On Tuesday, Feb 18, 2020, Jim Cavale hosted a webinar exploring parts of Florida’s NIL legislation, and offering analyses into how NIL legislation and topics are progressing at the national level.
Jim was joined by panelists Darren Heitner, sports lawyer and author of “How to Play the Game: What Every Sports Attorney Needs to Know,” as well as Tom McMillen, President and CEO of the LEAD1 Association, which represents the athletic directors and programs of the Football Bowl Subdivision.
Full Webinar Transcript
Jim Cavale: Hello everyone, welcome to INFLCR’s webinar on name, image and likeness. I’m the founder and CEO of INFLCR, Jim Cavale, and I have an awesome panel of guests joining us for today’s webinar, including Tom McMillan. Tom is a retired professional basketball player, also played his college ball at Maryland before playing in the NBA, Rhodes scholar and also was a democratic congressman for six years in D.C. and is really doing some really cool things now with Lead1, lobbying for FBS schools in a lot of great ways in D.C. And then we’re also joined by Darren Heitner. Darren Heitner from Heitner Law is legal counsel for pro athletes like Antonio Brown, works with Drew Rosenhaus and Rosenhaus Sports, has been featured many times on ESPN’s Outside the Lines, based in Florida, who has one of the most progressive NIL bills of any of the state. So first of all guys, thanks a lot for taking the time and being on this webinar with me.
Tom McMillen: Glad to be here.
Darren Heitner: Thank you. If you can hear me and see me and there’s no sound…
Jim Cavale: Yeah, full disclaimer, we’re starting about five minutes, six minutes after scheduled time because we had some technical difficulties but yeah, Darren, we can hear you well and Tom also thanks for joining us.
Tom McMillen: Absolutely. Good to be here.
Jim Cavale: So I want to open up with a thought that I want you each to expound on and we’ll let you expound on it first time and then Darren second. And so here’s the thought, the thought is this NIL stuff affects all of the NCAA institutions greatly yet it seems like the NCAA is not really taking the lead on what the legislation or bylaws will really be.
Tom McMillen: Well, you have to understand the NCAA is a representative organization and you have to kind of work these legislative processes through … you have to go through a lot of hoops. And so right now, they have a workgroup trying to develop the concept, so I would say that it’s still possible they’re going to put up a proposal sometime this spring. And that may be something that is the basis for continuing this process at the state and federal government but to your point, is the NCAA out in front on this? No, the states have been out in front clearly and they’re the ones that are driving this process.
Jim Cavale: Darren, you’re in a state, as I mentioned, Florida, that has a pretty progressive bill and as we know, whatever state leads the way the others will most likely follow, how did you see this from a standpoint of the states leading the charge versus the NCAA whose institutions are all greatly affected by what’s decided leading the charge?
Darren Heitner: I’ll begin with an apology. I actually could not hear a thing that Tom said, so I can’t react to anything that he said, I didn’t hear it, but with regard to what we’re doing here in the State of Florida, we are certainly leading the charge. There was a bill that was introduced by Representative Chip LaMarca here in the State of Florida and it started off being called a student athlete feeding attack and it was initially proposed in the House of Representatives, it went through a couple of committees and has been modified tremendously since originally being proposed and sponsored by Representative LaMarca.
What we did was we took the California bill that was passed, and that is supposed to be enacted in 2023, and modified it with the assistance of others that are reputable in the industry. We called on a lot of criticism and asked for assistance by various individuals and came up with an effective date of 2020, July 2020. What some of you may have read recently is that while our bill has gone through two House committees and is expected to be on the House floor this week, there is … there are efforts in the Florida Senate to do … to make … have similar momentum. And just yesterday, there was a bill proposed, with an amendment, that will be essentially a mirror image of what we’re proposing in the House but with an effective date of 2021.
Ultimately, what we’re doing in the State of Florida is most importantly making sure that athletes, college athletes, have this right to exploit their name, image and likeness. There had been additives to that piece of legislation, I’m sure we’ll get into that, but really why Florida in particular has made headlines is because of that effective date, whereas California was the first to act and passed a bill and it was signed by the governor, again it will not be effective until 2023. Florida, we wanted to move on. quicker, initially establishing a July 2020, and now there may be a debate as to whether it be July 2020 or July 2021. That’ll be reconciled if the senate bill passes then before March 13th, which is the cutoff in the Florida House and Senate. They’ll have the reconciliation between the two chambers before we go to the governor and Governor Ron DeSantis has stated that he is in support of some type of legislation that will allow college athletes to exploit their names, images and likenesses for some sort of commercial benefit.
