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Alabama Appears Poised to Repeal NIL Law

January 24, 2022 Insights

In an ironic twist, college football recruiting was the impetus for Alabama passing a 2021 law that legalized collegiate student-athletes receiving compensation for their names, images, and likenesses (“NIL Act”), and college football recruiting appears poised to be the impetus for Alabama repealing its NIL Act. 

On April 20, 2021, Alabama Governor Kay Ivey signed Alabama’s NIL Act into law.  Alabama Representative Kyle South (R-Fayette), who sponsored the NIL bill, said the NIL Act’s main purpose was to ensure Alabama universities were not at recruiting disadvantages compared to universities in states with similar laws.  Both Auburn University and the University of Alabama supported the NIL Act’s passage.  For a summary of the NIL Act, click here

After Alabama adopted its NIL Act, several developments occurred with consequential effects on the NIL Act’s meaningfulness: 

  • In the case of NCAA v. Alston, et al. decided June 21, 2021, the U.S. Supreme Court unanimously upheld a ruling by the U.S. Court of Appeals for the Ninth Circuit that, based upon antitrust grounds, struck down NCAA caps on student-athlete academic benefits.
  • Effective July 1, 2021, the NCAA adopted an interim policy allowing student-athletes to receive NIL compensation
  • On January 20, 2022, the NCAA, as largely expected, voted to ratify a new streamlined constitution that will reduce the NCAA’s responsibility and will overhaul rules at all levels of college sport, including stating that student-athletes “may not be compensated by a member institution for participating in a sport, but may receive educational benefits and benefit from commercialization through use of their name, image, and likeness.”

Based in part on the preceding developments, less than one year after sponsoring Alabama’s NIL Act, Representative South sponsored a new bill — House Bill 76 — to repeal the NIL Act.  The new bill recently passed the House chamber 97 to 1 and will go to Alabama’s Senate for approval.

While lobbying for the bill’s passage on the House floor, Representative South explained why the NIL Act’s repeal became important: “[The NCAA] passed a set of rules for their member institutions, and where we find ourselves is state rules were more restrictive than what the NCAA set forth….“.[1] South had said earlier that the NCAA’s decision to allow student-athletes to receive NIL compensation meant Alabama’s NIL Act was more restrictive, which prompted concerns that Alabama’s top-tier universities could be at a recruiting disadvantage.  “That’s kind of the gist behind [HB76],” Rep. South said.  “It may be the shortest-lived law on the books, passed one session and repealed the next.”

As they supported the NIL Act’s passage last year, both Auburn University and the University of Alabama support the NIL Act’s repeal. In a statement released January 21, 2022, the University of Alabama said its focus was on “its student-athletes best interests” and that it supports “appropriate solutions that enhance their opportunities for success.”  The statement went on to say, “Consistent with this approach, UA supports the passage of HB76 as a productive next step in a rapidly evolving landscape of name, image, and likeness issues….”.  Auburn University said in a statement that it “fully supports the broad opportunities for the success of our student-athletes,” and the “landscape with regard to NIL is constantly changing and as a result our state’s approach to it may need to change as well….”.

Bill Lawrence is a partner in Burr & Forman’s Birmingham, Alabama office and leads the firm’s NIL industry group.  For more information and resources about NIL, please visit https://www.burrsportslaw.com