Pay-for-Play(ers): Missouri's Recent NIL Amendment Is a Solid Blueprint for Federal NIL Regulation.

• Author: Kraft, Tyler

1. INTRODUCTION

   The issues facing the national name, image, and likeness ("NIL") debate came to a head on January 17, 2023. (1) On that day, Jaden Rashada--the No. 27 rated high school football recruit in the country--decommitted from Florida when a $13 million NIL deal failed to materialize as promised. (2) The story prompted questions about how schools handle NIL initiatives, the amounts of money thrown at collegiate athletes, and the business model at large for college athletics. (3) It also reveals the challenges states face as they attempt to develop regulatory frameworks for NIL.

   In May 2022, Missouri lawmakers amended the state's NIL law less than a year after its enactment. (4) The amendment was sparked by the rapidly evolving national landscape regarding collegiate student-athletes' rights to monetize their NIL. (5) State NIL laws came to the forefront following the United States Supreme Court's ruling in NCAA v. Alston in 2021, which struck down certain limits on student-athlete compensation. (6) The aftermath of the decision saw states throwing together their own laws to allow student-athletes to monetize their NIL given the National Collegiate Athletic Association's ("NCAA") newfound lack of authority. (7) However, state laws quickly devolved into a race to deregulate student-athletes' NIL rights, as states viewed less restrictive measures as a means to attract more talented players. (8)

   Missouri was no different. State legislators determined Missouri's law needed to evolve for its schools to remain competitive in attracting top student athletes. (9) Many lawmakers view the 2022 amendment, which added several provisions relating to NIL-related school activities and financial literacy requirements, as necessary to keep Missouri "on par" with other states. (10) Yet, the Missouri law's place on the cutting edge of NIL regulation is likely short-lived, as other states seek to win the deregulation race and a potential federal preemption looms large. (11) In fact, the latter option appears to be a near certainty, with bipartisan support of a potential bill already present. (12) one question, however, still remains: what should such a uniform law look like given the current lack of common ground among state NIL legislation? (13) This Note explores the answer to this question and provides a blueprint for the imminent federal law.

   Part II of this Note describes the historical backdrop of NCAA v. Alston, the Court's decision to allow student-athletes to monetize their NIL, and the state measures implemented following this monumental decision. Part III discusses Missouri's recent amendment, including its changes to school involvement in the NIL process and its introduction of financial literacy courses for student-athletes. (14) Part IV analyzes the Missouri law's place in the national NIL landscape, specifically as it relates to the balance between student-athlete rights and encouragement of a level playing field. Finally, it argues that federal legislation is necessary for NIL uniformity and proposes that such a law should follow Missouri's lead--as Missouri's most recent amendment strikes the perfect balance between competition and student-athlete protection.

2. LEGAL BACKGROUND

   To properly understand the modern landscape of NIL laws, it is necessary to examine the circumstances from which they arose. While NIL may appear new, it is not the first time student-athletes have earned compensation for their services. (15) This Part examines why student-athletes were barred from compensation for a large portion of collegiate athletics' history, why the prohibition was ultimately struck down, and the national response to student-athletes' new rights.

   1. Historical Background of Compensation for Student-Athletes

      Intercollegiate athletics began over 170 years ago, with the first formal interschool athletic competitions beginning in the 1850s. (16) College athletics continued to grow over the course of the nineteenth century, with top athletes eventually afforded the ability to earn compensation for their services. (17) For example, a football player chose to attend Yale after the school promised free meals and tuition, a trip to Cuba, the exclusive right to sell scorecards at his games, and a job as a cigarette agent. (18) During this time, university administrators realized the commercial value of high-profile collegiate athletics. (19) Strong athletics programs also increased economic support and student enrollment at their respective schools. (20) At times, the pursuit of athletic victory led universities to pay non-student-athletes to play for their teams. (21) Due to fractures within the collegiate administrative community regarding the role of college athletics, efforts began in the 1890s to establish standardized rules and potential athletic conferences under which collegiate athletic programs could function. (22)

