manfred is authorized to consider the resumption of games in alternate neutral sites “where economically feasible”;

– No travel restrictions throughout the United State and Canada;

– Medical experts must determine that there would be no health risks for players, staff, or fans, with the Commissioner and MLBPA still able to consider the possibility of playing games in empty stadiums.

The parties also agreed on the potential of playing games in neutral sites, in lieu of home stadiums, and that the option of playing in empty stadiums may provide an earlier return to games in COVID-19-free zones as the nation recovers at different speeds around the country.

  • Service Time/2020 Salaries

A crucial component of the MLB/MLBPA agreement was reaching agreement was the issue of lost pay from lost games and service time. Service time is crucial for all players as each day spent on the major league roster determines when a player is eligible for free agency, arbitration and individual player pension credits.

MLB agreed to grant a full year of service time in 2020 for all players who played in the major leagues for the entire 2019 season. If the 2020 season is played, all players will be able to receive a full season of service even if the cancellation of games results in a season less than the typical 172 days.

While receiving a full service time is still possible, the major league salaries and performance bonuses in player contracts for 2020 will be prorated. If the season consists of 100 games, players will receive approximately 62% of their contracted salary.

An interesting aspect of the agreement involves the possibility of a full season cancellation.

If COVID-19 causes the entire 2020 to be lost, the total financial liability for the owners is limited to a $170-million advance guaranteed to be distributed to players in April and May.

The money will be distributed at $5,000 a day ($150,000 a month) for all players on a 2020 major league contract. Other players will receive distributions varying from $1,000 a day ($30,000 a month), $500 a day, and $275 a day, based upon their status and 2020 salary.

  • The Amateur Player Draft

Without a significant voice in this negotiation between MLB and the MLBPA (amateur players are not represented by the MLBPA and are not unionized), several modifications have been made to the draft process. MLB has negotiated numerous changes to the draft process, including the following:

– The original date of the 2020 draft can be moved from June 10th to July 20th

– The number of players to be selected will decrease as the number of rounds to select players has been reduced from 40, to as few as 5. The 2021 draft can also be reduced to as few as 20 rounds. Players undrafted as a result of the reduction of rounds would be only be eligible to receive only a $20,000 maximum signing bonus.

– Payment of signing bonuses will be delayed and the bulk of the bonus will be paid over a two-year period, without interest.

Jackson Lewis’ Collegiate and Professional Sports Practice Group continue to follow MLB and other professional sports as they try to plan for a resumption of competition. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

NCAA Compliance Best Practices for Institutions During COVID-19 Pandemic

By John G. Long and Doriyon C. Glass on

The coronavirus (COVID-19) pandemic has severely affected the world of college sports. Division I conferences canceled their conference tournaments and the NCAA announced it would not be holding NCAA basketball championships this season, ending March Madness.

COVID-19’s impact, however, did not stop there. The NCAA issued a division-wide “dead period” on recruiting through April 15, 2020. Additionally, athletic conferences have been tasked with determining whether Countable Athletically Related Activity (CARA) is permitted during the pandemic and, if so, to what extent. Currently, all Division I conferences have imposed limitations on interaction with current student-athletes. Conference regulations on CARA range from allowing limited CARA to not allowing any activities at all.

The restrictions on in-person team activities and recruiting have Division I coaches utilizing videoconferencing software for virtual interaction with student-athletes and prospective student-athletes. For compliance officers, this change poses unique challenges for rules education and monitoring. Institutions must determine how to appropriately monitor countable and voluntary activities taking place by virtual media.

