Media Mentions News / 08.21.2020

KJK’s Samir Dahman Speaks With the Detroit News Regarding NIL Rights for College Athletes

KJK Attorney Samir Dahman Speaks With the Detroit News Regarding College Athletes’ Name, Image and Likeness

Clock is running out on college athletics’ ‘indentured servitude’ system

James Hawkins, The Detroit News

One way or another, rules that determine how college athletes can make money won’t be the same by this time next year.

The NCAA currently prohibits student-athletes from receiving more than the value of their scholarships and modest cost-of-living stipends. But changes are coming that could allow players to profit off their name, image and likeness (NIL) thanks to a wave of political pressure.

California, Colorado and Florida all have passed NIL laws that will lift restrictions on college athletes’ compensation and allow student-athletes to capitalize on their personas through third-party endorsements, from promoting a product on TV and appearing in an advertisement for a car dealership, to signing autographs for cash and making money as a social media influencer.

Over 25 other states have joined the nationwide movement and are working on similar legislation, including Michigan. Such bills would protect college athletes’ NIL rights without risking their eligibility and would prevent schools in those states from enforcing the NCAA’s current rules.

While health and safety issues have garnered much of the NCAA’s attention during the coronavirus pandemic, the NIL push still is forging ahead. Florida’s law is scheduled to go into effect July 1, 2021 — 18 months before California and Colorado — and the ball has been placed in the NCAA’s court to adjust its rules accordingly.

“We’re starting now in our society to see all of the issues of how these athletes are being taken advantage of. And this is just one small thing that’s getting more of a spotlight,” said Jaime Miettinen, who founded Miettinen Law in Detroit and is an adjunct professor at Detroit Mercy, where she teaches sports law. “A lot of people need to realize that we’re not just talking about your five-star recruits who aren’t college athletes yet. We’re not talking about the Heisman winners. We’re not talking about your MVP. We’re not talking about your captain.

“We’re talking about everyone having the opportunity to make a little bit of money. Whether it comes from a commercial deal, or it might be a big-time endorsement deal. But it also could be a female athlete getting sponsors on her Instagram page and becoming an influencer. There’s a lot of opportunity here for students to make money to live, make money to invest, especially for first- or second-generation college athletes to be able to make a living using their value from their college career.”

Uneven playing field

Two people who didn’t have an opportunity to do so are Michigan state representatives Brandt Iden, who played tennis at Kalamazoo College, and Joe Tate, who played football at Michigan State.

That’s what prompted Iden, a Republican, and Tate, a Democrat, to be at the forefront of Michigan’s NIL charge. The two lawmakers introduced a bipartisan plan that passed by a wide margin in the Michigan House in late May and will need majority support in the Senate before heading to Gov. Gretchen Whitmer’s desk.

Iden’s House bill “prohibits preventing a student athlete from receiving compensation for the use of his or her name, likeness, or reputation” and Tate’s House Bill 5218 “repeals criminal and civil provisions related to prohibited conduct of an athletic agent.” The goal is for the legislation to go into effect Dec. 31, 2022.

Tate and Iden both view it as a fairness issue and agree student-athletes should have a chance to leverage their likeness for profit in an industry that rakes in billions of dollars per year.

NIL RightsOne common opposing argument, though, is that college players already receive a free education and they should not be paid or allowed to sign endorsement deals because they’re just like any other student. However, Samir Dahman, an attorney who has represented former college athletes who had their NIL used in advertisements without consent, said athletes aren’t treated equally as their college peers who receive academic scholarships.

“They can sell their name, image and likeness. They can be a social-media influencer. They can have a YouTube channel. They could start a business on the side,” Dahman said. “They’re getting a scholarship. Why is their name, image and likeness not being taken away? Why is it only being taken away for the athletes?

“It’s arbitrary. It is 100% indentured servitude. … That’s what’s going on here with colleges. You’ll generate a million bucks per year in revenue for me, and then you’ll have your chance at being in the professional leagues.”

Dahman added the value that college athletes, particularly football and basketball players, bring in versus the value of their education “is not even close.” For example, he cited the amount of money University of Michigan football players help generate from ticket sales alone each year. During the 2019 fiscal year, Michigan’s ticket sales totaled $53.8 million, according to a database of financial reports compiled by USA Today, and much of that revenue was from football. Michigan football also was budgeted to make $49.5 million from spectator admissions for seven home games in 2020 before the coronavirus pandemic hit.

And that doesn’t even include TV money that has skyrocketed. After receiving $36.3 million in 2017, Michigan received $51.1 million in 2018 from Big Ten Conference disbursements thanks to a new rights deal with ESPN/ABC and Fox, as well as the success of the Big Ten Network.

“If you were a salesperson and you sold ads and you brought in a million dollars in revenue, would you be like, sure, I’ll take $50,000?” Dahman said. “That’s crazy. That math doesn’t make any sense.”

