Analyzing Michigan House Bill No. 5217 - Another College Athlete Name, Image, & Likeness Proposal

Last week, Representatives Brandt Iden (R-Oshtemo) and Joe Tate (D-Detroit) presented bipartisan legislation that would allow college athletes to be compensated for their name, image, and likeness under certain circumstances in the State of Michigan. So, let’s get to dissecting this sucker and perform a legal analysis!

Analyzing Michigan House Bill No. 5217 - Another College Athlete Name, Image, & Likeness Proposal
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Last week, Representatives Brandt Iden (R-Oshtemo) and Joe Tate (D-Detroit) presented bipartisan legislation that would allow college athletes to be compensated for their name, image, and likeness under certain circumstances in the State of Michigan.

So, let’s get to dissecting this sucker and perform a legal analysis!

Read House Bill No. 5217

House Bill No. 5217 Section-by-Section

 

Intro

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The bill’s introduction is very brief and summarizes the legislative purpose main points using the particular phrases defined in the bill. Notably, this bill uses the phrase “college athlete” rather than the NCAA-preferred term “student-athlete” seen in some other states’ bills like New York and California (but consistency with its current legislation, the Student Athlete Bill of Rights, may have affected California’s language choice). What effect does this difference have on the bill’s application? No matter what the current or any potential future definition of “student-athlete” exists in intercollegiate sports, this bill would apply for all college athletes. The difference may be minimal, but it could make a big difference in the long run. Also, it helps move past the archaic notion of how a “student-athlete” is currently defined as a progressive statement.

 

Section 1

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The first thing I notice here is that there is an expressed definition for “postsecondary educational institution,” which is important so that we know which institutions fall under the bill’s reach. This bill includes both public and private institutions offering a degree or course of study beyond twelfth grade in its definition of “postsecondary educational institution”. So, as its currently written, House Bill No. 5217 captures community colleges that offer associate’s degrees, any vocational school, any college or university that is an NCAA member institution, and any college or university that is a member of the National Association of Intercollegiate Athletics (NAIA). The NAIA changed its amateur status rules in 2014 to allow its college athletes to be compensated for “use of their picture or for a public or media appearance if no reference is made to the student’s collegiate institution or participation in intercollegiate athletics” without fear of losing eligibility,” but as we will see later in this piece of legislation, the name, image, and likeness compensation would expand NAIA athletes’ rights as well.

Furthermore, Michigan does not have a bill that parallels California’s Student Athletes Bill of Rights. Therefore, Michigan legislators have nothing stopping them from expanding the scope of its “postsecondary educational institution” definition as much as it deems equitable. For comparison, California already required that “intercollegiate athletic programs at 4-year private universities or campuses of the University of California or the California State University that receive, as an average, $10,000,000 or more in annual revenue derived from media rights for intercollegiate athletics to comply with prescribed requirements relating to student athlete rights,” and Senate Bill 206 expands its reach beyond that to include almost all California postsecondary educational institutions, but it excludes community colleges.

The very last sentence in Section 1 mirrors almost ver batim other bills, prohibiting NIL compensation from being a basis for modifying or losing college athlete eligibility status.

 

Section 2

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In drafting legislation, authors have to make a decision whether to use express or implied language. Here, I believe individually identifying the NCAA is a smart move because it removes any potential confusion as to one expressed organization, and preceding the expressed organization with “including, but not limited to” gives a reasonable picture of the types of authoritative organizations this bill speaks to directly. Also, not to jump to any conclusions, but this phrasing prospectively can apply to any organization that may exist in the future, not just the current NCAA and its member institution conference structcure. For instance, this would apply to the Historical Basketball League, which identifies itself as “[t]he First College Basketball League To Enable Athletes To Directly Benefit From Their Talent, Marketability, and Hard Work By Offering An Education and Compensation.” It will make its debut in June 2021 after House Bill No. 5217 could be enacted, but even so, this bill would pose no issue for the HBL because its whole raison d’etre is to fairly treat its basketball players and allow them to seek compensation.

Subsections (a) and (b) cover two distinct matters: (a) what cannot happen to the student when they receive compensation for their own NIL or athletic reputation (which is a phrase I absolutely love); and (b) what cannot happen to the institution when the student uses their own NIL or athletic reputation. Both are critical pieces in order to protect the athletes individually & their schools from the conference’s or NCAA’s (or future organization’s) iron fist.

 

Section 3

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Section 3 is all about what these schools and athletic organizations cannot do, and these two things are biggies. First, they cannot give prospective college athletes compensation for their NIL or athletic reputation. Thus, this would apply until the athlete is no longer a prospect, i.e., the athlete committed in whatever fashion is fully sufficient at the time (e.g., a signed National Letter of Intent is sufficient for Division I and II whereas a verbal commitment is not). This, in theory, would prohibit schools from tempting or bribing star recruits into choosing to come play for them.

The important key here is the focus on prospective college athlete. This bill does NOT prohibit schools and athletic organizations from compensating college athletes - once committed to playing sports for a postsecondary institution and officially a college athlete - for their name, image, and likeness or athletic reputation.

Next, this section prohibits schools and athletic institutions from interfering with college athletes residing in Michigan who want to obtain professional representation related to contracts or legal matters. Contracts is a general term covering a broad area that the average person may not appear to rise to the level of legal matters, but trust me, every contract entered into is a legal matter. Again, we see the “including, but not limited to” language that gives us an idea of what the legislative intent is behind this section, and the fact that it expressly states college athletes may hire “athlete agents”, which would cause a college athlete to lose NCAA eligibility altogether under current rules, is huge. (NCAA rules do allow them to have legal representation in certain circumstances to counsel and coach them, but the athlete is still their own primary advocate in front of the NCAA itself.)

