An uncommon combination of three U.S. Senators, Sens. Richard Blumenthal (D-Conn), Jerry Moran (R-Kan.) and Cory Booker (D-NJ), collaborated to draft “The College Athletes Protection & Compensation Act” (the Act), which is the newest legislative proposal in the evolving name, image and likeness (NIL) area of college athletics.
Several other federal NIL legislation proposals have already been put forward (e.g., Tuberville and Manchin Federal NIL Proposal) and various states have also passed conflicting NIL laws (e.g., New York’s NIL Law). As a result, Senators Blumenthal, Moran and Booker are undertaking the responsibility of providing clarity and consistent NIL standards with the draft Act which comes at an important time before federal lawmakers leave for their summer break.
Establishment of the College Athletics Corporation
Significantly, the Act includes the creation of the College Athletics Corporation (CAC), which would:
- Establish best practices, rules and investigatory processes and bring actions to enforce the Act;
- Enforce standards for reviewing and certifying endorsement contracts entered by college athletes;
- Establish formal certification processes for athletic representatives;
- Provide recommendations to higher education institutions on how to protect college athletes from unscrupulous athletic representation;
- Investigate disputes with respect to agency and endorsement contracts and provide college athletes with swift processes for resolving these disputes; and
- Ensure higher education institutions and covered athletic organizations comply with agency and endorsement contract rules set forth by the CAC.
CAC’s Board of Directors would consist of 15 voting members. Out of these 15 voting members, at least one-third must be current or former college athletes, and at least 20 percent must be actively engaged in college athletic events or engaged in college athletic events during the 10 years preceding the appointment to the Board of Directors.
Additionally, the Act would grant the CAC subpoena power. States that bring actions on behalf of their residents to enforce compliance with the Act would also be required to provide written notice to CAC prior to filing an action and provide a copy of the legal complaint. After receiving written notice, the CAC would have the power to intervene in these actions and the ability to remove such actions from state court to the relevant federal district court.
Protections for College Athletes
The Act would require various protections for college athletes, including:
- Higher education institutions must provide college athletes with a list of rules governing endorsement contracts;
- Within seven days of entering into an endorsement contract, college athletes must provide a copy to their higher education institution;
- College athletes cannot be punished for entering into a professional sports draft if they do not receive compensation from relevant professional organizations and declare within seven days after entering into a professional draft their intent to resume participation in college athletic competition;
- Athletic associations must not discriminate on the basis of sex and provide non-discriminatory access to athletic facilities; and
- Higher education institutions must disclose information to college athletes involving grant-in-aid; provided medical coverage; whether disability insurance is provided; revenues and expenditures; average hours spent in college athletic competition; college athletic compensation by athletic program; and academic outcomes, majors and endorsement value statistics for college athletes by program, race, ethnicity and gender.
Medical Expenses and Trust Fund
The Act also specifies requirements for higher education institutions regarding medical benefits to current and former college athletes. For medical care, higher education institutions with at least $20 million in athletic revenue would be required to cover student-athlete medical expenses for at least two years after their final competition, and those with at least $50 million would be required to cover expenses for at least four years after the final competition. Further, the Act would create a medical trust to cover long-term injuries not supported by higher education institutions requiring institutions with revenues of at least $50 million to contribute annually to the fund.
The Act seems to be one step closer to the federal government implementing a standardized NIL law, which is supported by the NCAA. It could also lead to a legal battle with any conflicting state laws. Higher education institutions should continue monitoring both federal and state legislation as the NIL environment evolves.The Jackson Lewis Collegiate and Professional Sports Industry group is well-versed in NCAA issues and continues to analyze ongoing developments in the area. Please contact a Jackson Lewis attorney with any questions regarding NCAA and any other collegiate and professional sports developments.