Off the Kuff

Interesting. I need to hear more about this.

Seven universities in Texas have been ordered by the state’s attorney general not to sign the College Sports Commission NIL participation agreement.

On Nov. 25, Texas AG Ken Paxton sent out a letter to Texas Tech, the University of Texas, Texas A&M, Baylor University, University of Houston, Southern Methodist and Texas Christian urging them not to sign the CSC agreement, stating numerous issues with the agreement.

“As the chief legal officer for the State of Texas, whose duties include providing advice, counsel, and legal representation to Texas public universities, I am particularly interested and gravely concerned by the wide-ranging implications entering into such an agreement portends for our state and its institutions,” reads the letter.

For context, the 11-page university participant agreement would bind SEC, ACC and Big 12 schools to the terms of the House v. NCAA settlement and to the enforcement decisions of the new CSC, which stipulates that they waive their rights to contest whatever sanctions or rule changes the commission would make in the court of law.

This sparked the attention of mega donor and chairman of the Texas Tech University System Board of Regents, Cody Campbell, who said Texas Tech would not sign the agreement, arguing to the rules are not in compliance with Texas state Laws and university bylaws.

“We will eagerly and fully engage in conversation aimed at finding a legal and workable solution, and I will personally commit to facilitating such discussions,” Campbell said in a social media post.

Cody Campbell is the billionaire Texas Tech booster who’s responsible for all those Save College Sports ads. I’ll get to what this agreement is about in a minute, but first here’s more from Yahoo Sports.

In the letter, Paxton expresses that he is “gravely concerned” about the implications of the agreement and “urges” Texas universities to decline signing. He identifies several reasons that schools should not sign the document, including the requirement to waive legal action, the CSC’s over-extension of authority to penalize programs without a legitimate option for appeal and the concept of schools acquiescing to “unnamed policies.”

Perhaps most notably, Paxton targets the agreement’s notion of arbitration. The agreement provides schools an avenue of arbitration in exchange for not filing legal challenges against the College Sports Commission. However, Paxton writes in his letter, Texas public universities are prohibited by state law from agreeing to arbitration.

“CSC clearly seeks to coerce compliance with its rules and limit a (school’s) means of redress if dissatisfaction arises for any reason,” he writes in a letter that was expected to be distributed to other state attorneys general as well.

The letter follows pushback on the participation agreement from the Texas Tech general counsel, who, in a letter distributed across the Big 12 over the weekend, implored changes to the agreement and recommended the Tech board reject the document. Several other universities — especially private schools — have privately expressed intentions not to sign the agreement without modifications.

The CSC’s agreement was distributed to schools last week and universities were expected to have about two weeks to sign. The pushback now puts in jeopardy the future of college sports’ new enforcement entity and could keep open the door for schools to circumvent the new quasi-salary cap in college athletics.

Without legal protection — or a congressional bill — lawsuits threaten to erode the CSC’s new policies in a similar way to the crumbling of NCAA rules and regulations.

Congress is on a path to potentially help college sports. As soon as next week, congressional lawmakers in the House of Representatives are expected to vote on the SCORE Act, the college sports legislation that grants the NCAA and conference wishes of legal protections to enforce their rules. However, the SCORE Act, though expected to pass the House, will be met with resistance in a U.S. Senate where at least seven Democrats are needed for adoption of the bill.

Again, Cody Campbell is spending all that ad money to oppose the SCORE Act; he favors instead the mostly Democrat-backed SAFE Act. I’m just trying to keep up here.

So what is the College Sports Commission’s NIL agreement? Here’s ESPN from two weeks ago.

The College Sports Commission — the new enforcement agency of college sports — has asked all schools under its purview to agree to waive their right to challenge future punishments in court as part of an agreement that would give the agency significant power to investigate and punish rule breakers in the era of NIL deals and direct athlete payments.

The CSC, which launched in July, sent a 10-page membership agreement to all power conference schools Wednesday afternoon and asked them to sign it in the next two weeks. The terms of the agreement are designed to close loopholes that have made it difficult for the NCAA and CSC to enforce rules established by the recent House settlement that dictate how college athletes can be paid.

The agreement will not go into effect unless every school signs.

“The starting place in all this is the settlement, but the participant agreement really puts a lot of meat on the bones of that in terms of enforcement,” CSC chief executive Bryan Seeley told ESPN on Wednesday.

