H.R. 3847: SPORTS Act

The proposed bill, known as the SPORTS Act, aims to protect the rights of student athletes regarding their name, image, and likeness (NIL). Here’s a breakdown of its main provisions:

Short Title and Definitions

The bill is officially titled the Student-athlete Protections and Opportunities through Rights, Transparency, and Safety Act. It outlines definitions for crucial terms such as:

• Compensation: Refers to payments for the use of a student athlete's name, image, and likeness rights, excluding specific types of financial aid.
• Student athlete: An individual enrolled in an institution who participates in varsity sports.
• Name, image, and likeness rights: Rights that allow individuals to control and profit from the commercial use of their personal identifiers.

Protection of Student Athletes' Rights

The bill establishes that student athletes have the right to enter into agreements regarding their NIL without restrictions from their educational institution, athletic conferences, or associations, except in specific circumstances that pertain to ethical standards and contractual conflicts.

Students must disclose any NIL agreements to their institutions within 60 days of entering into such agreements, but their private information about these agreements should be protected from public disclosure without their consent.

Regulatory Changes and Agent Responsibilities

The bill proposes modifications to the existing Sports Agent Responsibility and Trust Act, removing warnings that discourage student athletes from seeking representation. It stipulates that agents must disclose their registration status with the relevant athletic association to student athletes when facilitating NIL agreements.

Roles of Athletic Conferences and Associations

Athletic conferences and associations are tasked with setting up processes for registering agents representing student athletes and maintaining databases to help estimate the fair market value for NIL agreements. They can also create educational materials regarding NIL rights for athletes and their families.

Determination of NIL Market Value

Institutions are required to provide anonymized data regarding NIL agreements to their athletic associations to facilitate the establishment of a publicly accessible database for estimating NIL values, ensuring the privacy of student athletes is maintained.

Federal Funding Eligibility

To receive federal funding from the Department of Education, institutions must comply with this act's requirements, which include providing education and training to student athletes on career preparation, financial literacy, mental health, and NIL opportunities. Additionally, institutions must cover medical costs for injuries sustained during athletic participation for four years post-graduation.

Grant-in-Aid Protections

The act prohibits institutions from reducing or canceling grant-in-aid scholarships for reasons related to an athlete's performance, injuries, or other personal circumstances. Grants must remain available for the purpose of degree completion for up to ten years.

Limitation on Liability

Institutions and associations that comply with the act will not be held liable for enforcing rules regarding NIL compensation and student athlete participation in competitions, provided these rules align with the act's provisions.

Preemption of State Laws

The bill asserts that no state laws can enforce rules that conflict with the act, particularly regarding student athlete compensation and eligibility related to their NIL rights. It also clarifies that student athletes will not be considered employees of their institutions based solely on their athletic participation.

Relevant Companies

• NKE (Nike): As a major sports apparel and footwear brand, Nike could be affected by the NIL market dynamics as student athletes gain the rights to negotiate their endorsements independently.
• ADBE (Adobe Inc.): With a focus on digital marketing and media, Adobe may leverage NIL opportunities by providing services for student athletes promoting their brands via digital platforms.
• SONY (Sony Corporation): As a company involved in entertainment and sports marketing, Sony would potentially engage in NIL deals with student athletes for various promotional campaigns.