Institutions should consider implementing the following best practices:

  • Adopt and distribute policies and procedures governing utilization of video and teleconferencing software for communicating with student-athletes.
  • Consider requiring that coaching staff members declare the software platforms they intend to use to communicate with prospective student-athletes during the Division-wide dead period.
  • Continue to issue CARA logs to coaches and student-athletes for sign-off.
  • Have compliance officers request communication logs for the devices coaches choose to use for communications with student-athletes and prospective student-athletes.
  • Provide questionnaires to student-athletes to ensure that voluntary activities conform with Bylaw 17 legislation (Playing and Practice Seasons) and recently issued secondary guidance.
  • Provide student-athletes rules education materials highlighting the differences between VARA and CARA, with an emphasis on virtual communications. For instance, while the provision of workout plans and/or playbooks would not be considered CARA, obligations to follow-up or report on tasks related to the distribution of those materials would make the activities CARA.
  • Have compliance officers attend virtual conferences when possible for the purpose of conducting spot checks.
  • Finally, if possible, check with the IT department or teleconferencing vendors to see if their software includes the functionality to hide attendees from coaching staff members during virtual voluntary meetings.

NCAA enforcement and membership will not be sympathetic to staff members who choose to take advantage of the COVID-19 pandemic to gain a competitive advantage. It is imperative that institutions proactively provide rules education and monitor virtual activities to minimize the risk of allegations involving potential violations.

In addition, institutions should consider checking with insurance carriers and appropriate counsel to determine if workouts occurring or monitored by virtual coaching are covered under their policies.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor how athletic conferences and the NCAA responds to COVID-19, including developments related to CARA. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

The Force Majeure Clause-The New Relevance of the Forgotten Contract Clause

By Gregg E. Clifton on

The recent surge of the COVID-19 pandemic and its catastrophic effect on worldwide events has put the standard contract clause, “force majeure,” in new light.

A force majeure clause, French for “superior force,” is a negotiated contract provision that allows either party to a contract to suspend or terminate the performance of its personal contractual obligations when certain circumstances beyond their control suddenly occur — making that party’s inability to render its performance inadvisable, impractical, impossible, or potentially illegal.

To determine whether a force majeure clause applies and if it can be used as a basis for non-performance, most state courts generally will review and analyze certain factors, including:

  1. The precise language in the clause;
  2. Specific evidence to establish the force majeure event was unforeseeable;
  3. A causation analysis between the force majeure event being relied upon and its connection to the party’s non-performance of its contractual obligations;
  4. Evidence that the impact of the force majeure was so severe that the contractual obligations are incapable of being performed.

Typically, a force majeure clause will include a standard, specific list of events or occurrences that have been agreed on as a basis for either party’s non-performance and deemed unforeseeable. Standard events include “acts of God” (including fire, earthquakes, hurricanes, floods, and tornados), war, riots, strikes, lockouts, specific federal, state, or local governmental actions prohibiting or affecting either party from performing their contractual obligations.

However, as with any contract,

it is important to review this clause at the time the contract is drafted, and, even more importantly, that a careful review of the specific language is conducted before a party attempts to use this “performance escape” promise in today’s pandemic environment.

For example,

if the list of unforeseeable events does not include the phrase epidemic or pandemic, will COVID-19 be considered an excusable “act of God” to forgive performance?

Will a state or local government’s current enactment of temporary attendance limitations still be in place and affect an event in June or July to allow use of a force majeure clause as an excuse for performance in either of those months?

As parties review existing agreements for the potential application of the force majeure clause as a legal basis for non-performance in our current environment, consider the following:

  • What relevant state law application is in the contract?
    • What are the specific state law enforcement requirements on enforcement of force majeure provisions?
  • What is the timing of the event in question and can the force majeure clause be used to excuse responsibility for an event that will not occur in the very near future? How close in time is the qualifying force majeure event to the mandated date of performance, 30 days, 60 days, 90 days, or more? Will the qualifying force majeure event no longer have an impact at the time of the scheduled contractual performance?
  • Does the agreement contain any specific notice requirements? When and to whom must notice be given to the other party regarding the qualifying force majeure event for it to be effective and for the party to be legally excused from performance of its contractual obligations?
  • How will an unresolved dispute over the interpretation of the force majeure clause be handled?
    • Is there an arbitration provision in the contract or will an unresolved dispute result in litigation?
    • Burden of proof: Typically, the party attempting to use the force majeure clause has the burden to establish that a force majeure has occurred.

