Here's an example of the development of regulations.
A new market has developed based on the transfer portal and NIL (name, image, and license) rights. Agents have popped up since there are no rules regarding who can and cannot represent student athletes. That might change as calls have emerged to create rules and regulations.
One might assume that the agents know more about these licenses and the overall market than college athletes. If so, regulations would address market failure, in this case uneven information.
It might be interesting to see if Texas is considering putting regulations in place
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When the NCAA started allowing athletes to profit off their names, images and likenesses on July 1, 2021, tens of thousands of college students became potential clients for sports agents or “sports agents” overnight. It didn’t matter that no one knew how the market would work. What mattered was that a market existed at all.
While schools and collectives can try to screen who represents their athletes, most states don’t require NIL agents to disclose their relationships or contracts with clients. Unlike in major professional leagues, there’s also no players association to standardize the requirements to be an agent, nor is there a collective bargaining agreement because college athletes are not considered employees (yet). The NCAA does have a certification process for agents looking to represent athletes ahead of the NBA draft. As for NIL specifically, the NCAA has pitched a voluntary registration system for agents, allowing athletes to view them in a centralized place and rate their experience for others to see. This is a small sliver of a larger proposal for student-athlete NIL protection that will be voted on in January.
“The qualifications for being an NIL agent are the same as being a quote-unquote NFL draft expert,” said Neil Stratton, founder of Inside the League, which offers services to NFL scouts, agents and players preparing for the draft. “You declare yourself one.”
That’s not to say every NIL agent is a rogue actor. Far from it, actually. Major agencies such as CAA, WME and Excel, among others, now have NIL wings. Many people with backgrounds in marketing or branding have registered through the proper channels and educated themselves on the space. Or take Jack Adler, a recent Syracuse graduate who started as an NIL agent while in school, then grew his company, Out2Win Sports, into a legitimate sports marketing firm with a long list of clients.
But that still leads to another question: What might more regulation even look like?