Again, I didn’t hear what Tom stated but it is interesting that for the longest time, the NCAA would not move whatsoever. I can’t even say that it was at a snail’s pace. In fact, you had the NCAA equate this opening Pandora’s box. Now that’s some strong rhetoric. Now we’ve seen a tremendous shift recently with all the various states, over 20 of them looking at this type of legislation, including the State of Florida, where it’s not so much about opening Pandora’s box, we now have the NCAA seemingly rallying around it but they want to control the process and perhaps tie these benefits to educational opportunities, which is a bit vague, although you can look to the O’Bannon case to really determine exactly what they’re looking for.
The problem is the NCAA because it was in proactiveness sort of late to the game and you have various congressmen on the federal level who are looking to put their name … attach their name to some sort of legislation but there’s a lack of unity. So that’s why it’s so important for states like Florida to continue the momentum and hopefully put pressure on either the NCAA or federal Congress to take some action. Ultimately, all of us want some sort of unity and federal action, it just has to look right and we think that what we’re proposing in the State of Florida is a great model.
Jim Cavale: Well, I smirked when you said lack of unity because I think that’s really the elephant in the room here is it’s tough enough if a business or a league or any type of organization has two leaders, co-CEOs. We’ve seen people try it. I feel like there’s 2,000 in this case between conference commissioners and athletic directors and university presidents and the NCAA and then congressmen and women in the government side of things, it seems like there’s a lot of people with a lot of different initiatives. Tom, you know politics and the government a lot more than I do, I’d love to hear your breakdown of that aspect, this whole idea that we need unity to figure out the route ahead.
Tom McMillen: Well, there’s no question that you have to have a common goal that you’re pursuing to get legislation done. It’s hard enough passing legislation in this Congress, with the rancor and election year approaching and all the different variables, a calendar year that’s going to be shortened because of the election year, so it’s a difficult process at best and you have a lot of different coalitions. You have a hundred new … a hundred women in the House, you have 50 members of the Black Caucus who are going to be looking at this as a civil rights issue. You have some Republicans who believe that this is a state’s rights issue and the federal government shouldn’t be in it in the first place, so it’s a very difficult process putting together.
People that look at the NCAA say, “Well, why don’t they work … move quicker?” Well, it is a … there’s no question it’s a bureaucratic, slow organization but that’s what happens when you have 1,200 institutions in a system and clearly the states are pushing the envelope here. My own prediction is it’s going to be hard to get legislation done this year, we could very well be into next year, the new president, whether it’s Trump or someone else, is going to have a big say in this and this could drag out a while, this may not be resolved overnight and meanwhile, you’ve got many different states, 29 right now, all taking slightly different positions on this issue forward and obviously has their own unique provisions.
My gun on this is that if enough states move ahead on this, it’s going to be really hard to get federal legislation passed that would really strongly preempt state actions and there’s a political reason for that. In next year, all the members of Congress are dependent upon their state legislatures to draw their districts, they’re up for redistricting. And so the last thing you want to do as a congressman is go say to your senator who just passed an NIL bill, “Listen, we got to change your bill because It’s got flaws, doesn’t have enough guardrails, pretty open ended on recruiting, transfers and so forth.” And so there’s a political process here at work too, so this is a difficult process.
I think it’s a complicated issue. I don’t think that most legislators are fully aware of all the nuances. The biggest concern RADs is that an NIL benefit will not be given to a student athlete because of their intrinsic value but rather to recruit them to a school or get them to transfer to another school. That’s very hard to regulate but that is the task ahead and we’ll see what the NCAA comes back with at the end of April.
Jim Cavale: Well, Darren, I know you’re having some … still having some technical issues that we’re working on with you so that you can hear Tom but I think ultimately what we’re talking about is who’s going to lead the charge and Tom talked a little bit about how hard it is in a year like this year with an election going on and a lot of different initiatives within the House and the Senate, from republicans, some of which who think this is a state by state issue, to this becoming a civil rights issue, which is something that with 50 members coming from the Black Caucus, that’s a real thing.
And so I think this whole idea of who’s going to lead the charge is what everybody’s trying to figure out. We even have a question from our audience, “Is the NCAA committee report date of April 2020 early enough given how fast the states are moving?” and I think that’s a good question for you based on everything I just shared that Tom and I were talking about.