While we all focus on the continued safety and health of individuals around the world and efforts to limit the impact of COVID-19, the need to assess the continued feasibility of hosting scheduled events become clearer. Jackson Lewis’ Collegiate and Professional Sports Practice Group is available to assist you in the review and interpretation of any existing contracts that contain force majeure provisions for relevancy as a result of the COVID-19 crisis. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

NCAA Will Consider Eligibility Relief for Student-Athletes Affected by COVID-19 Participation Ban

By Gregg E. Clifton on

While colleges, universities, and student-athletes across the country continue to react to the ramifications of the sudden and unprecedented cancellation of the NCAA National Men’s and Women’s Basketball Championship, as well as cancellation of the collegiate spring sports competitive seasons for sports (including baseball, men’s and women’s lacrosse, softball, and men’s volleyball),

the NCAA has already reacted.

The NCAA has announced that it will consider and potentially adopt modifications, changes, or waivers to current NCAA legislation in response to the impact of the COVID-19 pandemic on student-athletes.

Specifically, the NCAA Division I Council Coordination Committee has announced the following actions on behalf of Division I:

Eligibility Relief for Spring Sports Athletes – The Committee agreed that it will be appropriate to grant relief for the use of a season of competition for student-athletes who have participated in spring sports. In considering this, several issues would need to be addressed related to providing an additional season of competition, such as a waiver of current scholarship limitations, financial aid implications, and existing roster size limitations.

Division I Council Committee Chair Dr. Grace Calhoun, the athletic director at the University of Pennsylvania, also announced that the Committee will discuss similar eligibility considerations for winter sport student-athletes who were unable to participate in conference and NCAA championships. The Committee agreed that it will review and discuss all of these eligibility issues in a timely manner.

Cessation of Recruiting Activities – The NCAA announced the adoption of emergency legislation to establish a temporary recruiting dead period (as defined in NCAA Bylaw 13.02.5.5) in all NCAA Division I sports, effective immediately. The dead period will remain in effect at least until April 15 and includes official and unofficial visits, contacts, and evaluations.

To better support and assist our clients as they respond to this challenging public health issue, Jackson Lewis has established a dedicated COVID-19 Task Force that is continually assessing risks, preparing employee communications, and providing practical advice on the compliance issues flowing from Coronavirus workplace concerns and the travel restrictions and new facts we are continuing to learn about COVID-19.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the NCAA in its ongoing response to COVID-19. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions or assistance with an introduction to a Task Force member

The Sports World Responds to COVID-19

By Doriyon C. Glass and Gregg E. Clifton on

As the world responds to COVID-19/Coronavirus, the world of professional and amateur sports is responding as well. The virus had already has begun impacting the sports world and its impact with likely increase. The spread of the virus throughout the United States has led to growing concerns about sporting games and events.  As a result, we will be seeing a very unique March Madness tournament – one without fans present.

NCAA President Mark Emmert has announced that only essential staff and limited family will be permitted to attend tournament games. This announcement came after the news that, the “First Four” NCAA tournament games, which are to be played in Dayton, Ohio, and the first and second round tournament games in Cleveland, Ohio, would be played without spectators. Ohio Governor Mike DeWine had provided that he would be issuing an executive order that these games would be played without spectators, but media would be permitted to be present.

There have been particular concerns in the world of college sports because Division II and III college basketball conference tournament play has begun, and Division I conference tournament play and the NCAA tournament are quickly approaching. The NCAA assembled a Coronavirus Advisory Panel, led by NCAA Chief Medical Officer Dr. Brian Hainline. The panel is working with local, state, and federal authorities to better understand COVID-19. Initially, the NCAA was considering limiting locations that tournament games would be played and having games without public attendance but was not recommending cancellation or public spacing of athletic and related events. However, following Governor Dewine’s announcement, the NCAA limited fan attendance.

