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College athletes would need school approval for NIL deals under bill passed by Utah Legislature

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LA Post: College athletes would need school approval for NIL deals under bill passed by Utah Legislature
AP
HANNAH SCHOENBAUM
March 01, 2024

SALT LAKE CITY (AP) — College athletes in Utah who are looking to profit off their name, image and likeness will have to seek written approval from their schools for any business deal exceeding $600 under a bill that received final legislative approval in the state Senate on Friday.

The policy giving Utah universities more control over student-athletes' marketing partnerships, known as NIL deals, passed by a 21-7 vote on the final day of the 2024 legislative session after the House approved it last month with little opposition.

Under the measure, universities will be required to provide written acknowledgment on whether an NIL deal conflicts with the school’s policies or the standards outlined in the bill.

Student-athletes will be prohibited from promoting alcohol, marijuana, controlled substances or tobacco products such as e-cigarettes and vapes. Gambling and sports-betting are off-limits too, as are “sexually oriented” businesses that pay employees for full or partial nudity. Athletes cannot promote any firearm that they cannot legally possess.

The new requirements will take effect May 1 if Republican Gov. Spencer Cox signs the bill.

Before this year, Utah stayed on the sidelines while more 30 states passed legislation regulating NIL deals in light of a 2021 decision by the National Collegiate Athletics Association to lift its ban on student-athletes cashing in on their celebrity. Several of those states have since clashed in court with the NCAA over who has the authority to regulate those deals.

Rep. Jordan Teuscher, a South Jordan Republican and the bill's primary sponsor, said it's time for Utah lawmakers to jump into legislating what he called “the wild, wild West” of student-athlete endorsements.

While the policy brings Utah in line with an NCAA requirement that athletes inform their schools of large NIL deals, it goes a step beyond by requiring schools to sign off on those agreements. Opponents have argued that because NIL deals are between the student and a third party, neither the university nor the state should have a say in them.

The high value of some local NIL deals in came into view in December 2023 when University of Utah basketball players and gymnasts began pulling up to class in flashy new Jeeps and RAM trucks that sell for over $40,000. The students had been offered leased vehicles through an NIL deal with a company called the Crimson Collective.

Henrie Walton, an administrator at Utah Tech University who addressed the Legislature on behalf of the state’s universities, said the institutions are “comfortable” with the bill.

Teuscher's Senate co-sponsor, Republican Sen. Chris Wilson of Logan, said Friday before the vote that a provision making NIL deals no longer a matter of public record would protect Utah schools' ability to compete in recruiting. As a business owner who has negotiated many NIL contracts, Wilson said entities may be less inclined to enter into such contracts if they are public.

“These contracts are private contracts between my business and the student-athletes. They were negotiated between the two of us,” Wilson said. “If we do not support this, I'm concerned that NIL contracts being public would be a huge disadvantage to our universities.”

Critics of the bill say the public records exemption would undercut transparency and regulatory efforts. The legislation would undo a ruling by the State Records Committee that said NIL contracts become public records once they’re shared with a university.

“If government is going to get in the business of regulating these private agreements, the public has an interest in making sure that they’re performing that regulatory function,” said Jeff Hunt of the Utah Media Coalition, a consortium of news outlets.

Another opponent, Sen. Kathleen Riebe, a Cottonwood Heights Democrat who voted against the measure Friday, has expressed reluctance to restrict student-athletes' ability to benefit from their achievements after state universities have profited off them for years.

Earlier Friday, NCAA President Charlie Baker said the organization's board instructed its enforcement staff to halt all investigations into booster-backed collectives or other third parties making NIL deals with Division I athletes.

The move comes a week after the NCAA lost another legal battle in which a federal judge in Tennessee temporarily barred it from enforcing a rule prohibiting third parties from paying recruits to attend a particular school.

New NCAA policies approved in January encourage athletes to report all NIL deals so the organization can build its own database, which it says will improve transparency while helping students make informed decisions.

The NCAA, which represents some 1,100 schools and more than 500,000 athletes, also wants to compile a registry of agents and companies that work with student-athletes to better protect them from predatory business practices.

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