As the Protect College Sports Act is on the cusp of passing the US Senate, public debate regarding its various provisions has only intensified. Issues such as conference realignment and preemption of states’ laws have been the subject of recent debate and amendments to the bill, and such discourse will continue if and when the US House of Representatives takes up this legislation.

Students as employees

For all the debate regarding the bill’s provisions, little has been said about the bill’s failure to address potentially the most important issues affecting the financial future of college athletics, the most significant being whether all or some student-athletes are or should be considered employees of their respective schools. This question is the subject of federal litigation in Johnson v. NCAA in the US District Court for the Eastern District of Pennsylvania, which was remanded from the US Court of Appeals for the Third Circuit after that court rejected the NCAA’s position that all student-athletes are nonemployee amateurs. Section 122 of the Protect College Sports Act states that the act is expressly neutral on the issue of employment status for student-athletes, meaning that Johnson and related cases may proceed.

If student-athletes are classified as employees, the economic realities and challenges surrounding college athletics change exponentially. Significant costs and considerations surrounding minimum wage, overtime, workers’ compensation, payroll taxes, and other such issues must be accounted for. Student-athletes as employees would fundamentally and radically upend the financial future of college athletics, and it is unclear how schools can evaluate the various provisions and costs/benefits of the Protect College Sports Act without knowing how that legal debate is resolved. 

Application of Title IX to revenue-sharing payments

Additionally, the Protect College Sports Act includes no provision for or reference to whether revenue-sharing payments are subject to Title IX regulations (i.e., whether they must be divided equally between male and female athletes). This has also been a hotly debated topic, as the executive branch at the end of the Biden administration and beginning of the Trump administration issued contradictory guidance/legal conclusions on this point. Litigation on this point has also been filed and is expected to continue into the future.

Title IX’s application to revenue-sharing payments would have significant impacts on not just a school’s future dealings but also its current operations. The overwhelming percentage of at least Football Bowl Subdivision universities are currently devoting a large majority of their revenue-sharing funds to their football and/or men’s basketball programs. If those funds must be divided equally or even close to equally with their female athletes, it would upend those schools’ current contracts with many football and basketball players, as well as planned future allocations and budgets. A court ruling or settlement on this point could also subject such schools to past damages relating to revenue-sharing budgets that have been divided unequally to date.

Impact on international athletes

Finally, the Protect College Sports Act includes no provision or discussion regarding whether international college athletes in the United States on F-1 visas may legally receive revenue-sharing payments. Such visas restrict students to receiving only “passive income” while in the United States. However, the federal government has provided no guidance as to whether name, image, and likeness-related or revenue-sharing payments would fit this requirement. If they do not, then any school contracting with an international student-athlete could be subjecting that student to deportation and relatedly could be subjecting itself to resulting claims from those athletes.

Takeaways

The Protect College Sports Act protects the NCAA and its schools in some very significant ways, not least of which is through an antitrust exemption. It would resolve or at least mitigate some significant legal and operational risks, and the bill could be viewed as a necessary first step in that regard. However, without clarity as to student-athlete employment or Title IX, it is unclear how any school could assess whether the economic playing field the Protect College Sports Act creates would truly benefit them. 

While its overall framework may appear appealing now, athlete-employees and strict Title IX application would completely upend the financial and operational realities of college sports once again (perhaps even more radically than the introduction of revenue sharing did). In addition, leaving the international student-athlete issue unresolved means that schools remain completely in the dark as to how and whether they can contract with such students. 

No matter what happens with the Protect College Sports Act in its current form, schools must brace for major continued legal and financial questions, risks, and challenges.

The 150-plus page legislation, intended to regulate the industry, passed the second of three procedural motions by a sweeping margin Thursday in the U.S. Senate, paving the way for its ratification as soon as next week.

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