Member schools and conferences, which have the power to make their own decisions when it comes to regular season and conference tournament games, were already taking a more cautionary approach. This past weekend Johns Hopkins University prohibited spectators from attending the men’s Division III conference tournament games after a case of COVID-19 was confirmed in Maryland. The Ivy League has gone a step further and recently announced it is cancelling the league’s men’s and women’s conference tournament games, as well as all out of season practices and games. Other measures include the Big East Conference limiting locker room access to only athletes, coaches, and essential team personnel, and the Atlantic 10 Conference suspending handshakes during its conference tournament.

The professional sports world is also feeling the effects, as the BNP Paribus Open at Indian Wells was canceled. Initially preventive measures were contemplated including, ball boys and girls wearing gloves and not touching players’ towels, as well as the installation of over 250 hand-sanitizing stations. However, after a local case of COVID-19 was confirmed in Coachella Valley, the tournament announced it was too great a risk to public health to hold an event of its size.

The four major sports leagues (MLB, NBA, NHL, and MLS) have made major changes to their media policy in response to the virus. A joint statement from the leagues provided that “team locker rooms and clubhouses will be open only to players and essential employees of teams and team facilities until further notice.” Media access will now be limited to designated locations outside of these areas.  Additionally, after San Francisco’s Public Health Office issued an order prohibiting events with more than 1,000 people attending, the Golden State Warriors announced the team will be playing its Thursday night game against the Brooklyn Nets without fans. Many states and localities have issued similar recommendations. The NBA had previously asked its teams to prepare contingency plans for spectators being banned from games, and Lebron James had stated that he would not play without fans in attendance.

Moreover, as this situation continues to develop, it is likely that state and local measures prohibiting or limiting large public gatherings will continue, which will substantially impact the sports world. Although games may continue without spectators, other sports related events will likely be canceled to comply with bans on large public gatherings.

Jackson Lewis’ Collegiate and Professional Sports Group will continue to monitor developments of the COVID-19 and its impact on sports institutions and organizations, and our attorneys are available to assist with related questions and concerns. Jackson Lewis has established a dedicated “Coronavirus” team that is continually assessing risks, preparing communications, and providing practical advice on dealing with this rapidly evolving situation.

For more information related to Coronavirus in education, attend our live webinar Friday March 13, 2020: Confronting Coronavirus/COVID-19 in Education: A Discussion of Best Practices with Live Q&A.

Ivy League Announces Cancellation of All Spring Sports Schedules

By Gregg E. Clifton on

In our continuing effort to inform and update our blog readers, we are providing the following update regarding the impact of the coronavirus and collegiate athletics.

As a result of further developments relating to the outbreak of the coronavirus (COVID-19) and the various newly announced Ivy League campus policies and potential limitations on practices and competitions, the Presidents of the eight Ivy League school members have just announced their unanimous decision to cancel all spring athletics competitions and practices through the remainder of the 2019-2020 academic year.

The decision whether the Ivy League winter athletic teams of who have qualified for postseason NCAA tournament play will participate will be left to those individuals schools to decide.

In reaction to the Ivy League announcement, Harvard University then announced that its men’s hockey team will not play in their scheduled Eastern College Athletic Conference quarterfinal series against Rensselaer. The best-of-three series was due to be played in Troy, New York, this weekend without spectators is now canceled. As a result, Harvard’s season is over and Rensselaer is expected to be awarded wins via forfeit and advance to the semifinals.

NFL Players Association Executive Committee Member Files ULP Against Own Union and Its Leaders

By Gregg E. Clifton on

Russell Okung, a current NFL player and member of the National Football League Players Association’s (NFLPA) executive committee, has filed an unfair labor practice (ULP) charge with the National Labor Relations Board (NLRB), alleging the union has threatened retaliation against its own members and violated its own constitution by forcing a full-member ratification vote of a new 10-year labor agreement between the league and its players despite the objections and lack of support from the union’s executive committee.

