FRANKFORT, Ky. (LEX 18) — The athletic directors of the University of Kentucky and the University of Louisville urged Kentucky lawmakers to modernize the state's Name, Image, and Likeness (NIL) laws on Thursday.
Why the need for change? Because of a national change that could soon be coming.
Senate Republican Floor Leader Max Wise explained that Senate Bill 3 is in response to the anticipated settlement in one of the anti-trust lawsuits against the NCAA.
"The recent House v NCAA lawsuit has introduced potential changes that could reshape student-athlete compensation," he told the Senate Education Committee.
"Without proactive legislative action, Kentucky's universities risk falling behind," he added.
If the settlement in House v NCAA is finalized, it could allow schools to directly compensate student-athletes. Schools would be able to allocate up to $20-22 million annually in revenue-sharing. A $2.576 billion fund would also be used to retroactively compensate athletes.
Universities directly compensating their student-athletes is not currently covered by Kentucky's NIL laws.
Mitch Barnhart, the athletic director at UK, stressed the urgency of the situation, stating, “We have to be ready now."
"Our staffs - it's important to give them time to prepare," he added.
Schools in other states are rushing to prepare for the potential change as well. If Kentucky were not to modernize its NIL laws, Kentucky's universities would be put at a disadvantage, according to Barnhart.
"It would be difficult, and we want to make sure we're not putting our coaches in that position," he said. "And more importantly, we're not taking opportunities away from our young people."
SB 3 would be an asset to Kentucky's universities as the college sports landscape once again changes, according to Josh Heird, the athletic director at the University of Louisville.
"When our coaches are having those conversations about attending the University of Louisville or the University of Kentucky - it's like 'hey, we're ahead of everybody else so you're going to get A, B, C, A, and E. And we know that beyond a shadow of a doubt.' Whereas [if] you go somewhere else, they may have to say, 'we don't know yet, we're working on it,'" said Heird.
Some lawmakers on the Senate Education Committee expressed conflict in supporting the bill. They worry NIL and the transfer portal are ruining college sports.
“I’ve lost interest in college sports because of it, and it’s difficult for me to vote yes for this, and I regret the vote that I made, but in saying that, I also know that Kentucky has to compete, and I know that there’s millions and millions of dollars involved in this investment and return,” Sen. Danny Carroll said.
Some lawmakers expressed hope that by allowing schools to directly compensate their athletes, it could curb the "constant movement" using the transfer portal.
Barnhart and Heird expressed hope that the national settlement would create some NIL guardrails to prevent athletes from using the transfer portal as leverage.
What does SB 3 do exactly? According to Wise, the legislation:
- Aligns state law with national fair market value standards to keep Kentucky competitive in recruiting and retention.
- Authorizes direct compensation agreements between universities and student-athletes, allowing participation in the expected NCAA settlement.
- Permits sublicensing of NIL rights, expanding earning opportunities for student-athletes through third-party agreements.
- Establishes contract protections to safeguard athletes in NIL agreements.
- Includes an emergency provision, ensuring immediate implementation upon passage.