Darren Heitner: In my estimation, it is not. There was recently a committee on Capitol Hill that was convened, and you had a lot of senators voice their own opinions. You had Mark Emmert and you had certain conference directors and I believe an athletic director in Ramogi Huma, who’s led the charge from an athlete’s perspective, and I thought it was very insightful. You had certain senators who were extremely vocal and challenged Mark Emmert with regard to a statement that nothing yet has even been written, pen has not gone into paper with regard to any proposal whatsoever and will not until April 2020.
And it’s not that it cannot … certainly time is of the essence here, particularly with a state like Florida that has shown an intention to move very swiftly and then to provide a true proposal by the beginning of 2021 I think is much too big of a gap when you have such sincere interest on a state by state basis and certainly, I don’t think that there is any basis to challenge a particular state from adopting this type of legislation. We have not yet heard the NCAA come out and specifically and explicitly indicate that if we file a lawsuit against a particular state and the specifics of what the challenge would be, many individuals have provided an opinion as to whether the NCAA would and what the legal foundation would be in such an instance.
But I think you’re right, there is a challenge from a federal level as to one, the immediacy and urgency to pass this type of legislation. It is an election year and this is not necessarily … while this is a hot button issue and there’s a lot of discussion particularly in sports related circles, it is not necessarily the most pressing issue for the government to look at and with the impeachment hearings, I can tell you that for some time, as everyone said, this is what we’re preoccupied with.
And then it’s a matter of figuring out who will lead the charge and there are various individual senators, Mitt Romney, Marco Rubio just yesterday from the State of Florida indicated his interest in supporting this type of legislation but who will really lead the charge and propose and put his or her name sponsoring a piece of legislation that everyone can rally around? And I think what’s key is not to lose focus, that’s the biggest problem. And you find this in certain states and also with regard to certain legislators on the national level: don’t expand this beyond name, image likeness to include college athletes to earn some sort of money either on salary or as a commission related to the ticket sales.
Now we’re getting into Title IX issues, now we’re getting into very complex monetary issues, setting aside the legal issues related to Title IX. So I think the unfortunate consequence is sometimes we have this very unique discussion about name, image and likeness, monies that would not run through the universities but would be strictly between third parties and the college athletes themselves, in my estimation no Title IX challenge whatsoever, but you have individuals taking that and trying to expound upon that and that is unfortunately … an unfortunate consequence of that is in my estimation, the college athlete continues to suffer by not having this right that they should have.
So I think a unified stance would be great, the challenge is finding the leader who will take the appropriate bill, again I’m biased but I think we have a very strong leader in the State of Florida, and then putting down on the floor on the federal level. Hopefully, something like that would move more quickly than the NCAA but to be honest, I don’t think either the NCAA or the federal government will move fast enough to preclude individual states from continuing to debate legislation and ultimately pass it. I do think at a minimum, you’ll have the State of Florida with a law that enacts the name, image and likeness rights by July 2021.
If I had to guess after yesterday, I would think we push it back from 2020 to 2021, which is still pretty quick. Admittedly, if we were to pass legislation by March, put on the governor’s desk to sign in April, three months may not be long enough. So by adding a year, I think the colleges and the state understand this is an issue that they need to rally around at this point, but they also want enough time to put the right instrumentalities into place to protect themselves and we can get into what those instrumentalities and data if we want.
Jim Cavale: Tom, any thoughts on that?
Tom McMillen: I think that Florida was clearly the first state that was going to come and be effective immediately, when I say immediately this year. There is fear as you look at 29 other states and some of them could advance the legislation to all this year. And then obviously the NCAA is going to have to rewire injunctions to try to slow them down until they can finish their process. I think the… if you listen to the hearing last week, it’s clear these members really don’t have a clue as to what should be done. They’re looking for guidance. And so, and so are we. So, all of our… all of our Ads are looking for guidance. So we’re very interested in what the work group comes up with. And my gut is that it’s extremely difficult to get federal preemptive language legislation done. It certainly won’t get done this year. And then next year, you have a whole other set of issues coming into thread.
One is you’re going to have, as I said, redistricting. Number two, you’re going to have a new president or, you know, or the same president reelected and they’re going to have a voice in this as well. So this could go on for some time before there’s resolution on it. And as I said, at some point in time, when so many states act, it makes it even more difficult at the federal level.