Okung’s three-page filing alleges the union violated Section 8(b)(1)(a) of the National Labor Relations Act (NLRA),

which makes it illegal for a union to restrain or coerce union members in the exercise of their federally protected rights. These protected rights include the right of union members to openly discuss and criticize union contract negotiation strategies. Here, Okung alleges the NFLPA illegally threatened him and other union members with retaliation for their failure to join and support the union and had tried to suppress his legal right to speak up.

Okung identifies NFLPA Executive Director DeMaurice Smith as making ongoing threats, and the union’s outside counsel, David Greenspan, as having made a threat on October 31, 2019.

Okung also alleges the NFLPA violated the terms of Section 6 its own constitution by failing to follow the direction of the NFLPA’s executive committee. His allegations are supported by the fact that the 11 members of the executive committee voted 6-5 against recommending the current collective bargaining agreement proposal and that Smit ignored the executive committee and proceeded to forward the contract for member ratification.

Okung also alleges a violation of 8(b)(3) of the NLRA, which makes it illegal for a union to refuse to bargain in good faith over wages, hours, and other terms of employment.

Now, Okung’s ULP charge will go through the NLRB process to determine whether the NLRA has been violated.

The Regional Director will assign specific investigators and oversee the investigation of the charge. The investigators will conduct interviews, attempt to secure affidavits from Okung and likely other executive committee members and review any other pertinent records and evidence to determine whether a formal action should be taken against the NFLPA or whether the charge lacks merit and should be dismissed. If the Regional Director concludes that the charge has merit, a complaint will be issued and a formal hearing will be scheduled before an Administrative Law Judge (ALJ).

While it is doubtful the NLRB will stop the completion of the voting process by NFL players (scheduled to conclude on November 14, 2020), Okung’s strong allegations could affect the voting process, even convincing current players to join veteran NFL players who opposed the current, proposed agreement and vote against its ratification.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the efforts of the NFL and NFLPA to secure a new, ratified collective bargaining agreement and Okung’s efforts to interrupt that effort. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

 

NCAA Representatives Testify on Capitol Hill Urging A Consistent National Approach to Athlete Name, Image, and Likeness Compensation.

By Bernard G. Dennis III and Gregg E. Clifton on

Governor Gavin Newsom and the California legislature shook up the collegiate sports landscape with the introduction and passing of legislation allowing college athletes to benefit from their name, image, and likeness (NIL) in 2019. Several states have followed California’s legislative lead and proposed similar legislation—with some duplicating the exact terms of the California law, up to and including the delayed effective date of the proposed legislation until July 1, 2023. While others, like New York, have added specific costs for colleges and universities to the cost neutral California law in their proposed legislation. In addition, a number of other states, including Florida, Pennsylvania, and Michigan, have proposed NIL legislation that would go into effect as early as summer 2020.

NCAA President Mark Emmert, Big-12 Conference Commissioner Bob Bowlsby, University of Kansas Chancellor Douglas Girod, and NCAA Student-Athlete Advisory Committee Chair Kendall Spencer have testified before a Senate subcommittee regarding NIL athlete compensation. During the hearing,

Emmert acknowledged athletes should be able to benefit financially from their NIL but raised concerns about new aggressive state legislation that does not allow the NCAA the time it needs to enact changes and also preserve the “collegiate model.”

Emmert and Girod also voiced concerns during their testimony over patchwork state legislation across the country that will lead to an unlevel playing field among the NCAA’s member institutions. Bowlsby expanded on these concerns and

cautioned against an “open market of recruitment” that would put smaller and rural institutions at risk to constant poaching of their athletes by institutions with more resources and larger markets.

Ramogi Huma, Executive Director of the National College Players Association – a nonprofit advocacy group for college athletes which claims to have over 20,000 members from Division I campuses, offered an alternative perspective at the same hearing. Huma acknowledged that federal legislation could be helpful in establishing “guardrails” for the changing athlete compensation landscape. However, referring to the O’Bannon litigation in the Ninth Circuit, Huma argued that the NCAA should not be granted an anti-trust exemption which will continue to artificially cap athlete compensation to advance of the illusion of “competitive equity.” Huma asked that any congressional action support rather than hinder the legislation pending in the states which will open up marketplaces for athletes.

