New NIL Rules : What Just Happened?

On June 27th the NCAA released new guidelines for their NIL rules when those rules conflict with state laws and regulations. The NCAA executive vice president of regulatory affairs, Stan Wilcox, sent a memo to all NCAA programs stating that “If a state law permits certain institutional action and NCAA legislation prohibits the same action, institutions must follow NCAA legislation.” This announcement from the NCAA is likely resulting from several states passing laws that allow universities to be more directly involved with their student athletes’ NIL deals and activities. Specifically, the NCAA memo explains that because all universities within the NCAA are voluntarily part of a national organization, they must follow NCAA rules when they conflict with state laws. Obviously, this decision from the NCAA is certain to cause problems in the very near future. The NCAA’s viewpoint is that there is precedent for NCAA rules to supersede state laws, this is because in the past the NCAA has had far stricter rules than state governments on things such as drug use, gambling, and admissions requirements. However, the confliction of NCAA rules and state laws are now most likely to intersect when it comes to who is allowed to fund these NIL deals.

              Arkansas, Oklahoma, and Texas have all recently passed state laws which allow boosters and fundraising groups to meet with athletes to discuss possible NIL offers. Specifically, Texas passed a law on July 2nd stating that third-party donors and boosters can work in tandem with schools’ athletic departments to fund NIL deals. In return the law states that these schools can then reward these donors and boosters with perks such as easier access to season tickets for events or better seating at specific events to name a few. Not only are these laws conflicting, but the Texas law specifically states that “the NCAA and its conferences are prohibited from punishing any school that takes advantage of these new types of NIL activities.” This means that if the NCAA tries to discipline a university for breaking the rules, that university could then respond by filing suit against the NCAA. Clearly, this sets the stage for countless legal battles in the near future. The early indication is that the memo sent out by the NCAA is more bark than it is bite, especially when it comes to state laws, as can be seen Texas A&M athletic director Ross Bjork stated point blank when asked about the confliction. Bjork stated “We will continue to communicate with the NCAA on a variety of matters, but in terms of this, the state law will reign.”

              The future of NIL is currently unclear. State lawmakers have begun to set the rules and the NCAA will likely try and counter these specific state laws with more rules and sanctions of their own in an attempt to keep an even playing ground between universities. Unfortunately for the NCAA, if they enforce their rules and sanctions against universities who are operating under their own state law, they would absolutely be opening themselves up to lawsuits. The road ahead is sure to be an interesting one and I am curious to see what the next steps are for both the NCAA and state lawmakers. - Hunter DeSantis, 3L

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NIL Fraud: How to Avoid It