Jim Cavale: We have a few other questions in our, in our thread. One was a, coming from Emmett Gil. One is a… whereas the college athlete voice, I assume you mean here on the webinar. We wanted to have a college athlete now but they weren’t allowed to because they can’t use their name image and likeness with INFLCR. But, you know, keep asking questions. We’ll try to get to them as we go later. Listen, while…
Tom McMillen: You know, I will… can I, can I say something about that? I do. I think all of our AD’s fully understand that the rights of publicity for a student athlete are intrinsically theirs. And that does not include the uniform or the jersey but that athlete’s rights of publicity, name, image and likeness are intrinsically that athlete’s and so no one is fighting that issue. I don’t think there’s too many of our AD’s who doesn’t, don’t think that’s fair. So when you talk about the college athlete being represented, I think that, I think it’s important that their voice be heard, and I think that this system has to be a balance, and it also has to fit into our system of higher education in this country. One of the fears that I have, having worked on these issues for almost 30 years is that we are moving very quickly and towards full professionalization of our campuses.
And I completely understand why the athletes are asking for this, particularly with the salaries and everything else that’s been spent. But the bigger question for hire in America is what do we want our college sports teams to look like on our college campuses? Do we want them to look like collegiate programs? Or do we want them to look like pro programs? And I think that’s going to be the bigger question that Congress may end up grappling with. Even while they’re looking at NIL, they may ask the question, we spend 100 billion dollars on high red. What do we want it to look like in terms of college sports on our campuses?
Jim Cavale: Well, I think it’s a perfect segue into some of the aspects that are affected by NIL, forgetting about some of the other things that this can end up being about, like you mentioned, Darren, and this could turn into topics around salary and venue, bring in title nine, or a lot of these other things. But just within NIL, you’ve got, you know, a lot of questions that, you know, when I have the opportunity to get together with AD’s of schools that we serve, these topics come up all the time, and they’re like main categories And then there’s like a bunch of subcategories par. You have representation, compensation, team contracts, health, and disability insurance, financial literacy and life skills, workshop requirements and all of them have a rabbit hole you can go down with a lot of questions that will arise. Darren, I want to start with you on the representation topic, you know, because I know you are able to represent a lot of professional athletes. I mean, if student athletes can be represented by an agent or an attorney licensed in the state, give me a little bit of… give me an explanation of the difference in services provided to a professional athlete, and then any additional factors that might play into how these, this representation will work with student athletes.
Darren Heitner: Certainly. So first of all, to be clear, I’m an attorney. I’m not an agent. That said and I should also say if…
Jim Cavale: Yeah, you provide legal counsel, not represent from an agent standpoint.
Darren Heitner: Actually nothing precludes me from currently providing legal counsel to college athletes. However, college athletes cannot sign agency contracts with representatives who would negotiate their contracts. Now, what we are firm believers of is that these athletes that we’re going to put them in a position where they’re now able to procure opportunities for themselves and negotiate these deals. They need to have the ability to have counsel, and that counsel can come in the form of an attorney or an agent. Now, what we’ve talked about in the State of Florida is limit the representation to those individuals who are licensed to practice law in the State of Florida, or who are certified as athlete agents in the State of Florida. And one of… one issue that we’ve discussed internally is should we make it harder for an individual to become licensed in our State of Florida, which is regulated by the Department of Business, DBPR.
And so, currently, you have a background check, you get your fingerprints taken, you pay a fee, and your license as an athlete agent. And that allows you the ability to recruit student athletes who come from the State of Florida and then represent them in their professional capacities. We would not in any way alter the athlete agent laws that would now allow for an agent to sign some sort of professional representation contract with a plot. For instance, in the NFL, the NFL Players Association calls an SRA, Standard Representation Agreements. In the NBA, the National Basketball Players Association calls them SPACS, Standard Player Agent Contracts. Those would still be off limits. That the limitation would be that an agent or an attorney would have the right to sign a representation agreement, or retainer agreement with a college athlete simply so that the athlete has the right to representation and can have some assistance in finding opportunities.