I would revise this section slightly. This representation factor in Section 3(b) has popped up in other states’ legislation, generally, but relative to others, it is a bit brief here and does not really try to accomodate for the oppositions’ alleged argument. First, it does not define what an “athlete agent” is, exactly, which creates two problems. It presents the possibility that a college athlete could be represented by someone who is not licensed in some respect since the NCAA marginally altered its restrictions and added requirements for basketball players’ agents only, and, more importantly, because Michigan’s current definition of “athlete agent” would conflict! Under Michigan law, “athlete agent” means “a person who, directly or indirectly, recruits or solicits a person to enter into an agent contract or professional sport services contract, or who procures, offers, promises, or attempts to obtain employment for a person with a professional sport team or as a professional athlete. Athlete agent does not include a member of a person's immediate family.” [emphasis added] I applaud Rep. Tate for his sponsored bill that repeals this section! Nevertheless, there still should be something more to explain the type of person who qualifies as an agent for professional representation here in this bill.

Second, “legal representation provided by an attorney” may infer that the attorney is licensed to practice law. Ethically speaking, the attorney would likely be licensed in the State of Michigan or could get licensed through reciprocity, but that may not necessarily be the case.

This section could largely benefit from briefly explaining in more detail who may provide professional representation with phrases such as “provided by an attorney licensed by the state” and “athlete agent who complies with state and federal law in their relationship with the college athlete.”

 

Section 4

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As my boyfriend Bryan would say, “This is fine.” It covers whathever may constitute grant-in-aid from the institution under the NCAA rules currently and moving forward and also whathever stipends or other scholarships that do not total to a full athletic scholarship for an entire college athletics career. Moreover, it expressly acknowledges that money received from the institution is NOT compensation for use of college athletes’ NIL. Why is this important? Before coming to college, college athletes sign away their right to use their NIL for compensation when they sign their National Letter of Intent to receive an athletic scholarship for attending that school and playing said sport for that school. This would legislate away any attempted argument that the NCAA or any institution in Michigan to squeak in about the scholarship being a reasonable part of the quid-pro-quo for their NIL in the market. After all, an athletic scholarship plus any stipend is about being a “student-athlete” and covers educational costs, right? *insert major side eye*

In my opinion, I would add something to protect those college athletes who initially walk on to a team and receive an athletic scholarship later in their college career as well as high school athletes who have not had their “amateur status” cleared yet. Some of those college athletes begin building value around their NIL and athletic reputation before they receive an athletic scholarship but while they are playing college sports. Technically, the only thing holding this class of college athletes back from utilizing their right of publicity (i.e., the fancy intellectual property legal term for these NIL rights) are the NCAA Bylaws. What if they do something violative during that time and do not get caught until they try to get the athletic scholarship? It is inevitable that some athletes will receive compensation for their NIL. It is a question of whether they get caught, and if so, when they get caught.

Some highly rated high school athletes may do something under the radar to make money off their NIL, too, like sign autographs for a price or endorse a service or product for an under-the-table payment. Michigan High School Athletic Association (MHSAA) Handbook Section 11 covers “Amateur Status/Awards” and states once a student has represented any MHSAA member school in any of its tournament sports, they lose eligibility if they “received gifts of material or money and have not received other valuable considerations, including special considerations for loans, because of athletic performance or potential.” Included in this broad violation are appearing in advertisements promoting commercial enterprises or businesses and posing in the school’s athletic uniform for a non-school commercial enterprise (whether non-profit or for-profit), even if they are not paid! If you read between the lines in the MHSAA Handbook, there is no broad provision making it a violation for a high school athlete to use their name, image, or likeness for commercial gain paralleling what is expressed in the NCAA Bylaws and policies. So, if a student who played a sport for a MHSAA member school signed autographs or never signed a contract (e.g., entered into a verbal agreement) to conveniently wear or use and tag a product brand in his Instagram feed or stories for a stipend after purchasing the product themselves, in theory, that student may not necessarily be violating the MHSAA interpretations on amateur status but, indeed, would likely not pass the NCAA’s current athletic amateur eligibility status clearance. What if the athlete was flagged sometime during the amateur status clearance procedures and was denied because of it?

Therefore, a provision expressing that institutions shall not use a student earning compensation for their NIL as a basis for denying amateur status clearance and, thus, an athletic grant-in-aid or stipend scholarship application would enhance this bill to better protect the various types of situations prospective athletic scholarship-receiving college athletes may be in.

 

Section 5

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Here, we see what the schools (in subsection 1) and the associations and organizations (in subsections 1 and 2) cannot do when the athlete gets professional representation for contracts and the like in a pretty straightforward manner, aside from my earlier critiques, which mirrors Section 2.

 

Will this bill pass as-is? I like that it does not expressly limit the athletes’ market to third parties, which allows it to fit whatever structure of pseudo-amateurism the future of college sports holds since it could include something from the schools themselves down the road. I appreciate that it does not place additional requirements on the athletes, but drafting laws involves zealous advocacy with realistic negotiation and compromise in mind. In order to appease the pro-“amateurism” crowd and NCAA lobbyists, I would not be surprised if requirements such as informing the institution when the athlete obtains professional representation, who that representation is, what are the types and terms of NIL compensation so that (a) we as market players can better understand the existing market for college athletes’ publicity and see where it can go for their best interests, and (b) the governing bodies can reasonably anticipate and identify with proof any actcual red flags of people taking advantage of athletes to act in the athletes’ best interests (while, let’s face it, probably finding a way to profit itself).

Like any bill, it will likely get revised as it moves through the legislative process, but considering both republicans and democrats are behind this bill’s purpose, I believe Michigan will have a law protecting college athletes’ right of publicity allowing them to seek compensation for their name, image, and likeness in the near future.

Well, I think that completes my thoughts… for now! Let me know yours!