      The tipping point came in 1905, a year in which there were over one hundred football injuries and eighteen football-related deaths. (23) Then-President Theodore Roosevelt held several national meetings with university officials, which eventually led to the creation of the NCAA in 1906. (24) The organization was founded to eliminate "unsavory violence" and "preserve amateurism." (25) More specifically, the NCAA declared that "[n]o student shall represent a College or University in any intercollegiate game or contest who is paid or receives, directly or indirectly, any money, or financial concession." (26)

      Still, the NCAA's formation did not initially deter universities from paying student-athletes. (27) As the NCAA was preoccupied with developing standardized rules, a majority of NCAA member universities continued to compensate student-athletes. (28) These payment schemes were not particularly secretive. In fact, freshmen football players at the University of Pittsburgh went on strike in 1939 to demand payment equal to upperclassmen players. (29) In 1948, the NCAA adopted the "Sanity Code," reaffirming its opposition to student-athlete compensation. (30) The code allowed colleges and universities to pay for a student's tuition but also granted authority to the NCAA to suspend or expel offenders of the noncompensation requirement. (31) Relying on this power, the NCAA penalized several university athletic programs for providing improper benefits to student-athletes. (32)

      At the same time, the Supreme Court of the United States has consistently expressed hesitation about the NCAA's rule over college athletics and the extent of its regulatory scope. (33) In NCAA v. Board of Regents, for example, the Court limited the NCAA's ability to oversee deals for college football television rights, holding that the NCAA's oversight violated antitrust law. (34) The NCAA had limited member schools' abilities to negotiate their own television rights, (35) which, according to the Court, created a horizontal restraint on competition. (36) In other words, schools were forced to agree not to compete with each other. (37) These restrictions, the Court stated, were "not consistent with [the] fundamental goal of antitrust law" and therefore violated the Sherman Act. (38) Thus, the Court struck down the NCAA's restrictions on television rights and opened the door for individual schools to negotiate their own television contracts. (39) These television deals helped grow the scale of college athletics, which has now turned into a multi-billion-dollar enterprise for participating schools each year. (40) This holding set the stage for the Court's ruling in NCAA v. Alston.

      In a unanimous 9-0 ruling, the Alston Court upheld a decision that struck down the NCAA's cap on student-athlete benefits. (41) Importantly, the Court took special note of the value student-athletes bring to their universities. (42) As the Court pointed out, collegiate athletes bring in billions of dollars for their schools and conferences. (43) The lack of compensation compared to the overwhelming value is particularly troublesome, especially where the administrators of these sports have annual salaries worth millions of dollars. (44)

      In deciding the case, the Court again looked to antitrust principles. (45) In observing the NCAA's limitations on payments to student-athletes, the Court considered whether the rules in place were overly restrictive given the goals they were meant to achieve. (46) If the rules were too restrictive, they would flunk the "rule of reason" analysis used to determine if regulations rose to the level of anticompetitive practices the Sherman Act prohibits. (47) The Court concluded the restraints were "inexplicably stricter than necessary," putting them in contravention of the Sherman Act. (48)

      Throughout its opinion, the Court emphasized the changes in market realities since its past decisions involving the NCAA. (49) While the majority did not do away entirely with the NCAA's power to police certain benefits for student-athletes, it noted that the NCAA never sought an understanding of which benefits it could enforce. (50) Justice Brett Kavanaugh, however, indicated a willingness to further evaluate claims relating to the NCAA's restrictions on student-athlete payment. (51) In the immediate aftermath of the decision, the NCAA created an interim policy allowing student-athletes to earn compensation based on their name, image, and likeness according to state law. (52)

   2. State Law Interpretations of Name, Image, and Likeness Law

      Since Alston, twenty-nine states have started enforcing NIL laws, one state (Maryland) has codified an NIL law that has yet to take effect, and twenty states have not yet enacted an NIL law or something similar. (53)

      Student-athletes in states without an active NIL law still have a right to engage in NIL activities without NCAA interference. (54) In these situations, schools may develop their own individual policies regarding how and when student-athletes can engage in NIL compensation activities...