And again, understanding the legal contracts that surround the contractual relationship that they’re going to be entered into. And we think that’s very important to not make it so that they are unable to have that type of representation on what can be very important contract. So we’ve contemplated already, at least in our state, how the laws need to be amended in order to afford for this type of opportunity, but also how to make it potentially a bit stricter and be a gatekeeper in a sense to make it, so that not just anybody can become a certified agent in our state. Years and years ago, decades ago, the State of Florida actually required individuals to pass a test in order to become certified as agents within the state. We scrapped that requirement, and I’m not aware of any other state that currently has a test that an agent must or that an individual must pass to become certified in the state.
Meanwhile, you do have the Players Association such as the NFLPA, NBPA, Major League Baseball Players Association that do require that agents show competency before they’re certified by way of passing the examination. So I think that’s something that states should look into in putting our state far.
Jim Cavale: And once again, with each of these categories, you answer that one with other questions and then there’s, you know, a lot more than they can come with it, but another categories compensation, and, Tom, I want to bring this up with you. Get your take, I mean, this model will create a situation of new income for student athletes that’s never existed before. You talked earlier about what do we want college sports and higher education to be when it comes to collegiate athletics? You know, the protection of scholarships grant aid. Should a student athlete also receive compensation for their name, image and likeness is something that people bring up? Will the protection of scholarship and grant neighed be there or is that something that’s on the table to maybe go way because soon athletes are able to now garner this whole new revenue stream?
Tom McMillen: It’s a very good question. There are unintended consequences that we do not fully understand. Number one, if you’re on a Pell Grant, and you’re getting up to 6000, some dollars a year, and you take outside income that could impact your Pell Grant. Number two, you’re going to have income tax reporting requirements. The kids are going to have to, you know, disclose this income to the federal government. And number three is the fact that the whole IRS and how they approach college sports may change. To date, they have been very lenient in the way… in how they have treated from a tax perspective. Student athletes, they allow them to take room, board, tuition, books, cost of attendance, unlimited food, health care, and they allow them to get that without really enforcing any tax ability on that.
When the tax code is very narrow on that tax code really only allows tuition fees and books, and so doesn’t include room board, doesn’t include costs to attend. So one of the unintended consequences, I think, is that this could open up some doors with the IRS. We don’t know what that is. But there, this will not be just without consequences. And I think student athletes have to understand that to the point that we were talking about earlier about representation. I, you know, I’ve always argued that these kids should have representation. I mean, this is a big decision in their life and it’s inevitable. By the way, all the 29 bills that have been put out there, all of them uniformly allow agent and representation in those bills. So, I’m pretty sure that whatever comes out, we’ll have something in that along that line.
Jim Cavale: Yeah, and as you mentioned, some of the stuff you mentioned with the IRS, and also, so I hear a lot of what we don’t want any unfair advantages, right? You hear that a lot. But the reality is there’s already advantages and disadvantages that certain schools, conferences have based on geography, based on prestige and history of their program, based on their fan network that comes with that prestige, and the support they have. I mean, there’s already advantages and disadvantages. That’s why there’s division one, division two, division three. That’s why there’s Power Five or Autonomous Five Conferences, and then there’s group of five and so on and so forth. So I really feel like we need to eliminate that unfair advantage thing to an extent because that’s just the reality. But when you bring up IRS, geez, isn’t it different if you play a school in Florida versus if you play a school in California? Just based on tax laws and those kinds of things there and I mean, isn’t there going to be some advantages that’s based on what taxes look like in a state?
Darren Heitner: Absolutely and again, I’m addressing your comment without hearing what Tom stated, but the IRS issue is… there’s no… with regard to what we’re proposing in the State of Florida, there’s no issue with the perspective of the academic institutions and how their status may change with the IRS. Again, we’re strictly talking about money’s flowing from third parties directly to the college athletes without…
Jim Cavale: So let me stop you. Tom brought up a great point, which is to this, to this point in time, the IRS has been very lenient with the student athlete as far as the stipends and other dollars that come with their scholarship money that help them live, books, tuition, unlimited food, housing, all these things, right? And that could change with this, right, based on my question, and that’s where… you know, there’s going to be a little bit of the unknown.
Darren Heitner: Well, I try not to fall for slippery slope arguments. There’s no indication that the IRS is, in any way, going to change the status of scholarships and how they’re taxed. A lot of the income that’s received by college athletes and full scholarships is not taxable income. There are certainly exceptions that are under the current tax laws. And again, with regard to states changing their laws on the state by state basis, there is absolutely no indication that there’s going to be some sort of retaliation by the federal government in the form of the IRS and changing the tax laws in any which way. But to what you asked prior, could there be an advantage for Florida schools as opposed to California schools. Perhaps, and it’s sort of the same as what happens in the professional ranks where if an athlete is offered $10 billion from a professional team in California and $10 million from professional team in Florida, that athlete and his or her tax advisor should think about the fact that he or she is going to be taxed on his or her income in the State of California whereas in Florida there is zero income tax whatsoever.
