Newsletter, Image, Likeness Vol. 37: So, About That Race To The Bottom..

The Weekly Longer NIL Thought.

"If states will not enforce the laws and states are going to prohibit the NCAA or conferences from enforcing these reasonable policies, Congressional action is then the only way to provide a national uniform standard."

Ok, take a guess. Who said it?

If you guessed Southeastern Conference commissioner Greg Sankey, then you win the prize of knowing that you are paying a lot of attention to the NIL space.

Sankey uttered the above this week as he and the conference that he represents continues to request Congress to intervene on NIL and pass one of many bills that have been proposed at the federal level, the newest one being a bipartisan bill that is at the discussion draft stage, authored by Republican Senator Jerry Moran and Democratic Senators Richard Blumenthal and Cory Booker. More on that later.

Anyhow, it's an odd take.

How do we know that states will not enforce the laws? Isn't nonenforcement sort of what he and the NCAA want at this juncture, given that new laws in Arkansas, Oklahoma, Texas, and Missouri (I don't know of any schools in New York potentially becoming a part of the SEC) all intend to prohibit investigations and punishments of schools that violate the NCAA's NIL rules?

Maybe a national uniform standard is preferable. The problem is that so many different "standards" have been pushed by various lawmakers at the federal level and none of them appear to have the best interests of the actual athletes in mind and/or have any realistic potential of being passed.

I'd rather have no national uniform standard than one that merely protects the NCAA from itself.

Sankey also said that this is a "non-partisan" issue. He sounds a little bit like me in this instance. I have been saying over and over that, when states were mustering up the courage to go head-to-head with the NCAA and pass bills stating that NCAA prohibitions on NIL were not welcome within their borders, that it was a non-partisan or, alternatively, a bi-partisan issue. Red and blue states were on board. Yet, Congress hasn't been able to follow the course of individual states. Why? Because the NCAA is directing Congress unlike what occurred on a state-by-state basis and what continues to occur at the state level, now with states becoming even more aggressive in telling the NCAA to get lost.

Where Sankey does not sound like me is in the next soundbite: "Our student-athletes deserve something better than a patchwork of state laws that support their NIL activity, if support is the right word. Our student-athletes deserve better than a race to the bottom at the state legislature level."

A race to the bottom? For whom? And how are athletes suffering based on differing state laws? From what I've seen, these state laws are preferable to many of the federal proposals, which would, in effect, restrict athletes' abilities to fully monetize their fame.

As my friend Dan Murphy tweeted, "There's some rhetorical slight-of-hand happening when Sankey or NCAA prez Charlie Baker talk about protecting athletes and avoiding a 'race to the bottom in college sports." As Murphy stated, "'The bottom' that Sankey talks about is professionalization. Maybe that's bad for some reasons (probably not, but maybe). But it definitely doesn't exacerbate the problems they cite like athletes being vulnerable to bad actors/ recruiting chaos. Professionalization solves those."

Sankey and other conference commissioners understand that, right? We can't just have a ton of naive people at the top of college sports, right? They just think Congress and the rest of us are dumb, right?

The SEC Is Losing Faith In The NCAA.

Andy Wittry of On3 was able to obtain documents related to the SEC's lobbying efforts from June when the conference traveled to Washington D.C.

One document says, "The NCAA cannot fix this, only Congress can fix this . . . The NCAA has not shown the ability to effectively regulate NIL activities or enforce its rules prohibiting booster involvement in recruiting or inducements or pay-for-play."

It shows a lack of faith in the NCAA by one of the largest conferences in the country.

So What Is Congress Up To Now?

As mentioned before, Senators Moran, Blumenthal, and Booker have partnered on a forthcoming NIL bill, and many journalists received the scoop on what that bill will entail.

From my friend Ross Dellenger's article, the bill intends to do the following:

• Preempt "most if not all" state NIL laws.
• Creates the College Athletics Corporation to serve as a clearinghouse, which will also create specific policies and regulate/certify agents as well as possess subpoena power.
• Give the NCAA authority to create rules to enforce provisions of the Act "while affording the association a degree of legal protection."
• Give athletes lifetime scholarships.
• Provide athletes with long-term medical coverage through their schools and an established medical trust.
• Allows schools to restrict athletes from entering into deals contrary to their code of conduct for "moral reasons."
• Prohibit inducements for recruitment and retention of athletes.
• Require that athletes report NIL deals to schools within seven days of entering into them and recruits also must disclose current and expired contracts before enrollment
• Restricts against those disclosed contracts being subject to open-records laws at the federal and state level.
• Permits underclassmen to enter into a pro draft and retain eligibility if they return to school within 7 days of the draft ending and don't receive compensation from a sports league, team, or agent.

As Dellenger wrote (and I agree), the legislation has a steep hill to climb for passage. I wouldn't count on it. That said, Senator Moran, during a call on July 19, stated, "Our goal has been a product that could get 60 votes in the United States Senate, and we believe we are close to reaching that goal." So, I suppose anything is possible.

