House Status:
Senate Status:
Senate Status:
Minutes for SB474 - Committee on Commerce
Short Title
Permitting student athletes to receive compensation for the use of their name, image, likeness rights or athletic reputation when 15 other states adopt similar legislation.
Minutes Content for Wed, Mar 4, 2020
Chairperson Lynn opened the hearing on SB 474 and requested Assistant Revisor Charles Reimer to provide an overview of the bill.
Chairperson Lynn recognized Allison Garrett, Emporia State University, who provided testimony in support of the bill. She said the views she shared were her own and she was not speaking for any organizations. The proposed legislation should be viewed as "pay-while-playing" rather than "pay-for-play" legislation. She made the distinction because the legislation does not contemplate compensation of student athletes by educational institutions, beyond the current scholarship model. Rather, the legislation is an attempt to clarify the circumstances in which a student athlete may make outside use of his or her name, image and likeness. (Attachment 1)
The NCAA ( National Collegiate Athletic Association) has long had a process for student athletes to seek approval for outside compensation earned in various ways, though this legislation as well as that of California and other states will broaden the circumstances for doing so. The legislation proposed in Kansas serves as a place saver for our state, which will allow universities in Kansas to remain competitive in a changing landscape. While the legislation will open up opportunities for college athletes, there are some areas of concern:
- Preserving the distinction between an amateur college athlete and a professional athlete,
- Assuring that college athletes do not become employees of their universities,
- Assuring that Title IX remains an effective tool for keeping opportunities open to both men and women,
- Challenges in monitoring what will be a very complex area,
- Assuring that the new model is not used to incentivize recruiting, meaning its application would be limited to student-athletes once they are enrolled at an institution, and
- Assuring that Olympic-type sports, that may not be as lucrative as some other sports, are not harmed by a move toward a pure business model.
Congress is working to address the issue of student athletes' use of their name, image and likeness at the national level. Regardless of whether legislation comes from Congress or the states:
- Rule-making is necessary through the NCAA's legislative processes to ensure that a structure exists to maintain a level playing field for schools from around the Association. The NCAA is working hard to identify key attributes of that structure and, through its legislative bodies, to put that structure in place in a timely fashion.
- Monitoring will present new areas of complexity for universities. The NCAA has said that the compensation that should be open to athletes for use of the name, image and likeness should be just for that. It should not be compensation for choosing one school over another, nor should the compensation be for performance on the track, court or field.
Senator Thompson asked whether there could be a situation in which a student makes a contract with a corporation and the advertising is in conflict with the standards of the university and how that situation would be resolved. Ms. Garrett responded the language of the bill does require a student athlete who enters into an agreement share that agreement with the university and conversely that the university share agreements with the student who is represented as far as athletic apparel standards. She said there are challenges and this type of situation would be part of the rule-making that is necessary because of the complexity of the issue. Senator Thompson asked if a federal standard was her preference rather than fifty different state versions. Ms. Garrett responded affirmatively, but she appreciated the fact that Kansas was pursuing the issue, until such time as a federal standard is achieved.
Concerning inducements, Senator Baumgardner asked whether a student might enter into an agreement with an agent and then be shopping around for the institution that has the product the student prefers to use. Ms. Garrett said the legislation is drafted in such a manner that makes it clear it is not intended to apply to the student who is still in the process of deciding where the student will attend school. Senator Baumgardner asked about students who sign up with a school but end up attending a different institution. Ms. Garrett responded this occurs with student transfers but there are complicated rules and regulations related to student transfers which help assure a student athlete is receiving assistance from the involved institutions in making the decision to transfer.
Chairperson Lynn recognized Jeff Long, University of Kansas, who provided testimony in support of the bill. College athletics is in uncharted territory and the future competitiveness of university intercollegiate athletic programs in Kansas could be at risk unless proactive actions are taken. The Fair Pay to Play Act in California is altering the landscape of college sports and has focused the spotlight on student-athletes' potential to profit from their name, image and likeness, also known as NIL. The California law brings potential unintended consequences and Kansas must be prepared to enact this bill to address this complex matter and allow universities in Kansas to remain competitive by preserving the integrity of the sports that each institution offers. (Attachment 2)
While the NCAA is working through its legislative process to enact rules allowing the monetization of a student-athlete's NIL, that process may not be complete before many state bills go into effect. If Congress fails to preempt individual state laws, Kansas universities will be left to abide by the outdated and changing NCAA rules. This would then allow universities in states that have already enacted their own bills regarding NIL to recruit according to their state's laws while they wait for the outcome of the federal process, if there is one forthcoming. Each state bordering Kansas already has similar NIL bills pending.
While providing student-athletes the opportunity to monetize their NIL, this bill also helps to preserve the advances that have been made through Title IX. He said, in his opinion, the bill would help fend off those who advocate for student-athletes becoming employees of the institutions. If student-athletes become employees, it could lead to a dramatic reduction in the number of sports institutions could sponsor.
Noting the complexities of personal service contracts, Senator Thompson asked whether the universities have any responsibilities in guiding student-athletes in how they deal with an agent and would there be any increased costs to the universities in handling this matter. Mr. Long responded this is new territory and it is unclear how it will play out. The responsibility for the university will be one of monitoring and enforcing that the rules are followed.
Senator Baumgardner asked how many of the Big 12 member states have NIL legislation. Mr. Long said the bordering Big 12 states to Kansas have pending NIL legislation and a couple of the Big 12 states are relying on the federal solution.
Senator Holland asked about the status of the California legislation on NIL. Mr. Long responded the bill has passed and is scheduled to go into effect in 2023.
Chairperson Lynn recognized Gene Taylor, K-State Athletics, who provided testimony in support of the the bill. While there are many good points in the bill, he noted concerns about the effect of the legislation on Title IX initiatives and allowing outside third-parties, such as agents and/or advisors, to be a part of the NIL process. (Attachment 3)
Chairperson Lynn recognized Matt Lindsey, Kansas Independent College Association (KICA), who provided testimony neutral to the bill. While generally supporting the bill, he noted concerns the bill would not allow KICA institutions to prevent a student-athlete from partnering with a third-party which directly contradicts an institution's values and missions. He suggested the bill could be improved through addition of language allowing the institution to have limited veto power over the student's third-party contractual agreements. He proposed the bill be amended to include an opt-in clause for private non-profit colleges. Such a clause would allow those private non-profit colleges who either can or want to allow students to receive NIL compensation to do so, while allowing those institutions who feel the financial and staff capacity burdens outweigh the benefits or recognize the limited likelihood of their student-athletes being sought after for NIL endorsement contracts to not participate. (Attachment 4)
No testimony was submitted in opposition to the bill.
Chairperson Lynn closed the hearing on SB 474.
The meeting adjourned at 9: 44 a.m. The next meeting is scheduled for March 5, 2020.
