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With System Out of Balance, It’s Time to Revisit College NIL Laws

Michael H. LeRoy
·3 min read

A year ago, state NIL laws achieved overdue progress for college athletes. Then the Supreme Court shut out the NCAA in a 9-0 antitrust decision, shattering the amateur athlete model. By mid-summer, 25 states had passed an NIL law. From January 2020 through July 2021, I analyzed each law, assigning them points based on the number of pay restrictions.

I was surprised by the variance in scores. New Mexico had the most permissive law, with four pay restriction points. My home state of Illinois had the most restrictions, an astounding 45 points. Mississippi (29 points), and Arkansas and Alabama (each with 28 points) were near the top in NIL restrictions.

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Many NIL laws advance a reasonable institutional interest. However, two provisions raise possible antitrust concerns in the NIL laws of Illinois and Mississippi: They authorize schools to be paid market value as a condition for approving an athlete’s use of school marks and logos, and they bar athletes from suing schools for unfair competition and business torts in NIL deals.

In 2020, I assumed that any state NIL law was better than none for athletes. But my thinking changed with two years of research. First, I did not anticipate the total demise of the amateur model. Second, I never imagined the NCAA would issue its own NIL policy. Third, I could not foresee that by July 1, 2021, half the states would have an NIL law, half would not, and the NCAA’s new policy would undercut the advances for athletes in state laws.

I adjusted my thinking. I became a skeptic of state NIL laws, viewing the higher scoring states as burdensome for schools. I concluded that California—the first state to pass an NIL law in 2019—had it right, with eight basic pay restriction points. That law struck a good balance in protecting a school’s interests while maximizing player NIL opportunities, all within a familiar NCAA rule structure.

This left my state, Illinois, with more than five times the number of pay restrictions imposed by California. I saw warning signs of antitrust problems. Data from seven Illinois D-I schools for advertising, sponsorships and royalties were sluggish for three years (2016-2019). This was a market in which athletes would potentially compete with their schools. A news report quoted Sean Frazier, the Northern Illinois University athletic director, who said that fellow ADs in the state met together to discuss NIL legislation. Three former Illinois and Northwestern athletes—now lawmakers—guided an NIL bill through the General Assembly. They sincerely thought they were helping athletes—and they did help athletes—but nothing like 24 other states. Ironically, these lawmakers began with California’s bill in 2019, but the measure died in committee.

Two years into my research, I have concluded that state NIL laws are destabilizing college athletics. For the welfare of college sports, state lawmakers should pass laws—or amend existing laws—to mimic California. Otherwise, D-I schools will lose competitive balance and at the far extremes, face potential antitrust enforcement.

Michael H. LeRoy, a professor at the University of Illinois, has published multiple law review articles on college sports, as well as the book, Collective Bargaining in Sports & Entertainment: Professional Skills and Business Strategies.