Athletes at the University of Colorado Boulder are closer than ever to being directly paid by the university.
Colorado lawmakers advanced a bill last week that would grant universities the ability to compensate student-athletes for their name image and likeness. House Bill 1041, which comes as schools prepare for the landmark House v. NCAA settlement, has faced opposition over its exemption of student NIL contracts from public records laws.
Under current state law, universities can help athletes get NIL contracts, but direct payment is prohibited. That ban is in line with long-standing NCAA rules that are on the way out. The House settlement, which is expected to be finalized in April, will allow universities to dole out up to $20.5 million each year to their student-athletes.
The bill's primary sponsors are former CU Regent Rep. Lesley Smith, D-Boulder, and Senate President Sen. James Coleman, D-Denver.
“Many other states already have or will have updated NIL laws to match NCAA rule changes. Colorado must follow to remain competitive nationally,” Smith said before the House Education Committee, on Jan. 29.
The bill would exempt student athletes’ NIL contracts from the Colorado Open Records Act. Under CORA, all public employee contracts, including coaches like Deion Sanders, are available to the public.
Smith cites the Family Educational Rights and Privacy Act (FERPA) for that decision.
“For me, the most important aspect of this is that these are student-athletes, and they are not employees,” Smith said. “Because they’re students, I believe their student records, including contracts, should be protected under FERPA.”
Eric Maxfield, an attorney and board member of the Colorado Freedom of Information Coalition, testified against the bill in the same hearing. He argued that FERPA would not apply to the NIL contracts.
“FERPA was designed to protect students from misinformation held by universities,” Maxfield said. “[FERPA] is not in place to protect student correct information and especially student information that’s not about their education. Not designed to protect contracts that involve the expenditure of public funds from the public.
Smith stated that the athletic department is an auxiliary fund: “They generate their own money through fees and such to provide their services. No taxpayer dollars are going toward these budgets.”
While Universities will not be paying student-athletes with revenue from tuition or tax dollars, the NCAA House Settlement references revenue sharing from areas such as ticket sales, which do come from private citizens.
Tim Regan-Porter, the CEO of the Colorado Press Association, testified that even private NIL contracts are intertwined with public institutions.
“Public institutions must remain accountable regardless of the funding sources and allocation,” Regan-Porter said in testimony. “Without transparency, the risk of abuse increases.”
Along with general concerns over university accountability, concerns over Title IX compliance come to the forefront. At the time of the hearing, the Biden administration had released guidance that Title IX would apply to NIL. On Wednesday, Feb. 12, the Trump administration revoked that guidance.
Smith said she’s aware of concerns about gender equity with the NIL payments and recalled her time as a CU regent and as part of the Gender Equity Task Force.
“I was very impressed at the level of commitment [CU Athletic Director Rick] George and the department take to heart in terms of gender equity,” Smith said.
George also testified in support of the bill. He suggested having public NIL contracts be public would add another level of scrutiny and pressure on student-athletes.
“[CU is] one of the most visible programs in the country,” George stated. “There’s already a ton of scrutiny on our student-athletes where it impacts their mental health.”
That transparency clause was amended, it now states any “personally identifiable information” would be restricted from public record. This includes a student-athlete’s name, address, email address, telephone number or financial information. Additionally, a section was added that will require schools to release reports of the amount of NIL funds each sport receives.
The bill passed the Colorado House of Representatives Tuesday and now heads to the Senate.
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