So to the extent that the school wants to use that as a competitive advantage, God bless them. They already use things like facilities and…
Jim Cavale: Right.
Darren Heitner: …the programs and the colleges and then the coaches and so on, so forth. There’s no real competitive balance in college sports.
Jim Cavale: Exactly.
Darren Heitner: There’s no salary gaps. There’s no salaries. So to those who make the argument that there’s going to be lapses or distinctions in competition between the haves and the have nots, well, open up your eyes. It already exists. And I don’t think that the balance as it currently exists will change in any way. Perhaps a school like my Florida Gators get a little bit closer the Alabama Crimson Tide because of the fact that we have advantageous tax laws, but even that, I can’t necessarily… I don’t necessarily think that athletes are going to be picking an educational institution simply because of the tax laws within a given state.
Jim Cavale: We have a question from the audience. One of our… one of our listeners asked earlier for Tom what he what he thinks about Anthony Gonzales, former Ohio State wide receiver, now a Republican in the State of Ohio. And Congress has released talking points about a week and a half ago on NIL. I want to ask you your opinion on those talking points, Tom, but also, just given your experience, I want you to, kind of, go back into the timeline topic. So we’ll do timeline second, I’ll give you an exact question to the timeline that I think you have some, some good perspective on. But first, did you get a chance to look at Anthony Gonzalez’ talking points?
Tom McMillen: Yeah, and I have them in front of me. I actually… you know what he’s talking about his federal preemption to create one uniform standard, whenever you open up the gates of Congress, there’s no… there’s no guarantee that it’s going to be limited to NIL. It could go much, much beyond that. So federal preemption is a double-edged sword, it’s not always going to be what you expect it to be. If you look at that hearing last week, there were some senators who were very keen on making this a civil rights issue. It may open up a whole compensation stream for college athletes that we haven’t been discussing today. And also, you know, Gonzalez says, “Let’s preserve this college system that we love”, and I agree with that. But the college system has to be a balanced college system that fits into higher ed.
And finally, you know, he talks about protecting the student athlete as an amateur, ensuring legal clarity that they’re not considered employees. I agree with the employee part of that. I think the word amateur is always been a word that really is probably, based on my experiences in the Olympics, I wish we can find another word because amateur is the foundation for a lot of legal cases but it is somewhat anachronistic. Generally when I say his principles are sound, with some with some amendments. Now you asked me about timeline, how long to get a bill done. When I… when we passed the Student Right-To-Know Bill when I was in congress, which required disclosure graduation rights, which heretofore weren’t done. That took us 20 months and we had a… we had a democratic congress, a democratic senate. The Amateur Sports Act in the 70s, which was a comprehensive reform bill took about four years to get done. So, given the climate in Congress, I would say you’re looking at a process that’s at least a year to two years long.
Jim Cavale: So Darren, I asked Tom about timeline, after he talked through Anthony Gonzalez’s talking points which had to do with preemptive federal involvement, but timeline wise, you know, this is a one to two year process based on, you know, who’s in office and being in election year, it’s kind of were Tom stands on… well, before I get to my next question, do you have any response to that timeline assessment?
Darren Heitner: One to two years?
Jim Cavale: Yeah.
Darren Heitner: I think that’s… you’re talking from the federal action or the NCAA action?
Jim Cavale: I think just in general, Tom, what would you say to that?
Tom McMillen: I’m responding through congressional actions after the… after the NC…
Darren Heitner: I would hope so. Again, I think it’s a matter of getting everybody on the same page and understanding that we’re simply talking about a name, image, likeness issue and staying on course and not trying to add too much to the piece of legislation and make it so convoluted that it ultimately fails. Look, ultimately what we’re trying to do, one of the things that we’re trying to do in Florida is push this conversation so that there’s movement as quickly as possible. I talked earlier today with somebody about the fact that California currently has an effective date at 2023, but what happens if Florida passes legislation?
Jim Cavale: Right.
