NCAA sets up confrontation with state lawmakers concerning NIL guidelines

The NCAA on Tuesday set up a confrontation with state lawmakers around the country concerning its rules governing athletes’ ability to make money from their name, image and likeness (NIL).

Several states, including Arkansas, Oklahoma and Texas, recently have passed laws that conflict with NCAA rules, including those related to schools’ interactions with collectives — booster- and business-driven organizations that have formed to pool resources and NIL opportunities for athletes at various schools and can be promoted in limited ways by the schools.

However, in a letter to Division I schools obtained by USA TODAY Sports, the NCAA said, “If a state law permits certain institutional action and NCAA legislation prohibits the same action, institutions must follow NCAA legislation.”

Some of the new state laws include language that aims to specifically prohibit the NCAA from taking action against a school that follows the state law, but brings it into potential violation of NCAA rules. These provisions, among other actions by states, are driving the NCAA and many of its member schools and conferences to vigorously lobby members of Congress to pass federal legislation that would create national rules for college sports’ NIL environment.

NCAA president Charlie Baker recently alluded to such situations during an appearance at a conference in Washington sponsored by the University of Arizona titled “The Future of College Sports.” Baker said these states “say, ‘Screw the NCAA, screw the conference, screw their rules.' ”

Tuesday’s letter made clear the position of the NCAA’s central office. In a question-and-answer section, the letter includes the following:

Q: “Some current and proposed state laws appear to now prohibit the NCAA from enforcing its rules. What is the NCAA’s position on its approach when an institution in one of those states violates NCAA legislation?”

A: “NCAA rules are adopted by member schools. It is not fair to those schools who follow the rules to not enforce rules against those who choose not to do so. Schools who do not like the application of a particular rule should work through the NCAA governance process to change the rule. Unless and until the membership changes a particular rule, all schools, as part of a voluntary membership, are required to comply.”

How this will apply in practical terms remains to be seen.

"It's going to be a question of question of whether the NCAA is actually going to penalize a school" for an action allowed under its state law, said Mit Winter, an attorney with the Kansas-based firm Kennyhertz Perry who is an expert in NIL rules. He said he believes that in such a circumstance, the school likely would sue the NCAA, which would then be risking a ruling that would cement the concept of state laws superseding NCAA rules.

But Winter noted that the association's letter Tuesday may represent thinking by its leaders that: "If we don't take a stand, as an entity, we become irrelevant."

Oklahoma state Rep. Jon Echols, who sponsored the recent law in his state, said he didn't want to address hypothetical legal questions, but: "The NCAA has a long history of losing court cases. It's kind of what they do. … My point here is that the NCAA has absolutely no idea about what it's doing on NIL."

In April, Arkansas Gov. Sarah Huckabee signed into law Act 810, which states that universities “shall not uphold any rule, requirement, standard or other limitation” outlined by the NCAA or a specific conference “that prevents a student athlete from earning compensation for the commercial use of the student-athlete’s publicity rights.”

One month later, Oklahoma Senate Bill 840 similarly amended the state’s NIL laws to prohibit the NCAA from interfering with in-state schools in the establishment of “agreements with a third-party entity to act on its behalf” to arrange NIL activities for its student-athletes.

In Texas, a bill is set to go into effect on July 1 providing in-state universities the same freedom from NCAA rules and regulations regarding NIL. The Texas law will also allow third-party entities operating as 501(c)(3) non-profit organizations to compensate an athlete for their NIL rights.

And Missouri's legislature has sent to the governor a bill that creates greater latitude for NIL activity than is allowed by the NCAA and says: "An athletic association, athletic conference, or any other organization with authority over varsity intercollegiate athletics shall not … Entertain a complaint, open an investigation, or take any other adverse action against a postsecondary educational institution or any of its employees for engaging in any activity protected under this" law.

While Tuesday’s letter represents an effort by the NCAA’s central office to maintain some degree of level competition among schools when it comes to NIL activities, it also may be aimed at creating the type of conflict that could create greater urgency for federal lawmakers to act.

One bill regarding college sports and NIL activities has been introduced in Congress this year and draft versions of two others have been widely circulated.