The NCAA took a tentative step toward allowing athlete compensation Wednesday when the organization’s Board of Governors announced support for a plan that permits athletes to be compensated for the use of their names, images and likenesses.
Membership will draft legislation on new name, image and likeness rules by Oct. 30, and schools could take a formal vote on the proposal by Jan. 31. If passed, the NCAA said new rules will be put into effect by the start of the 2021-22 academic year.
“The member schools have embraced very real change that’s necessary to modernize our name, image and likeness rules,” NCAA President Mark Emmert said in a teleconference with reporters Wednesday.
The recommendations come with what Emmert, Ackerman and Smith called “guardrails” to ensure that athletes receive compensation at an appropriate market rate and that payment is not used to entice high school recruits.
Among other things, athletes cannot wear school-branded apparel in personal endorsement deals. They must disclose the financial terms of their contracts with athletic departments or face potential penalties to their eligibility. And while athletes can hire agents to facilitate marketing opportunities, the agents cannot seek professional sports opportunities while the athletes are in school.
“The reason for the guardrails is to address some core concerns,” Ackerman said. “First, we want to make sure that our system continues to feature students competing against students and not one where athletes are employees who are paid salaries or disguised salaries by their schools. The upshot of this principle is that schools will be separated from the NIL activities. The payments will come from third parties only, and school intellectual property will not be allowed in these endeavors."
Among the details to be finalized: Who determines appropriate market rate for less-defined arenas such as social media mentions, and how will agents will be regulated?
“We can’t emphasize enough that what the board approved and what the working group brought forward was essentially a green light to explore those kinds of questions,” Emmert said in response to a question about determining fair market rates. “… There was, throughout this process, a lot of engagement with the sports marketing world around those questions.”
The NCAA will look to Congress for help as it works to change its rules and seek a federal law that keeps states from passing their own legislation on athlete compensation. The organization’s about-face in the past year or so on NIL rules was prompted by pressure from state lawmakers.
California was the first state to pass a bill that will prohibit colleges from punishing athletes for accepting endorsement money from a third party beginning in 2023. More than two dozen states followed suit.
“We’re going to continue to engage with Congress to continue to navigate these challenges,” Emmert said. “It’s clear we need Congress’s help in all of this.”
Federal lawmakers already have a bipartisan working group in place looking into athlete compensation. The group, which includes Sens. Mitt Romney (R-Utah), Marco Rubio (R-Florida) and Cory Booker (D-N.J.), formed in December.
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