NCAA: Congress releases multiple bills focusing on NIL and the transfer portal

On Tuesday, the United States Congress released its third bill in less than a week focusing on NIL and the transfer portal. Yes, you read that correctly. The NCAA and its new world of NIL and the transfer portal are now the subject of congressional debates and potential federal laws.

On3’s Pete Nakos has been all over the reporting that surrounds these bill proposals and has done a great job synthesizing all of the information here.

Three facts should be mentioned before diving into the NIL and transfer portal-related bills.

First, it is important to realize that bills are not laws. Bills are proposed laws that must be passed by both the House of Representatives and the Senate and then approved (by avoiding veto) by the President of the United States.

Second, it is also of note that these three bills are not the first bills proposed in Congress about NIL (and, to a lesser degree, the transfer portal). However, these three bills seem to have more public support and, with three released in quick succession, urgency behind them. To this point, no bill on NIL has ever actually made it to the Congress floor for a vote.

Third, NCAA President Charlie Baker (a former Governor of the state of Massachusetts) has lobbied publicly for federal help in regulating the wild, wild west that previous NCAA President Mark Emmert created. Emmert’s long-standing fight against any form of NIL or free transfer, followed by the NCAA’s sudden and simultaneous allowance of both, opened the floodgates that Baker and the rest of the NCAA are now trying to close.

The first of these three bills was released last week by Senators Richard Blumenthal (D-Connecticut), Cory Booker (D-New Jersey), and Jerry Moran (R, Kansas). The bipartisan bill, if voted into law, would protect the NCAA from certain state laws regarding NIL.

The “College Athletes Protection and Compensation Act of 2023” would also provide longer-term medical care for athletes in need. The bill avoids using language that would classify athletes as employees or any other union-able group.

In a joint statement from the Power 5 conferences responding to the announced bill, the SEC, ACC, Big 10, Big 12, and Pac 12 made clear their desire for “a federal standard” for NIL, but the NCAA’s highest leagues did not go as far as to endorse the bill from Blumenthal, Booker, and Moran.

The second bill came from Senator Ted Cruz (R-Texas) and does not yet have a title. In Cruz’s bill, the NCAA would be granted exemption from anti-trust laws and state-specific laws on NIL, the transfer portal, athlete employment status, and/or athlete compensation. However, the NCAA would be completely at the mercy of federal law on the matters.

Cruz’s bill would not allow for athletes to be considered employees of their schools, programs, or the NCAA. Senator Maria Cantwell (D-Washington) has worked with Cruz in the past on potential NIL legislation, but it is unclear if she or anyone else in Congress were part of this bill with Cruz.

The third bill, called the “Protecting Athletes, Schools, and Sports Act” or “Pass Act,” was a bipartisan effort from Senators Tommy Tuberville (R-Alabama; yes, that Tommy Tuberville who coached at Ole Miss, Auburn, Texas Tech, and Cincinnati) and Joe Manchin (D-West Virginia). The bill was put forth in an effort to create “common sense guidelines” for NIL and the transfer portal.

Under this bill, NIL collectives and boosters must register with a program, and any inducements through NIL in recruiting and/or the transfer portal would result in penalties. The transfer portal would also be limited to players who have been in school for at least three seasons, with a few exceptions that would require an NCAA-approved (and government-monitored) waiver.

Contracts would become a requirement in NIL, particularly on the side of those paying the athletes. Financial literacy training would become mandatory for student-athletes, as well, and all graduates would be eligible for long-term sports-related health insurance coverage from their alma mater. Athletes still would be considered non-employees.

According to Nakos, if this bill were to become law, the NCAA could lose its tax-exempt status if it or its member institutions go against the law.

After the Tuberville-Machin bill was finished, the Power 5 conference commissioners released a joint statement applauding “another step forward on the pathway to securing the future of college athletics” but did not give a complete endorsement of the bill.

Even with Congress taking its annual recess in the coming weeks, these bill proposals mean something for the future of NCAA athletics: for better or worse, federal government intervention is coming for college sports, specifically with NIL and the transfer portal.