It’s Your Business

The AP&S Business Law Blog

Rapidly Changing Landscape for College Athletics, and the Need for Stakeholders in Rhode Island to Adapt

Athletic departments and student athletes alike at Rhode Island’s eight National Collegiate Athletic Association (“NCAA”) member schools should begin preparing now—if they haven’t already—for a college athletics landscape in Rhode Island in which student athletes are permitted to benefit from, and be compensated for, their Name, Image and Likeness (“NIL”). The United States Supreme Court’s 2021 decision in NCAA v. Alston, 141 S. Ct. 2141 (2021) and the NCAA’s subsequent changes to its own rules have effectively lifted the longtime prohibition against the NCAA’s athletes benefitting from their NIL. Legislation has been proposed in the Rhode Island General Assembly which, if passed, would expressly permit athletes to benefit from their NIL, meaning that now is the time for all stakeholders to adapt to a vastly different college athletics landscape.

For decades, the NCAA prohibited any sort of compensation, outside of scholarships, to athletes. Based on the Court’s 1984 decision in NCAA v. Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984), the NCAA had broad authority to maintain a “revered tradition of amateurism in college sports.” The NCAA’s position since that time had been that antitrust law permitted the organization to prohibit any compensation for athletes as a means of promoting competitive equity.

This position was challenged over the years. However, it was only in June 2021 with the Court’s decision in Alston that the NCAA’s position was defeated legally. In Alston, the Court decided that certain NCAA rules regarding limitations on educational benefits had an anticompetitive effect. While the decision itself was narrowly written, the NCAA quickly took action of its own. Shortly after Alston, the NCAA adopted a uniform interim policy suspending all NIL rules for current and incoming athletes across all sports and providing several pieces of guidance, including that: “Individuals can engage in NIL activities that are consistent with the law of the state where the school is located.”

Legislation is currently pending in the Rhode Island General Assembly which would provide rules and guidance on the issue of NIL compensation for athletes. On January 22, 2021, Rep. Joseph Solomon introduced House Bill 2021-H5082 “Relating to Education – Compensation for Students Participating in Intercollegiate Athletics.” The bill was passed in the Rhode Island House of Representatives on June 15, 2021, but the Rhode Island State Senate never voted on the bill during the 2021 session. However, the same bill was re-introduced as House Bill 2022-H6673 at the start of the legislative session earlier this month, giving the bill a chance to become law again.

Among its provisions, the bill, as currently drafted, very plainly mandates: “A post secondary educational institution in this state, whether public or private, may not uphold any rule, requirement, standard, or other limitation that prevents a student of that institution from participating in intercollegiate athletics and also earning compensation as a result of the use of the student’s name, image, or likeness. Earning compensation from the use of a student’s name, image, or likeness may not affect the student’s scholarship and eligibility.”

The proposed legislation expressly permits the compensation of student athletes for the use of their NIL, which is also now permitted by the NCAA following Alston and the NCAA’s own rule changes. Notably, if passed, the legislation, would also enact laws related to the representation of student athletes by agents and lawyers, and related to the treatment of athletes’ scholarships as they relate to NIL compensation.

It remains to be seen at what speed the General Assembly will move the bill through the necessary committees and, ultimately, whether the bill will pass. Stakeholders at Rhode Island’s colleges and universities, including athletic departments, athletes, and athletes’ representatives, should use this time to prepare in the event the bill is passed. Expressly permitting athletes to be compensated for their NIL creates an array of potential legal questions and issues, such as contract issues, intellectual property issues, and compliance issues. Allocating resources to address these myriad questions now will allow stakeholders to transition seamlessly if 2022-H6673, or a similar bill, becomes law. Readers are encouraged to contact Patrick Coyne at pcoyne@apslaw.com with any questions on the impact that passage of a bill such as 2022-H6673 could have, and how to best prepare accordingly.

About The Author

Patrick Coyne

Patrick is a member of the firm’s Business & Corporate Law Group. His practice involves commercial finance, commercial real estate transactions,… Read More

Back to Top