The 50-page bill is embedded within Dellenger's article. It is silent as far as the employment status of college athletes as well as whether the NCAA should be provided an antitrust exemption, which it has been begging for. Also, there is no discussion about revenue sharing for athletes, which Senator Blumenthal said was dropped so that Democrats could get Republican support for the bill.

This Could Have Been Interesting.

Apparently, Tennessee's Attorney General threatened to sue the NCAA if the Association gave the Volunteers football program a bowl ban. He basically said it would have abridged athletes' NIL rights.

From the letter: "Prohibiting all student-athletes on the UT football team from participating in bowl games interferes with athletes' ability to earn compensation and to participate in intercollegiate athletic events and thereby violates Tennessee law."

I don't know if this influences the NCAA's decision, and I wonder whether this takes bowl bans off the table for the foreseeable future.

ASU Football Coach Says NIL Is Now 80% Of Recruiting.

But Kenny Dillingham doesn't seem to care that NIL is becoming so important. He said he hopes that the players who choose to go to ASU get paid more than anywhere else in the country. He wants to reward people with NIL who want to be at ASU. He's publicly asked for businesses to support his players and to activate the community. I'm now a big Dillingham fan.

Husker Volleyball Gets Huge Infusion Of Cash.

The 1890 Initiative, an NIL collective supporting Nebraska athletes, has signed a 10-year, $5 million partnership with the Nebraska Crossing outdoor lifestyle center and JUSTDATA, which is just a massive deal, particularly given the monies will be earmarked for Nebraska volleyball players.

Mattress Mack Finds More Money Under The Blanket.

Jim McIngvale, better known as "Matress Mack," is sending another $1 million to the Houston basketball team within the scope of an NIL deal. He previously pledged 7-figures to Houston basketball players, in 2022. The campaign will take place when the team is in Australia so even foreign-born players in the U.S. on F-1 visas can participate.

Does Lane Kiffin Have A Point?

Athletes are in an unprecedented position when it comes to NIL, and it will be interesting to see whether this structure, with the transfer portal, sticks.

"I’m like they’ll probably eventually fix this, so you will be [in] this one window of a couple years where you literally can leverage your program every window or you can go into free agency and find the most money out there," said Kiffin. "And now we’re seeing you really get paid three times if you want to. You can get paid coming out of high school. You can one-time transfer, go in, get the most money, get paid again and then you can grad transfer and get paid again. So, eventually you’re not going to be able to do that, I don’t think, and have that leverage basically every semester to do that. So, I’ve told them, it’s an awesome time for them."

We shall see if the "eventually you're not going to be able to do that" theory is correct.

My Thoughts On The NCAA, Et Al. Focusing On The Wrong Issues.

I shared the following on my Twitter account this week as well as on a post on my LinkedIn page:

College administrators and the NCAA spend so much time complaining about the lack of uniformity surrounding state NIL laws and the need for Congressional action, while ignoring the elephant in the room.

The real problem isn’t states having differing laws.

It’s not some of those laws preventing the NCAA from investigating or punishing schools in those states.

It’s not even outright inducements or offers of pay-for-play.

Instead, it’s athletes being exploited by unscrupulous agents and brands that believe they can take advantage of unrepresented individuals.

Many athletes don’t have the resources to pay for competent legal counsel and it’s often impractical for an athlete to seek such counsel on a small scale deal that could have major consequences.

This line from a recent Bloomberg Law article is very relevant: “Bloomberg Law obtained two contracts that expose the vulnerabilities of students to NIL deals. One shows a company taking a potentially exorbitant 40% commission; the other fails to define who would own the athlete’s intellectual-property rights, even after they graduate.”

An agent should never be taking a 40% commission on a deal. The industry standard is 20% and athletes with leverage can sometimes negotiate that amount down.

Intellectual property rights are extremely important, and athletes should beware of terms like: irrevocable, perpetual, and permanent.

If those at the NCAA, conference commissioners, and athletic directors truly cared about the welfare of college athletes, they would cease the rhetoric that there is a “race to the bottom at the state legislature level” and instead focus on how to improve the status and power of the individual athlete by arming him/her with the guidance, advice and counsel that is so desperately needed.

Amazon Taps 2 LSU Basketball Stars For New Campaign.

Angel Reese and Flau'jae Johnson appear in a new Amazon campaign called, "Dormz," which will be promoted across multiple platforms.

ESM Put Together A Group Of Strong Athlete's The Rock's ZOA Energy Drink.

And ESM Handled Another Deal Between Marvin Harrison Jr. With Dr Teal's.

The Ohio State receiver will promote the pure Epsom salt brand across his social media platforms and it is a season-long partnership.

Livvy Dunne Strikes Deal With Energy Drink.

Final Thoughts.

That is it for Vol. 37 of Newsletter, Image, Likeness. Thanks to the more than 6,800 people who have subscribed to this newsletter thus far, and please feel free to share this free resource with others on LinkedIn or elsewhere.

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