New federal bill aims to put guardrails around ‘pay for play’ collegiate athletics

The new “pay for play” era in college athletics has the NCAA and college administrators across the country struggling to find rules and regulations that work for everyone. Congress is now stepping into the fray with legislation that could help set some of the framework.

What is the purpose of the bill introduced?

The effort by a bipartisan group in the House of Representatives comes on the heels of the $2.78 billion settlement approved by a judge on June 6. The House v. NCAA case opened the door for schools to pay athletes directly. Each school has a $20.5 million pool to use for the payments. 

The main goal of the bill is to set standards for name, image and likeness payments to athletes. It would preempt any state laws already on the books while giving the NCAA antitrust protections. 

“As the mom of a DI athlete, I’ve seen firsthand how important — and how long overdue — it was to allow our student-athletes to earn their fair share,” Rep. Janelle Bynum, D-Ore., said. “The NIL marketplace in college sports is currently operating like the Wild Wild West. This legislation takes important steps towards adding guardrails that guarantee that all student-athletes can earn fair compensation.”

What part of the bill affects students?

The bill would also ban schools from using student fees to pay for athletic programs. A big hit to schools hoping to use those fees to generate the $20.5 million.

Iowa State University athletic director Jamie Pollard has a reserve fund his department is using to pay players for the next couple of years. He’s not sure what the school will do after that. Clemson announced it would implement a $150 “athletic fee” for students each semester starting this fall. Fresno State has added $495 in fees per year to each student’s tuition, about half of which will go toward athletics.  

“What would you feel as a fellow student if Iowa State did what Virginia Tech just did?” Pollard said on the “Spotlight with Elijah Moore” YouTube channel. “Virginia Tech implemented a student fee that’s generating close to $20 million a year, and they’re going to use that fee to pay their student athletes.”

How are collectives being regulated?

Pollard and other administrators will not have that option if the new bill becomes law. They may also have a tougher time working with outside collectives. In the four years before the House v. NCAA settlement, collectives, driven by boosters, were how student athletes were paid NIL money. 

The newly formed College Sports Commission issued guidelines Thursday, July 10, to regulate all third-party NIL deals. Coaches like TCU’s Sonny Dykes are glad players are being compensated but he’s hoping everyone plays by the rules. That, he says, would produce an even playing field and some parity in the sport.  

“The only way that you can do that is by having revenue sharing, which we finally have but then also controlling the NIL money that is made on top of that,” Dykes said. “So, my hope is that they do that. My hope is that that system is developed at a very high level, operates at a high level, and punishes people that need to be punished.”

Is the College Sports Commission rejecting NIL deals?

Deals are already being rejected by the commission’s clearinghouse, NIL Go, because they do not meet the two biggest requirements. Those are that the deals are for a “valid business purpose” and within a fair-market “range of compensation.” This prevents an athlete from simply making a public appearance on behalf of his or her school and being paid for it.

“My hope is that we’ll continue to develop those systems and those systems will be able to have some teeth and we’ll be able to do what they need to do to help govern the game and make it even better than it is,” Dykes said. 

The commission has not said how many deals have been rejected but did say more than 1,500 deals have been cleared by NIL Go since June 11, “ranging in value from three figures to seven figures.”

In a statement Thursday, the Collective Association pushed back, saying, “Any attempt to delegitimize the role collectives play in today’s collegiate athletics landscape ignores both legal precedent and economic reality.”