Montana Senator Jon Tester noted that the current system is broken and the concept of having fifty different states enacting fifty different rules will pose a problem. However, Tester cautioned against Congress making a solution. Rather, Tester urged the NCAA to advance its timeline and share the proposals it will consider this April with the subcommittee to allow Congress to help the NCAA solve the athlete compensation problem.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the NCAA’s efforts to address the NIL issue, the various state legislative proposals and the anticipated introduction of federal legislation. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

As The NCAA Formulates Options, More States Opt To Use Legislation As The Solution For Name, Image and Likeness Rights

By Gregg E. Clifton on

While NCAA President Mark Emmert addressed the attendees at the NCAA Convention in Anaheim, California, he acknowledged the issues currently facing the NCAA with regard to name, image and likeness compensation rights for student-athletes. Emmert stated, “2020 can’t be a year of business as usual. We’ve got to double down on the opportunities that we provide to our students.” Emmert acknowledged the potential need for solutions to come from outside the NCAA, acknowledging, “…in some case, we need help from Congress…, but this is our job and we got to be clear about it. This is ours to improve and make better.”

While some had anticipated that the NCAA’s annual convention would lead to the announcement of a proposed solution to the name, image and likeness issue, the NCAA remained steadfast that the short term goal for the association is to be able to forward recommendations to the NCAA’s Board of Governors in April that can be a basis for potential legislation to be considered and voted upon by next January.

Gene Smith, co-chairman of the NCAA working group established to study the name, likeness and image issue, commented,

“Everyone’s still talking, nothing’s been thrown out. Right now, everything’s on the table.”

Dr. M. Grace Calhoun, University of Pennsylvania athletic director and the chairwoman of the NCAA’s Division I Council, said small groups of athletic administrators are examining potential areas where athletes could earn money and that there is “consensus” to allow student-athletes to profit from their name, image and likeness in a “work product” situation. She suggested that this could cover things such as starting a small business, earning money for writing a book or charging for lessons in their sport. However, she cautioned, “we’re dealing with student-athletes, and when you look at the principles we’ve established, we won’t cross that line from them being students and turning into employees.”

As the NCAA asserts that it needs additional time to address this issue, new states continue to join the more than two dozen states and introduce legislation while others proceed with the process of formerly advancing bills into law.

In Michigan, House Bill No. 5217, originally introduced in November, has now passed the Michigan House Oversight Committee and continues onto the Ways and Means Committee for further consideration toward becoming law. The bill, similar to the California law, would protect the rights of student-athletes to enter into endorsement agreements for their name, image and likeness without risking their status as collegiate athletes.

In addition, the bill contains specific language addressing a concern regarding the potential use of name, image and likeness rights by colleges as a recruiting tool to attract student-athletes.

The bill would specifically prevent colleges and universities from providing a prospective student-athlete “who will attend a postsecondary educational institution” with compensation for their name, image or likeness.

Unlike other pending state legislation will delayed effective dates, the Michigan bill would become effective July 1, 2020.

While the proposed legislation moves forward in Michigan, Arizona legislators have just introduced legislation at the beginning of 2020 legislative session to amend existing law to address college athletics. Arizona House Bill 2143, introduced by Representative Anthony Kern, provides name, image and likeness rights authorizing student-athletes to receive compensation similar to most other states. The proposed amendment would also restrict colleges and universities from “providing a prospective student-athlete with compensation in relation to the use of the student-athlete’s name, image and likeness.”

Senator Kern commented,

“the NCAA makes millions of dollars, universities make millions of dollars off of these student athletes names. Let them make some money on name, image and likeness.”

Kern further commented on the reason for the August 31, 2021 effective date of the proposed legislation, “I don’t want to lose Arizona talent, Arizona students to California.”

