Student-Athlete Compensation

5/16/2022

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A growing number of states have passed legislation allowing athletes to receive compensation for their names, images or likenesses. Under these laws, student-athletes could earn money for endorsements, advertising and events such as autograph signings. As of February 18, 2022, 28 states have passed legislation to allow student-athletes to earn compensation. Legislation has passed in 27 states and governors in one state has signed executive orders. However, some states are considering modifications or repealing their NIL laws, due to concerns that existing laws could more restrictive for athletes than NCAA guidelines. On February 3, Alabama became the first state repeal its NIL law. For the latest tracking on state student-athlete compensation, visit this page

State Action

After California passed the Fair Pay to Play Act in late 2019, 40 other states introduced similar bills. The number of enacted bills related to student-athlete compensation has surged in 2021, with 21 states successfully passing legislation. Some states have cited the need to remain relevant for recruiting to explain the swift passage of their bills. At least five other states are currently considering legislation related to student-athlete compensation.

The exact provisions of such legislation vary by state, but enacted bills generally include language to prevent the NCAA, conferences and schools from barring student-athletes from receiving compensation for their names, images or likenesses. Many states also allow athletes to hire agents and require advertising and endorsement deals to be reported to schools. However, other legislation contains unique provisions and different structures for compensation. A proposed bill in South Carolina would create a student-athlete trust fund that would annually provide $5,000 per student to football and basketball players who remain in good academic standing. The funds would be distributed after a student-athlete graduates.

Laws in 14 states—Alabama, Arizona, Connecticut, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, Ohio, Oregon, Pennsylvania, South Carolina, and Texas—will take effect on July 1, 2021.

Federal Action

On June 21, the Supreme Court issued a unanimous opinion that ruled against the NCAA’s ban on education-related benefits for student athletes. While the case, did not directly address compensation for a student’s name, image or likeness, many legal analysts believe the decision opens the door to broader challenges of the NCAA’s argument that collegiate athletes must remain unpaid to preserve a model of amateurism.

The student-athlete compensation issue has also attracted bipartisan attention at the federal level, where several bills have been proposed in Congress. In late April, U.S. Representatives Emanuel Cleaver II (D-Mo.) and Anthony Gonzalez (R-Ohio) reintroduced the Student Athlete Level Playing Field Act, legislation that would establish a federal standard for student-athlete compensation, create congressional oversight and amend federal law to protect the recruiting process.

In February, U.S. Representative Lori Trahan (D-Mass.) and Senator Chris Murphy (D-Conn.) introduced the College Athlete Economic Freedom Act, which would codify the right of college athletes to market the use of their names, images, likenesses and athletic reputations across the country. It would also allow athletes to use collective representation and retain legal representation to fully exercise these rights. And Senator Jerry Moran (R-Kan.) introduced the Amateur Athletes Protection and Compensation Act, which would prohibit the NCAA and member schools from making an athlete ineligible on the basis of receiving compensation. All of these proposals would preempt enacted state laws to allow for student-athlete compensation. Multiple congressional hearings were held in 2020 to examine the issue, and it’s likely Congress will reconsider it later this summer.

Andrew Smalley is a policy analyst in NCSL’s Education Program.

Additional Resources