Utah could get its first NIL law — with an eye toward more perks for donors

Under a proposed bill, NIL collective donors would be allowed to receive additional benefits, such as loyalty points, for contributions.

(Bethany Baker | The Salt Lake Tribune) Ute athletes rush towards a 2024 Jeep Grand Cherokee as the Crimson Collective unveils brand new vehicles for Ute athletes on the womenÕs gmnastic team and the menÕs and womenÕs basketball teams at the Jon M. Hunstman Center in Salt Lake City on Wednesday, Dec. 13, 2023.

A bill proposed for the 2024 Utah legislative session aims to create a statewide policy for collegiate student-athletes when it comes to profiting off their name, image and likeness (NIL) and incentivize donors with benefits for giving money to NIL collectives.

Rep. Jordan D. Teuscher, R-Salt Lake, is sponsoring HB202, which outlines what would and would not be allowed by student-athletes and universities in regard to NIL. It’s also designed to give donors a path to receiving perks for helping collectives get better and more lucrative deals for student-athletes.

Teuscher said several NIL collectives reached out to him with concerns that donors felt they weren’t getting enough bang for their buck.

“One of the gaps that they saw is that a lot of donors wanted to get booster credit for the donations that they were making to the collectives,” Teuscher told The Salt Lake Tribune, “so that they could get ... some sort of personal benefit beyond just altruistically wanting the teams to perform better and being able to pull in better athletes.”

Specifically, the bill states that it would not limit or prevent “a collective from creating a loyalty points program to recognize or provide benefits to donors.” Teuscher, the vice chair of the House Rules Committee, said any such program would need to be agreed upon by the universities and collectives.

The bill would add language to existing state law that governs how collegiate institutions operate.

The state of Utah does not currently have its own law dictating NIL policy, and has been going by the NCAA’s standards since the governing body relaxed its NIL rules in 2021 with an interim policy.

The bill’s language details what has largely already been put in place by universities. Athletes are not employees of their universities. They can profit off their name, image and likeness by making deals by promoting businesses, products or services, and they can do so by using social media accounts or other platforms such as commercials. They can sell their autographs, too.

When student-athletes are promoting something, they wouldn’t be allowed to display their school’s uniforms, logos or other identifying insignia, the bill states.

Athletes would be prohibited from promoting something affiliated with tobacco or e-cigarettes, alcohol or gambling, the bill states. They also couldn’t violate existing university policies.

Teuscher said that in order to create the ability for donors to benefit from giving to NIL collectives, it made sense to establish a framework for an NIL policy.

“What we were trying to do was just put in statute what the current situation is in alignment with NCAA rules and what the different universities have done,” Teuscher said.

NIL collectives — like the Crimson Collective at Utah, the Royal Blue Collective and CougConnect at BYU — funnel money from donors or businesses to athletes. They can even negotiate NIL contracts for the athletes through themselves or their agents. What they’re not allowed to do, however, per the NCAA, is get directly involved in recruiting.

In May 2022, the NCAA updated its NIL policy to include language about “third parties involved in the recruiting process,” and ruled that those third parties met the definition of a “booster.” Boosters, per NCAA rules, are strictly prohibited from getting directly involved with current student-athletes, recruits and transfers in order to prevent a “pay-to-play” situation.

HB202 also outlines that a student-athlete would need to disclose an NIL deal to the university, and that the student-athlete and business would need to “comply with state licensing requirements” as well as the school’s policies and procedures.

If a student-athlete’s potential NIL deal conflicts with any of the aforementioned criteria or others outlined in the bill, the university must contact the student-athlete or their representative in writing within seven days. After that, the student-athlete or their representative has 10 days to resolve the conflict.

Teuscher said he’s heard from other lawmakers who would like to see other provisions added to his bill, one example being whether to make NIL deals public. He contends that the new law would be of ultimate benefit to student-athletes.

“My whole intent with this whole thing is just making sure that our athletes are not at any disadvantage because we haven’t clarified anything in our state law,” Teuscher said. “If we don’t need to clarify anything, I’m totally fine with that. But that’s kind of the process we’re working through.”