Texas bill that would allow college athletes to sign lucrative endorsement deals passed an important hurdle

• A bill named SB 1385 was approved by the Texas state legislature on Thursday.
• The new law would allow college athletes to make money off of their name, image and likeness.
• Texas was in danger of falling behind other states in recruiting wars.

New legislation that allows college athletes to profit from their name, image, and likeness (NIL) was approved by the Texas state senate on Thursday.

SB 1385 is the eighth piece of proposed legislation at the state level to be approved to allow college athletes to profit off of NIL. Florida and Mississippi have already passed legislation that will go into effect as early as July 1. California passed a similar bill in 2019 that is not set to go into effect until 2023.

Alabama, Colorado, Michigan, Nebraska, and New Jersey have each proposed similar legislation. A federal ruling would render all state laws obsolete.

The laws would grant rights to athletes that are currently forbidden by NCAA policies, and violation of those policies would result in a student-athlete losing all eligibility to play.

The NCAA does have the option to sue the states who pass this legislation to prevent the laws from going into effect. However, the governing body of college sports is already entwined in a high-stakes legal battle. Alston vs. NCAA is currently being heard by The Supreme Court. It could open the door for even more lawsuits against the NCAA for denying revenue to college athletes if the court rules against the association.

The Texas bill, SB 1385, was approved in a 9-0 consensus by the senate. Republican senator Brandon Creighton authored the bill, with support from senators César J. Blanco, José Menéndez, Borris L. Miles, Charles Schwertner, Royce West, and Judith Zaffirini as co-authors.

"The biggest winner in this needs to be all of the student-athletes," Menéndez told Kate McGee of The Texas Tribune. "We gain entertainment. Universities gain revenue, and they need to share in that because of their hard work."

The bill is now set to be voted on by the Texas House. If the House approves it as well, it will go into effect on Sept. 1. That would make the policy changes and the business opportunities it would open available to all college athletes in Texas just in time for football season.

This bill has changed the value of Texas on the business radar of MarketPryce, a startup service dedicated to connecting athletes at all levels with endorsement partners. MarketPryce founder Jason Bergman told Insider that he would be prioritizing relationships with universities in Texas going forward.

"I'm going to target all NCAA universities in Texas because I'm sure that's what other businesses in our space will be doing," Bergman said. "We want to get in our name early to empower all college athletes in Texas to benefit from this legislation."

Bergman believes the scale of Texas's presence in the college sports landscape will set a competitive tone and force colleges and states in the country to this point to pursue their own laws to stay competitive in terms of revenue and recruiting.

"I've spoken with tons of major Universities, and nearly all of them want to "wait and see" what others are doing when it comes to NIL," Berman said. "Texas is quite possibly the most influential state there is when it comes to NIL legislation. No state has more Universities than Texas, so other states will look at this and say that they need to have their own legislation in place by Sept. 1 to compete."

Several bills at the federal level to approve college athletes profiting off of NIL have been proposed. These include Rep. Anthony Gonzalez's "Student Athlete Level Playing Field Act," Sen. Cory Booker's College Athletes Bill of Rights, and Sen. Chris Murphy's "College Athlete Economic Freedom Act."

The frequent argument against each proposed bill is how NIL endorsements could distract college athletes from athletics and academics. They would also open up avenues for entrepreneurs to take advantage of undereducated athletes from less financially literate backgrounds.

Former NBA player and ESPN, CBS Sports, and Fox Sports analyst Len Elmore currently co-chairs the Knight Commission on Intercollegiate Athletics - a panel dedicated to reform in collegiate athletics with an emphasis on athletes' rights. He is an advocate for student-athletes profiting off of NIL but is wary of the risks to athletes involved.

While services like MarketPryce sell themselves as a means for college athletes to create marketing partnerships, Elmore agreed there is a risk of being exploited by marketers. Additionally, college programs and boosters using NIL opportunities as a recruiting tool is another danger that Elmore believes could compromise the integrity of college sports.

"That's why you need the guard rails; you need the rules that are going to prohibit the institutions from being involved so that they can't use it as a recruiting tool," Elmore said. "The reason for compensation for name, image, and likeness, has to be based upon their popularity, based upon the marketplace that is desirable for having that athlete involved as opposed to artificially propping up the price so that you can recruit that athlete from somebody else."