Darren Heitner: And it has an inaccurate date of 2021, would California go back and then its law to be effective earlier? Absolutely. Could Florida pass legislation that’s effective July 2021? And if there’s enough progress on the federal level, decide to table the enactment? Absolutely. These things will change over time. Even after a piece of legislation was signed into law, you could have a revised piece of legislation, governor signing it and delay. But one to two years would be fantastic on the federal level. I had a lot of energy and hope in association with our movement in Florida, and I was hoping that we would get something passed and enacted with an effective date this year that may be solved for a year. So if it’s July 2021… look, I think the bottom line is these are rights that the college athletes should have. So the sooner that they get them, the better.
You look across the entire country, and everyone has the opportunity to exploit his or her name, image and likeness for commercial gain, but for some reason we restricted college athletes for them. So they understand from the NCAA perspective, it’s about latching on and retaining this amateurism status and treating college athletes as amateurs. I have a big issue of using the term student athletes. I’m happy that in the State of Florida, we’ve actually changed the bill from Student Athlete Achievement Act to Intercollegiate Athlete Bill of Rights. But the bottom line is, these are athletes who attend universities and are there for educational purposes, but they’re also obviously there to perform on the field, on the court, et cetera. To ignore that they should be earning some sort of compensation from everything that they provide to their respective universities, I think, is completely unfair. So the sooner the better, if it’s a year from now, great. I hope… I’ll challenge Tom, let’s get it a year as opposed to one to two.
Jim Cavale: Well… and Tom really his last thought about the student athlete really goes into what you were saying about amateurism and the way it needs to be really looked at, at the college level.
Tom McMillen: Is that a question for me?
Jim Cavale: Yeah. I mean, you know, he brings up like, yes, these are students, but at the same time, you know, they’re performing and representing university in a high level. And I think it really plays into what you were saying in your last answer regarding what amateurism really is in college sports.
Tom McMillen: We have to sit back and say, how did we get here, right? In 1984, there was a Supreme Court decision that basically, the NCAA lost its television monopoly and that drove rampant commercialization of college sports. That’s what’s happened, that was predicted at the time, so we should not be surprised where one side has made, you know, enormous money and the other side, the student athletes are saying, “I want a piece of it.”
What happens with name, image and likeness which is an intrinsic right, I agree with the… I agree with everybody on that point is that the question that we will ask ourselves down the road is when three Duke players are making $150,000 in name, image and likeness, what will that mean… by the way, represented by attorneys and agents, what will that mean to the rest of the team into college sports in general? Will that lead to the boycott of an NCAA tournament? Will that lead to further professionalization of college sports? Those are questions that are, you know, bigger than all of us but they are questions we have to ask ourselves as a country, because do we want, you know, full professionalization of college campuses? And even though I completely understand where athletes are coming from, I wrote a book about this in 1991, we just have to do this with our eyes open because it could change how we look at higher education in this country.
Jim Cavale: There’s no doubt about it. All right, I want to, kind of, get into closing thoughts. We only have… we’re a little less than 10 minutes left. I didn’t, of course get through the five categories of questions and thoughts that, that I mentioned earlier. They were representation, compensation, team contracts, health and disability insurance, and financial literacy and life skills. I think like almost every bullet that you get from folks fits into some of those categories. But Darren, your closing thought kind of, for those who are working in college sports, what can people do if they’re working in a College Athletic Department to first of all acknowledge that this isn’t a matter of “if” but “when” and they’ve chosen a career in an industry that’s about to radically change. But in addition to acknowledging that, how can they be on the front end, be proactive, be ahead of the curve based on being in this industry and working in a college athletics department?
Darren Heitner: Well, I know that in Florida we’ve called on various stakeholders, we’ve spoken with athletic directors at every major institution. We’ve talked… we’ve talked with various individuals who are within athletic departments at the various universities and we want their insight, we want to hear what their challenges will be. The one thing that we took into consideration was that the California law in our minds was deficient because it really allowed individual athletes to enter into deals with third parties prior to being enrolled on college campuses and we thought in Florida, we want to restrict that. We don’t want there to be this undue influence, believe us. That’s not what we’re trying to accomplish. We want to avoid boosters from being able to persuade athletes to attend a particular university.
