Arizona’s New Legislation to Boost Student Athlete Compensation
In a landmark move, Arizona has broadened the avenues for universities and colleges to financially support their student athletes. This follows the approval of Senate Bill 1615 by Governor Katie Hobbs, a significant enhancement of the initial 2021 legislation permitting athletes to earn from their name, image, or likeness (NIL).
The new regulation, effective as of May 7, allows educational institutions to directly compensate athletes and collaborate with third-party entities to facilitate these payments. This development aims to address the lack of federal regulations on NIL, as highlighted by University of Arizona lobbyist Sabrina Vazquez. “So what we’re seeing now is states are putting in place their own laws and their own regulations,” Vazquez explained to lawmakers, emphasizing the need for Arizona to remain competitive in recruiting.
Senator T.J. Shope, the bill’s sponsor, believes this legislation provides Arizona schools with a “competitive balance, if not advantage” over others. However, the law includes strict guidelines, such as prohibiting athletes from entering contracts that conflict with team agreements or institutional codes of conduct. This is intended to prevent endorsements from entities like marijuana dispensaries or alcohol brands.
Significantly, SB 1615 aligns partially with a proposed NCAA settlement that would distribute $2.8 billion in back pay and permit direct payments from schools to athletes. Governor Hobbs enacted the law as Judge Claudia Wilken reviews this settlement currently under judicial consideration. However, Arizona’s statute extends further by enabling universities to organize “50/50 raffles” to generate funds for athlete compensation, a practice already utilized by professional teams like the Arizona Diamondbacks.
Moreover, the bill exempts negotiation records between institutions and prospective athletes from Arizona’s Public Records Law, a measure intended to protect recruitment strategies from rival schools. The absence of a $20.5 million cap on payments, which is part of the NCAA settlement proposal, also distinguishes the state law. Nevertheless, athletes must report NIL earnings exceeding $600 to comply with NCAA regulations.
While the legislation received bipartisan support, some, like Rep. Alexander Kolodin, voiced concerns about potential financial implications for students. Kolodin argued against using tuition funds for NIL payments, stating, “The cost of college has already gotten high enough… and the fact that we’re going to now compound that problem by paying what may be very significant, possibly multimillion-dollar salaries to student athletes and allow tuition money to be used for that, that’s something I’m not so cool with.”
The NCAA clarified that the proposed cap on payments is based on 22% of the average revenue from media, ticket sales, and sponsorships by leading Power Five conference schools. Arizona’s legislative move marks a pivotal shift in how student athletes can be compensated, setting a potential precedent for other states navigating the evolving landscape of college sports.
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