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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
AMENDED
student athletes; employment status; restrictions
Purpose
An emergency measure that outlines prohibitions and requirements on regulators, student athletes and postsecondary education institutions relating to the use of a student athlete's own name, image and likeness (NIL). Prescribes causes of action that may be brought in a court of competent jurisdiction for outlined violations relating to student athlete compensation. Allows a public university or an organization that has qualified for exemption from the taxation of income (nonprofit organization) that assists student athletes to earn compensation from NIL usage to conduct a raffle as prescribed.
Background
Any postsecondary education institution that competes in an intercollegiate sport must allow a student athlete to earn compensation from the use of the student athlete's own NIL to the extent allowed by the rules established by the relevant national association for promoting or regulating collegiate athletics.
A student athlete may not be denied a scholarship, have a scholarship revoked, be deemed ineligible for a scholarship or be deemed ineligible for participating in intercollegiate athletics based on earning compensation for the student athlete's NIL. Statute does not authorize a student athlete to enter into a contract providing compensation for the athlete's NIL if doing so violates the intellectual property rights of any person, including the student athlete's postsecondary education institution, or conflicts with the student athlete's team contract (A.R.S. § 15-1892).
Student athlete means an individual who engages in, is eligible to engage in or may be eligible in the future to engage in any intercollegiate sport. If an individual is permanently ineligible to participate in a particular intercollegiate sport, the individual is not a student athlete for purposes of that sport (A.R.S. § 15-1762).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Requirements and Prohibitions on NIL Compensation
1. Allows a postsecondary education institution that competes in an intercollegiate sport to:
a) compensate a student athlete for the use of the student athlete's own NIL; and
b) provide monies, assets, resources, opportunities, services or other benefits to an institutional marketing associate or third-party entity to incentivize facilitation for a student athlete to earn compensation for the use of the student athlete's own NIL.
2. Specifies that a postsecondary education institution may not use monies collected from student fees to pay for compensation.
3. Prohibits a student athlete who participates in an intercollegiate athletic program at a postsecondary education institution from:
a) executing a contract for the use of the student athlete's own NIL before disclosing the proposed contract to the student athlete's postsecondary education institution;
b) executing a contract for the use of the student athlete's own NIL if any provision of the contract conflicts with a provision of the student athlete's team contract, a postsecondary education institution's contract or honor code or an athletic department policy; and
c) using the postsecondary education institution's property to increase the student athlete's opportunities to earn compensation for the use of the student athlete's own NIL without first obtaining express authorization from the postsecondary education institution.
4. Requires a postsecondary education institution that determines that a student athlete has violated the outlined prohibitions on earning compensation to notify the student athlete in writing of the determination.
5. Prohibits a regulator from preventing a student athlete from fully participating in an intercollegiate athletic program because the student athlete:
a) earns a compensation for the use of the student athlete's own NIL;
b) earns compensation for the student athlete's position on the roster of an intercollegiate athletic program team; or
c) obtains professional representation from an athlete agent or attorney.
6. Prohibits a regulator from preventing a postsecondary education institution from:
a) compensating a student athlete for engaging in outlined activities relating to earning compensation;
b) sharing with student athletes the revenue that a postsecondary education receives for the commercial use of the student athlete's own NIL;
c) identifying, creating, negotiating with, facilitating, supporting, engaging with, assisting or otherwise enabling a student athlete to participate in an opportunity to receive compensation for the use of the student athlete's own NIL; and
d) becoming a member of any regulator that is a membership organization or participating in intercollegiate athletic programs that are sponsored by the regulator, because a student athlete who participates in a postsecondary education institution's intercollegiate athletic program engages in any of the outlined activities relating to earning compensation or obtaining representation.
7. Specifies that, for the purposes of the prohibition on preventing participation in an opportunity to receive compensation, a postsecondary education institution includes any supporting foundation or entity acting on behalf of the postsecondary education institution.
8. Prohibits a regulator from:
a) considering a complaint, initiating an investigation or taking any adverse action against a postsecondary education institution, institutional marketing associate or third-party entity for engaging in any outlined authorized conduct;
b) imposing a penalty against a postsecondary education institution or student athlete for a violation of the regulator's rules or regulations relating to compensation for the use of a student athlete's own NIL; and
c) preventing a postsecondary education institution or student athlete from participating in an intercollegiate athletic program for a violation of the regulator's rules or regulations relating to compensation for the use of a student athlete's own NIL.
9. Prohibits a postsecondary education institution that competes in an intercollegiate sport from:
a) considering whether a student athlete engages in one or more outlined activities relating to earning compensation when rostering or otherwise determining the level of participation that the postsecondary education institution assigns to each student athlete in an intercollegiate athletic program; and
b) considering a student athlete's outlined activities relating to earning compensation or obtaining representation when determining the student athlete's eligibility to receive or renew a scholarship.
10. Prohibits a postsecondary education institution from classifying a student athlete as an employee of the postsecondary education institution solely on the basis of the student athlete's participation in an athletic program at the postsecondary education institution or the student athlete's receipt of compensation as outlined.
11. Deems that records relating to a contract or proposed contract for the use of the student athlete's own NIL are not public records and are exempt from public records requests.
12. Deems information collected by a postsecondary education institution relating to a student athlete's contract to receive compensation for the use of the student athlete's own NIL as confidential and not subject to public disclosure.
13. Removes the specification that the compensation a student athlete may earn from the use of the student athlete's own NIL is to the extent allowed by the rules established by the relevant national association for promoting the regulating collegiate athletics.
Legal Remedies
14. Grants a cause of action, against a student athlete, to a postsecondary education institution to seek injunctive relief, if a student athlete does not correct an outlined violation within 10 days of notice of the violation.
