Sports Law Team Authors Law360 Expert Analysis on CAEFA and Ted Cruz’s Draft NIL Bill

Phoenix, Ariz. (September 19, 2023) – Phoenix Partner and Chair of Lewis Brisbois' Collegiate & Professional Sports Law Practice Gregg E. Clifton and New York Associate Christina Stylianou recently penned the second installment of a two-part Law360 Expert Analysis series regarding proposed federal name, image, and likeness (NIL) legislation. The article, titled, “The NIL Legislation Race: CAEFA And Ted Cruz's Draft Bill,” details the College Athlete Economic Freedom Act (CAEFA) and Senator Ted Cruz’s fourth discussion draft of a potential NIL bill. The first installment of the two-part series discussed the College Athletes Protection and Compensation Act (CAPCA) and the Protecting Athletes, Schools, and Sports Act (PASS Act).

The authors open the second installment of the series by briefly comparing CAEFA with CAPCA and the PASS Act, noting, “CAEFA focuses almost exclusively on NIL and is the most athlete-friendly bill of the three proposals.” They further explain that CAEFA prohibits the NCAA, conferences, and universities from preventing athletes from entering NIL deals, except where the parties have negotiated a specific restriction as part of a collective bargaining agreement. In addition, the CAEFA proposal – introduced by Senators Chris Murphy and Lori Trahan – would also forbid universities, conferences, and the NCAA from colluding with other universities or third parties to cap the amount of payment to athletes under an NIL contract, unless the limitation was negotiated with a collective representative. After describing various other elements of the CAEFA proposal, Mr. Clifton and Ms. Stylianou note that the proposal “is not expected to succeed, given the lack of bipartisan introduction and the wide disparity in views on NIL and intercollegiate athletics contained in its current form.”

Next, the authors review Ted Cruz’s discussion draft, observing that “it supports the goals of the NCAA and the NCAA-friendly side of the spectrum,” as compared to the other proposed legislation. They explain that the draft provides that “universities, conferences and the NCAA may restrict an athlete's eligibility to compete if the athlete enters an NIL agreement that violates the university's student code of conduct, ‘reasonably impacts’ the school's reputation or public image, or conflicts with the terms of an existing contract or agreement binding the university.” Mr. Clifton and Ms. Stylianou also describe the elements of Senator Cruz’s discussion draft that address athletes’ contract disclosure responsibilities and requirements for NIL contracts to be deemed valid. They point out that, “Despite Cruz's influence in the Senate, the draft is not expected to enjoy popularity or to be successful if the decision is made to formally introduce it in its current form, given the single-party representation of its sponsor and the wide disparity in views on NIL and intercollegiate athletics across party lines.”

The authors close the article with a reminder that the PASS Act, CAEFA, and the Student Athlete Level Playing Field Act (SALPFA) are the only candidates for federal NIL law at this time because they have been formally introduced to Congress. The authors note, however, that other circulated drafts “may still bear some influence even if not ultimately introduced. . . .”

Mr. Clifton is chair of Lewis Brisbois' Collegiate & Professional Sports Law Practice, and a member of the firm’s Entertainment, Media & Sports and Labor & Employment Practices. He has extensive experience in the collegiate and professional sports world and has advised numerous professional franchises on a range of labor and employment issues, including Title III ADA regulatory compliance and wage and hour issues. Mr. Clifton is also an editor of The Official Review, Lewis Brisbois’ sports law blog.

Ms. Stylianou is a member of Lewis Brisbois’ General Liability and Entertainment, Media, & Sports Practices. She regularly represents clients in a variety of professional and collegiate sports and entertainment matters, including contract-related matters, intellectual property matters, workers’ compensation and injury, Title IX issues, among others. In addition, Ms. Stylianou frequently writes for Lewis Brisbois’s sports law blog, The Official Review, and also handles New York State labor law as well as general liability matters.

Read the full Expert Analysis on Law360 here (subscription may be required).