Once the activism roll, that’s when we really are partners in the sense, that the…I say that we, the athletes, the attorneys, the agents and the athletic department. And I think what’s really important is to try to route out any sort of improprieties that exists currently with boosters having undue influence. We don’t want these endorsement opportunities or exploitation of rights of publicity, to turn into boosters finding a new opportunity to spread money to the athletes. And additionally, we think that the college campuses will serve as very, very important gatekeepers. Compliance departments will become more instrumental in this entire process of making sure that there is no impropriety. And these deals that are going to be entered into between the athletes and third parties will need to first be checked by the compliance departments or as high up as the athletic director at the universities.
Again, it’s not about money is flown through the universities into the athletes, but instead, the universities will serve in the gatekeeper role to ensure that no contract that’s entered into by an athlete is in any way in conflict with the contracts that the schools have already entered into with third parties. And I’ve talked about this with various individuals, and one example that I oftentimes provide is the apparel deal between the NFL and Nike. Athletes, when they’re on the field of play, must wear the approved Nike apparel. But you also have many athletes in the NFL, who signed separate deals with Adidas, with Puma, with other brands, and they can use that apparel off the field, depending on what these contracts state between the universities and the third parties will determine what deals that athletes can enter into. But most importantly, this is not something where we think that the universities are going to lose out on any economic opportunity. If anything, we believe that the schools will be incentivized in the sense that brands will now realize they not only have the opportunity to affiliate with universities, but those same big brands can also potentially affiliate with the individual athletes providing additional value. We see it in the professional ranks. So, ultimately there will be roles for the universities to play, most importantly, in a gatekeeper capacity, ensuring that… best ensuring that there’s no impropriety.
Jim Cavale: Tom, what do you think about that? As far as your closing thought, I’d like you to focus on, is this a new revenue opportunity like Darren’s talking about for the institutions? Or the other side of it is, could this cannibalize the revenue of the institution? What are your thoughts on that?
Tom McMillen: I don’t think we know yet. I think it could be a win-win where a rising, you know, a rising sea raises all boats. I think that’s very possible where the athletes in school win. I could also project out where programs are cut at the school level because sponsors decide to cannibalize and rather put their money towards student athletes and schools. Who knows? I do know one thing. This is a complicated issue, we need to get it right. As more states jump into this and move ahead, it will be harder to get federal legislation passed. And I think that what we see happening are… what we could very well see happening are lots of unintended consequence.
Let me just give you one perspective from an AD. An AD now has to attest that they are in compliance with rules and reqs with the NCAA. And some legal scholars think that could be potentially criminal liability for some of our ADs if they falsely attested. Now ADs are going to ask them to test the third parties, all the relationships with third parties are in order and it’s going to complicate that for the AD. So, as we move down this brave new world, just realize it’s not without consequences and it will… we’ll have to adjust to it to make it work in the years to come.
Jim Cavale: Yeah, there’s no doubt. I think what we’ve… what we’ve talked about today is great context for future conversations. There’s no doubt that this is a very complex topic. And even if there wasn’t an election coming up, you know, it is not an overnight thing. There are simplicities to it that I think Florida is trying to do a good job of putting together to help people not make it more than it is but it’s still… there’s much to it, there’s much to it. And new liabilities, whether it’s for an AD to your comment just now Tom, or to a student athlete with the unknowns around the IRS, liabilities and responsibilities are going to arise, depending on what’s decided.
And listen, for me, to have you two come on this is an honor to have. The folks who are able to show up and consume this, along with the podcast listeners, this will be packaged up and put out on our podcast is awesome. But I think it’s just the beginning. It’s just the catalyst for future conversations. And I’ll tell you what, I mean, we will have athletes on, don’t worry, there’s… there’s some recent graduates who I know would love to talk about this. And I think we’re going to be able to get some ADs on to talk about this.
And a year ago, that wasn’t even possible. Because a year ago, I think it wasn’t a matter of “if” but “when”, a lot of people thought that it was an “if”. But people are starting to get their arms around the fact that it is going to happen. And all of us just want to arm ourselves with as much information as possible, and you two have a lot of wisdom and knowledge that you just bestowed upon myself and our listeners today. I’m very thankful for that. So thank you both for making the time. Thank you for all those who were able to listen and watch. And we will be back with more on this topic in the INFLCR webinar series and on my I Want Your Job podcast series throughout the rest of 2020, as this unfolds and becomes what… what many of us know will be the changing of the guard for college athletics.
Darren Heitner: Thank you.
Tom McMillen: Yeah, thank you.
Jim Cavale: Thanks so much.
You can read more on Name, Image, and Likeness from INFLCR CEO Jim Cavale in his open letter here.
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