15. Grants a cause of action against a postsecondary education institution, to a student athlete, to seek injunctive relief for a violation of the outlined requirements and prohibitions relating to earning compensation or obtaining representation.
16. Grants a cause of action, against a regulator, to a postsecondary education institution, institutional marketing associate or third-party entity to enjoin the regulator from taking any adverse action against the postsecondary education institution, institutional marketing associate or third-party entity for engaging in any outlined authorized conduct.
17. Specifies that adverse action includes considering a complaint, initiating an investigation or imposing a penalty.
18. Specifies that property includes facilities, equipment, apparel, uniforms and intellectual property, including logos, indicia, products protected by copyright, registered trademarks and unregistered trademarks.
19. Requires claims arising pursuant to this legislation to be brought in a court of competent jurisdiction.
20. Determines that an employee of a postsecondary education institution or third-party entity is not liable for a student athlete's inability to earn compensation for the use of the student athlete's own NIL because of a decision or action that routinely occurs in the course of intercollegiate athletic programs.
21. Specifies that the outlined requirements relating to the compensation of student athletes for use of the student athlete's own NIL do not affect the rights of student athletes under Title IX of the federal Education Amendments of 1972.
Raffle Authorization
22. Allows a public university or a nonprofit organization that assists student athletes to earn compensation from the use of a student athlete's own NIL to conduct a raffle if:
a) the public university or nonprofit organization maintains the outlined status;
b) a member, director, officer, employee or agent of the public university or nonprofit organization may not receive any direct or indirect pecuniary benefit other than being able to participate in the raffle on a basis equal to all other participants;
c) the public university or nonprofit organization has been in existence continuously in Arizona for a one-year period immediately before conducting the raffle; and
d) a person, except for a bona fide member of the sponsoring public university or nonprofit organization, may not participate directly or indirectly in the management, sales or operation of the raffle.
Miscellaneous
23. Defines postsecondary education institution as:
a) a university under the jurisdiction of Arizona Board of Regents; or
b) a degree-granting institution that is licensed by the State Board for Private Postsecondary Education.
24. Defines regulator as any organization with authority over one or more intercollegiate athletic programs, including an athletic conference and association for promoting or regulating collegiate athletic programs.
25. Defines institutional marketing associate as a third-party entity that enters into an agreement with a postsecondary education institution or the postsecondary education institution's intercollegiate athletic program or sports program to:
a) market or promote, the postsecondary education institution or the postsecondary education institution's intercollegiate athletic program or sports program; or
b) act on behalf of the postsecondary education institution or the postsecondary education institution's intercollegiate athletic program or sports program.
26. Defines third-party entity as an individual or entity, including an athlete agent, who is not a postsecondary education institution or a regulator and whose purpose includes supporting or benefiting the postsecondary education institution.
27. Specifies that institutional marketing associate does not include:
a) a postsecondary education institution;
b) a regulator; or
c) a staff member, employee, officer, director, manager or owner of a postsecondary education institution or regulator.
28. Specifies that intercollegiate sport does not include a college intramural sport or a professional sport outside of intercollegiate athletic programs.
29. Makes technical and conforming changes.
30. Becomes effective on signature of the Governor, if the emergency clause is enacted.
Amendments Adopted by Committee of the Whole
1. Outlines prohibitions on a student athlete earning compensation from undisclosed or conflicting contracts or from use of the postsecondary education institution's property.
2. Allows a postsecondary education institution to:
a) compensate a student athlete for NIL use; and
b) provide monies or other benefits to an institutional marketing associate or third-party entity to incentivize the facilitation of opportunities for a student athlete to earn compensation for NIL use.
3. Prohibits a postsecondary education institution that competes in intercollegiate sports from limiting or preventing a student from participating in athletics or earning a scholarship because the student athlete participates in outlined activities.
4. Expands and outlines prohibitions on a regulator preventing a student athlete or postsecondary education institution from engaging in authorized activities as specified.
5. Outlines causes of action that may be brought in a court of competent jurisdiction for specified purposes.
6. Requires a postsecondary education institution to notify a student athlete in writing if the postsecondary education institution determines that the student athlete violated the outlined requirements.
7. Removes the specification that the compensation a student athlete may earn from the use of the student athlete's own NIL is to the extent allowed by the rules established by the relevant national association for promoting the regulating collegiate athletics.
8. Removes the specification that participation in an intercollegiate athletic program does not affect the employment status of a student athlete.
9. Specifies that a postsecondary education institution may not classify a student athlete as an employee solely on the basis of the student athlete's receipt of compensation as outlined.
10. Determines that records relating to a contract or proposed contract for NIL usage are not public record, and that contract information is confidential and not subject to public disclosure.
11. Determines that an employee of a postsecondary education institution or third-party entity is not liable for a student athlete's inability to earn compensation because of a decision or action that routinely occurs in the course of intercollegiate athletic programs.
12. Specifies that this legislation does not affect the rights of a student athlete under Title IX of the federal Education Amendments of 1972.
13. Allows a public university or a nonprofit organization that assists student athletes to earn compensation from NIL usage to conduct a raffle if outlined conditions apply.
14. Defines terms.
15. Adds an emergency clause.
16. Makes technical and conforming changes.
Amendments Adopted by the House of Representatives
1. Prohibits a postsecondary education institution from considering whether a student athlete engages in outlined activities relating to earning compensation when rostering or determining the student athlete's participation in an athletic program, rather than limiting or preventing the student athlete from fully participating in the athletic program.
2. Makes technical changes.
Senate Action House Action
ED 2/12/25 DP 5-0-2 ED 3/25/25 DPA 11-1-0-0
3rd Read 3/13/25 26-1-3 3rd
Read 4/14/25 51-4-5
Prepared by Senate Research
April 14, 2025
MH/SDR/ci