The NCAA also has claimed that allowing college athletes to make money would take away from the educational mission. But that’s already the reality, according to Marc Edelman, a law professor at New York’s Baruch College, founder of Edelman Law and a nationally recognized expert in sports law.

Edelman said major conferences already have “separated and distracted from the educational opportunity of college athletes.” For instance, men’s basketball players miss chunks of class time to play in road games that maximize school revenue from television broadcasts. In many cases, Edelman added, all the duties — such as practice, film, weight training, travel and games — equate to a full-time job.

Dahman took it a step further and said college athletes are “unquestionably, undeniably” employees of their schools because they’re told when to be at their workplace, they’re provided tools and equipment to do their job, their hours are regulated and how they do their job is regulated among other things.

“We’re trying to preserve this fake system where we are not characterizing college athletes as employees and instead we’re trying to give them name, image and likeness rights to appease the people that want to pretend like the amateur system is real,” Dahman said.

State or national issue?

The NCAA Board of Governors signed off in April on recommendations to allow athletes access to a free market, with “guardrails,” and established a working group to tackle the matter. The NCAA expects to finalize a plan by November and have its own legislation ready for a vote in January. If passed, it would go into effect at the start of the 2021-22 academic year.

As NCAA leaders have touted the need for modernizing its rules while still maintaining the so-called collegiate amateur model, they have turned to Congress for help to avoid a patchwork of state laws.

College sports officials have expressed concerns that the lack of a national policy will lead to a competitive imbalance, bidding wars for recruits and an array of potential legal issues.

“It would seem from a consistency standpoint and interstate commerce standpoint that there would need to be a national solution,” said Daniel Hurley, CEO of the Michigan Association of State Universities. “You take an example of an Indiana resident college athlete who heads over to Ohio and play football for two years and then transfers up to a Michigan school. How does that all work? It’s pretty complex there.”

However, Miettinen disagrees that a series of state laws would present major legal consequences and would be as problematic as some are building it up to be.

“Really, there are no hurdles legally to be expected because these state bills that we’re talking about, and especially with Michigan’s two, we’re talking about compensation from third parties,” Miettinen said. “We’re not talking about the status of athletes being employees. So, all those employment law conceptions are irrelevant. We’re not even talking about unionizing, so we’re not even talking about Title IX either. That’s kind of a red herring in this discussion because Title IX only applies to institutions receiving federal financial aid. We’re not talking about money switching hands between the school and the athletes here. We’re talking about external third parties.”

Adam Epstein, a law professor at Central Michigan who serves on the editorial board of the Journal of Legal Aspect of Sport, said the various state laws are only troublesome for the NCAA and its current bylaws.

He added he thinks NIL legislation is a state issue and doesn’t need to be a concern at the federal level.

“In my opinion, this is not a complex issue from a legal perspective at all — allow student- athletes the same economic freedoms as any other student. That’s it,” Epstein said. “The issue is that the NCAA does not want to allow it.”

According to Dahman, the idea that a uniform federal law is needed so that one state doesn’t have an advantage over another state is “stupid.”

“States compete all the time for talent. For example, minimum-wage issues,” Dahman said. “Look at California. They have pro-worker rights laws. And yet, that’s where everybody wants to go and work and live. Look at housing prices in San Francisco, L.A. and all of California.

It’s way more expensive than the rest of the country because people want to go work there.

“Somehow employers across the country have figured out how to manage (different minimum wage laws). So if one state has a slightly different (NIL) law than another state, big whoop. The players can all figure it out. To pretend a college student is too dumb to figure this out, to navigate it is insulting and ridiculous.”

Edelman echoed Dahman and pointed out there are a myriad of laws that are not identical from state to state, from marijuana and gambling laws to taxation rates.

“If states were not allowed to have different laws from one another, then there really is no point in continuing to have states,” Edelman said. “It makes it a little bit absurd for the NCAA to somehow claim that rights granted to college athletes are different from all of these other areas.”

Edelman also noted if the NCAA lifts its anti-competitive bylaw that disallows college athletes from signing endorsement deals for pay, all the issues about state law would become moot.

“It would put all NCAA member schools in compliance with all of the state laws that have been passed and presumably all the state laws that have been proposed,” Edelman said. “It’s really that simple.”

Power play

Last month, the NCAA and the Power Five conferences, which includes the ACC, Big Ten, Big 12, Pac-12 and SEC, sent proposals of athlete compensation guidelines to Congress. Both had their share of restrictions and were much friendlier toward the governing body of college athletics.

The Power Five’s proposed NIL legislation, called the Student-Athlete Equity Act of 2020, would prevent athletes from signing endorsement deals until they complete their first semester of college, would allow schools to bar athletes from entering into certain NIL ventures and would make it mandatory for all NIL contracts that athletes enter with agents and businesses to be made public.

The NCAA’s NIL proposal, called the Intercollegiate Amateur Sports Act of 2020, wasn’t as specific but asked for Congressional protection from lawsuits and state laws while also seeking full control to create NIL legislation.

