Federal College Sports Law May Create as Many Problems as It Solves

Courts haven’t been kind to athletic amateurism of late, but the NCAA hopes Congress will reverse that trend—creating a federal statute that could carve out an antitrust exemption for college sports, establish a national standard for NIL and deny college athletes the chance to be recognized as employees.

But federal legislation could also create traps for the association.

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Take NIL. While many bemoan NIL morphing into pay-for-play, with booster-backed collectives paying recruits, a federal NIL statute wouldn’t necessarily cure that problem and might trigger new ones.

For instance, how would a federal NIL statute be enforced? The Federal Trade Commission has been suggested, but the FTC’s track record on enforcing college sports law is deficient. In 2004, President George W. Bush signed the Sports Agent Responsibility and Trust Act (SPARTA) into law. SPARTA makes it illegal for agents to sway college recruits with pay or gifts when doing so jeopardizes their NCAA eligibility. But as a Sportico investigative story revealed, the FTC has not enforced SPARTA, and one former deputy admitted he had “never heard” of it.

A federal NIL statute might also interfere with more than 30 state laws. Even if the wording of a federal NIL statute preempted those laws, it could still run afoul of states’ rights of publicity. The right of publicity generally forbids the commercial use of another person’s identity without their consent and is a crucial area of law for entertainers, actors, musicians, artists and influencers.

There is no federal right of publicity, however, and its scope and duration vary widely by state–a key point for estates of deceased celebrities. A federal NIL statute that doesn’t carefully avoid interaction with each right of publicity law would open the door to confusion about long-standing precedent and doctrine. Litigation would be all but certain.

A federal law that declares college athletes aren’t employees would also invite complications. Would the law say that they aren’t employees under both the Fair Labor Standards Act and National Labor Relations Act, or just one or the other? How about athletes at public universities, for whom employment matters are ordinarily governed by state—not federal—labor law? And how might such a declaration interact with federal immigration laws governing college students and their visas?

A federal antitrust exemption for the NCAA would bring its own set of worries. For starters, if NCAA rules can’t comply with antitrust law—which requires that competing businesses actually compete—why would Congress craft an exemption? Keep in mind, empirical evidence shows that though the NCAA lost the O’Bannon and Alston decisions, the majority of antitrust lawsuits fail.

An antitrust exemption might also become antiquated. The Sports Broadcasting Act of 1961, which exempted NFL, NBA, MLB and NHL national TV contracts from antitrust scrutiny, is now at issue in a federal lawsuit brought by Sunday Ticket subscribers. It’s not clear if the Act applies to cable, paid satellite and other technologies unimaginable in 1961.

The NCAA could have picked a better time to seek such transformative changes, too. The current Congress, with the Senate led by Democrats and the House led by Republicans, is sharply divided. This Congress seems unlikely to yield the kind of legislation that would both thread the proverbial needle and pass and embody such well-crafted language that it would withstand future judicial challenges.

Federal law can also be used in ways unintended by legislators. In Operation Varsity Blues, the Justice Department interpreted a statute governing honest services wire fraud to criminally prosecute parents over their admissions bribes. Congress approved a bill for the statute with corrupt elected officials, not “fake” high school athletes, in mind. However, a lack of limiting language enabled a much wider scope of prosecutions.

Chances are Congress won’t bother with helping the NCAA, but if it does, expect years of litigation and debate on whatever passes.

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