On June 22, 2021, Oregon joined the growing list of states to have passed laws prohibiting the National Collegiate Athletic Association (NCAA) and educational institutions from prohibiting student-athlete monetization of name, image, and likeness (NIL) rights. Pending Governor Brown’s signature, SB 5 would be effective July 1, 2021.
Under SB 5 student-athletes are permitted:
- To enter into agreements relating to the use of their NIL for compensation;
- To receive food, drink, lodging, or medical expenses or insurance coverage from a third party as compensation for NIL use; and
- To contract with and retain professional representation or an athlete agent.
While generally prohibiting limitations on exercise of the above rights, SB 5 sets forth certain restrictions, including:
- A requirement that student-athletes notify their educational institution of any NIL contract;
- A prohibition on student-athletes entering into contracts that conflict with team rules or the institution’s third-party agreements (except that an institution may not prevent students from exercising NIL rights when not engaged in official team activities);
- A prohibition on receipt of compensation from the institution itself for NIL use;
- Expressly permitting schools to enforce a general code of conduct applicable to all students.
In relation to athlete agents and professional representatives, SB 5 requires registration under and compliance with Oregon’s existing Revised Uniform Athlete Agents Act (“the UAAA”), and makes certain amendments to the UAAA to begin to address the newly permitted activities. SB 5 also prohibits representation of student-athletes by any representative that in the preceding four years, represented an educational institution.
Certain provisions of prior drafts of SB 5 were removed in the engrossed version, including a requirement that merchandising agreements with collegiate sports teams include royalty payments to current and former student-athletes. Also removed was a carveout from the bar on conflicts with educational institution team rules or third-party contracts, which would have permitted athletes to engage in social media-only NIL activities even when a conflict was present.
A number of provisions of the bill seem to require further definition. For example, students are permitted to engage in NIL activities that conflict with institution contracts “when not engaged in official team activities” which could be interpreted as permitting such activities outside of official practices, games, and other events, or alternatively, only in the offseason. It is similarly unclear whether the prohibition on representation by any person that “represented a post-secondary institution of education at any time in the preceding four years” is intended to bar representation by attorneys, accountants, and other professional representatives that may work with schools, or former institution employees such as coaches and athletic department staff, or both.
Barring preemption by federal law or the adoption of NCAA-wide rules, Oregon educational institutions will need to be prepared to comply with SB 5 effective July 1. We are working with institutional clients to develop policies and procedures to address NIL modernization, and would be happy to talk with you about SB 5 and the changing college athletics landscape.