There also ias federal legislation in the works and a few federal bills that have been proposed. In June, Florida Sen. Marco Rubio introduced a bill that would protect the NCAA from being challenged in court if it changes its NIL rules and would give the organization until June 2021 to have new rules in place the would supersede state laws.

Last week, a group of U.S. senators, led by New Jersey’s Cory Booker and Connecticut’s Richard Blumenthal, announced its intention to draft a college athletes’ bill of rights aimed at compensating college players. The proposal expands on the ways in which a college athlete can make money even beyond NIL, including group licensing deals and revenue-sharing agreements.

“(State bills) say that colleges within the state must give their athletes the same rights that any other citizen of that state would have,” Edelman said. “The discussion at the federal level has been fundamentally different from what we’ve seen on the state level. And quite frankly, what we have been seeing at the federal level is an embarrassment.

“On the surface, they’re asking Congress to pass a bill related to name, image and likeness. But if you look at the proposed bill from the NCAA, it actually is a bill that more appropriately would be called the ‘do not give college athletes any rights whatsoever’ bill.”

Miettinen expressed concern that federal legislation would take into consideration the NCAA’s views and opinions, which would lead to athletes receiving fewer rights than they’re set up to receive in the proposed state laws. Even though there are slight differences in the state bills, the spirit of them is the same.

She also said a lot of the regulations being proposed by the NCAA and Power Five weren’t focused enough on current student-athletes and were too concerned with prospective athletes, which speaks to the inefficient job the NCAA has done enacting and enforcing recruiting rules.

“What I think is notable about the different approaches that the states have taken with what the federal legislators have taken is how much they’re willing to address athletic associations,” Miettinen said. “A lot of these state bills are speaking directly more so to the schools, saying we value the athletes’ rights the most, but we do acknowledge you have some interest here, so this is the framework without being too vague but without being too expressed either, which is nice for legislation to move prospectively through time. The federal legislation has been giving a little bit too much attention to what the NCAA wants and maybe not necessarily to what is equitable to the athletes themselves.”

Dahman said Congress can tackle plenty of complicated issues — “Especially if there’s something that I don’t think is complicated like this (NIL),” he added — but he doubts the legislative branch would be able to come up with a fair outcome because student-athletes can’t organize and lobby as effectively as the NCAA, conferences and universities.

“The NCAA has proven that it will not budge and won’t do the right thing unless forced to,” Dahman said. “And when you look at the federal legislation, it’s basically being written by the NCAA because they have so much money. Anything that goes through Congress … is going to be one-sided and favoring the NCAA.”

‘Expanding the pie’

As the NIL debate rages on, it’s still anybody’s guess how aggressively athletes’ NIL endeavors will be regulated, how a framework is going to be created and how everything is going to shake out.

Miettinen, Edelman and Dahman all agree the worst-case scenario for college athletes would be federal legislators giving the NCAA “the equivalent of a blank check,” as Miettinen put it, to draft its own rules and regulations with an exemption from antitrust law.

The best solution, according to Edelman, Epstein and Miettinen, would be the emergence of a free and open market without restrictions. Yet, Miettinen has her doubts that would happen.

“I think having these different state bills is OK because the NCAA has chosen up to this point not to grant them these rights,” Miettinen said. “Let the states worry about this so that way it also remains consistent with whatever their state laws currently are. I think it’s more appropriate for the federal legislature to take on other issues of regulating college athletics, such as the different social justice issues were seeing, the different medical issues.”

Dahman said all the proposed state legislation is reasonable and it would make sense for the NCAA to simply adjust its rules to accommodate the states.

“None of the laws that have been proposed by Florida, California, Michigan and the pending legislations have anything crazy in them. They’re all basically saying you have to let the college athletes have their name and likeness rights,” Dahman said. “They can’t conflict with a team contract, which is fine. None of them say that the athletes have to be paid like employees or given any extra benefits.

“We’re not talking about carving up the pie. We’re expanding the pie.”

Epstein sees parallels with the battle over college athlete NIL rights to the Olympic model, which opened third-party revenue streams for amateur athletes in the late 20th century.

“Many thought the Olympic ideal of the amateur athlete was the appropriate and defining difference between the Olympics and professional sports. Some thought that the Olympic movement would implode if competitors could be compensated or sponsored for their efforts,” Epstein said. “Today not only is the Olympic movement still thriving, but professionals rule the day in Olympic competition and sponsors seek out the best.

“College sports, just like the Olympics, can still thrive even if local or national sponsors want to share their dollars with the college athletes themselves rather than just its governing authority.”

While the NCAA could potentially draw from that model, Epstein said the organization should be focused on more important legal matters, like what might happen when college athletes finally decide they are treated like employees and should be compensated as such.

“The world has changed,” Epstein said. “When will the NCAA finally recognize that its bedrock principle of amateurism — and all of its current exceptions — is simply an antiquated notion whose time has come and gone?”

 

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