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the NCAA’s efforts to address the name, image and likeness issue and the various state legislative proposals and the potential introduction of federal legislation. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

Virginia Considering Student-Athlete Name, Image and Likeness Legislation

By Gregg E. Clifton and D. Paul Holdsworth on

Virginia has joined the ever-expanding number of states to introduce proposed legislation that would permit student-athletes to benefit from the marketing of their name, image and likeness. In fact, three individual bills have been introduced for consideration by the 2020 General Assembly, all of which would allow collegiate athletes to be compensated for the commercial use of their name, image, and likeness. These bills are Senate Bill 464 (Sen. Bryce Reeves – R), House Bill 300 (Del. Marcus Simon – D), and House Bill 811 (Del. Jason Miyares – R-82nd District). If passed, all of the proposed bills would be effective on July 1, 2024.

The Virginia legislative effort follows the lead of California’s name, image and likeness law, signed by California Governor Gavin Newsom on September 30, 2019 (effective date July 1, 2023). The California law made the Golden State the first to recognize the rights of student-athletes to market and profit from the use of their name, image and likeness and to hire agents to assist with the negotiating and signing endorsement deals without fear of reprisal from their university or the NCAA.

Similarly, each of Virginia’s three proposed bills prohibit universities, athletic associations, and athletic conferences from preventing student athletes from being paid for the commercial use of the name, image, and likeness (such as from their use in video games, jersey sales, and other memorabilia and merchandise). Each of the bills would also prohibit universities, athletic associations, and athletic conferences from preventing student-athletes from hiring agents or revoking scholarships based on an athlete’s profiting from their name, image, and likeness.

However, the three bills contain significant differences. For example,

House Bill 811, would amend the Code of Virginia by adding a section numbered 23.1-408.1 and its definition of “student athlete” would limit the benefits of name, image and likeness rights to only those who participate in Division I football at the Football Bowl Subdivision level.

The “football” limitation contained in the definition would deny other non-football student-athletes within the state from taking advantage of their individual marketing rights.

Unlike California’s law which gained initial support based upon its cost neutral basis to colleges and universities, Senate Bill 464 would not be limited Division I football players but it would create costs to each covered school. It would require that both private and public universities create an injury compensation fund from a percentage of the university’s athletics revenues for athletes that suffer career or season-ending injuries. Senate Bill 464 would also create a wage fund from a percentage of the university’s athletic revenues that would be distributed equally among each student athlete irrespective of his or her sport. The proposed language of the bill specifically requires each private institution of higher education and each baccalaureate public institution of higher education to establish:

  1. a sports injury compensation fund into which the institution shall deposit 7.5 percent of the revenue earned from its intercollegiate athletics programs and from which any student-athlete who suffers a serious or career-ending injury during a practice or competition may apply for compensation upon his graduation, and
  2. a wage fund into which the institution shall deposit 7.5 percent of the revenue earned from its intercollegiate athletics programs and from which each student-athlete shall receive an equal amount of compensation at the end of each academic year.

The university cost provisions contained in Senate Bill 464 are similar to those introduced by New York State Senator Kevin S. Parker in his bill, the New York Collegiate Athletic Participation Compensation Act. Here, Senator Parker’s legislation seeks to require the following:

  • Each college must establish a sports injury health savings account and a wage fund. These will be funded by each college and university with 15 percent of the revenue each school derives from ticket sales for its athletics programs’ events. Half of such revenue will be deposited into such sports injury health savings account and the other half will be deposited into such wage fund; and,
  • Each college’s sports injury health savings account will be established to provide a student-athlete who suffers a career-ending or serious injury during a game or practice with compensation upon his or her graduation; and,
  • At the conclusion of each school year, each college’s wage fund will be divided evenly and paid to all student-athletes attending such college.

For Virginia’s many universities and student-athletes (and future student-athletes), the variations among the three proposals will certainly create passionate dialogue and debate among Virginia’s state legislators and be something to watch closely in 2020.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor Virginia’s three proposed name, image and likeness legislative proposals as well as the many other pieces of similar pending state legislation and the potential introduction of federal legislation. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

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