College athletes would need school approval for NIL deals under bill passed by Utah Legislature
SALT LAKE CITY — College athletes in Utah who want to profit from their name, image and likeness will have to seek written approval from their school for any business deal over $600 under a bill that received final approval from the Senate on Friday.
The policy that gives Utah universities more control over marketing partnerships between students and athletes, known as NIL deals, passed on the last day of the 2024 legislative session on a 21-7 vote after the House passed it with little opposition last month approved.
Under the measure, universities will be required to confirm in writing whether an NIL deal violates the school’s policies or the standards set out 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 also prohibited, as are “sexually oriented” companies that pay employees for full or partial nudity. Athletes may not promote a firearm that they do not legally possess.
The new requirements will take effect May 1 if Republican Gov. Spencer Cox signs the bill into law.
Before this year, Utah remained on the sidelines as 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 these states have since clashed in court with the NCAA over who has the authority to regulate these deals.
Rep. Jordan Teuscher, a Republican from South Jordan and the bill’s lead sponsor, said it’s time for Utah lawmakers to legislate what he called “the wild, wild west” of student-athlete endorsements.
While the policy brings Utah into line with the NCAA requirement that athletes notify their schools of major NIL deals, it goes a step further by requiring schools to sign these agreements. Opponents have argued that because NIL agreements are between the student and a third party, neither the university nor the state should have control over them.
The high value of some local NIL deals came into view in December 2023 when University of Utah basketball players and gymnasts showed up to class in flashy new Jeeps and RAM trucks that sell for more than $40,000. The students had been given lease cars through an NIL deal with a company called 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 that would no longer make NIL deals a matter of public record would undermine Utah’s schools’ ability to compete in would protect recruitment. As a business owner who has negotiated many NIL contracts, Wilson said entities are less likely to enter into such contracts if they are public.
“These contracts are private contracts between my company and the student-athletes. It was negotiated between the two of us,” Wilson said. “If we do not support this, I fear that making NIL contracts public would be a major disadvantage for our universities.”
Critics of the bill say the public records exemption would undermine transparency and regulatory efforts. The legislation would overturn a ruling by the State Records Committee that said NIL contracts become public records once they are shared with a university.
“If the government is going to be in the business of regulating these private agreements, the public has an interest in ensuring that they fulfill that regulatory function,” said Jeff Hunt of the Utah Media Coalition, a consortium of news media.
Another opponent, Sen. Kathleen Riebe, a Democrat from Cottonwood Heights who voted against the measure on Friday, has expressed reluctance to limit student-athletes’ ability to profit from their achievements after state universities have profited from them for years.
Earlier Friday, NCAA President Charlie Baker said the organization’s board of directors directed its enforcement staff to cease 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 that bars third parties from paying recruits to attend a particular school.
New NCAA policy approved in January encourages athletes to report all NIL deals so the organization can build its own database, which it says will improve transparency and help students make informed decisions.
The NCAA, which represents some 1,100 schools and more than 500,000 athletes, also wants to create a registry of agents and companies that work with student-athletes to better protect them from predatory business practices.