The House settlement allows each school to spend up to $20.5 million this year in direct payments to its athletes. It also empowers the CSC to make sure any name, image and likeness deals an athlete signs with a third party are for a “valid business purpose” rather than a recruiting incentive. College sports leaders hope that the CSC is able to use its authority to enforce a spending cap that prevents the richest schools from gaining too much of a competitive advantage.

Schools that sign the agreement will waive their right to challenge any CSC rulings in a courtroom. Any appeals of a CSC punishment would instead go through an arbitration process that was agreed upon as part of the House settlement.

The schools must also agree that they won’t try to encourage or assist any other parties — their state’s attorney general, for example — to file lawsuits against the CSC. Any school violating that rule would lose at least one year of revenue from its conference and miss at least one year of postseason play in any sport involved in the dispute.

Many of the rules that govern college sports are susceptible to legal challenges because they aren’t backed by the collective bargaining agreements that provide stability to professional sports leagues. Seeley said college sports leaders are searching for a solution that will keep their peers from exploiting that weakness by filing a lawsuit when they face a potential punishment.

“[Schools] do not want to live in a world where rules are made by individual state lawsuits,” Seeley said. “They don’t want the rules to depend on what state you’re in and what judge you may be in front of. In any individual situation where a school is disciplined, the school may have an incentive to [file a lawsuit] to get out of discipline. But collectively, the schools don’t want that.”

However, many of the key clauses of the agreement apply only if they don’t conflict with a school’s existing state law.

Several states have laws that prevent public institutions from resolving disputes via arbitration. Other states have passed specific college sports-related laws in recent years that contradict some of the CSC’s rules. Seeley said a federal law that replaces those state laws would likely be necessary to completely fortify the new rules from legal challenges.

And here’s CBS Sports.

It has been months in the making and delayed, in part, over disagreements on what a penalty structure should look like. The hope is that all of the Power Four schools will sign it and turn it back in within the next two weeks, a critical time period with the early signing period starting Dec. 3 and the transfer portal window opening Jan. 2.

The 11-page participation agreement obtained by CBS Sports allows the CSC to enforce agreed upon rules, prevents schools from circumventing the system to sue over enforcement decisions they didn’t like (long a problem in the NCAA enforcement model) and requires annual audits of all schools that spent 75 percent or more of the annual rev-share number, among other measures. Notably, it states that it does not override existing state laws.

The piece most critical to CSC CEO Bryan Seeley and his team would prevent schools from pursuing jury trials outside of the CSC enforcement and appeal process. There are arbitration opportunities for the schools and student-athletes, but ultimately every participating school will be bound by the final decisions made. Led by Seely, the CSC was created to enforce revenue-sharing and NIL-related issues in the aftermath of the landmark passing of the $2.8 billion House settlement.

The document states that if any participant (student-athlete, school or associated entities or state officials) brings any suit or claim against the CSC related to membership rules, investigation or enforcement actions, it would “forgo and not receive any and all revenue from its conference and not be eligible to compete in the post-season in the sport(s) involved in the investigation or decision.”

Conference commissioners, athletic directors and others hope all 68 Power 4 schools will sign off on the agreement and bring stability to a landscape where litigation — or the threat of it — has made it nearly impossible for the NCAA to enforce rules, from NIL to eligibility and everything in between.

Once the agreements are signed, Seely and his team will have the runway to crank up the enforcement efforts and prevent salary cap circumvention, among other issues. Currently, every school that opts into the House settlement is able to spend up to $20.5 million annually on direct payments to student-athletes.

Ahead of the House settlement, many programs turned to a popular strategy known as “front-loading,” spending as much of their NIL dollars as possible before entering a world where every deal of $600 or more must be submitted to and reviewed by the NIL Go clearinghouse. With the CSC unable to enforce its rules so far, some within the industry have discussed continuing to spend significant NIL “pay-for-play” money without making it subject to NIL Go’s fair-market-value review.

Here’s the CSC’s own website if you want to know more. At this point what I know is that there’s a lot of money, some of which is intended to go to athletes, a new bit of bureaucracy set up to regulate how that money can be spent and to enforce penalties for infractions, some rich guys who don’t like this, and Ken Paxton, who is never to be trusted but who occasionally does things that are at least directionally correct.

You can see why one’s head might be spinning right about now. As I drafted this, I did not see any indication that other AGs or state governments have taken similar action, but it’s early days. I don’t know enough about this to have a clear idea of where my sympathies should lie, but this is a sufficiently provocative action that I expect to see that void get filled. I’m sure the likes of Kirk Bohls and other college football knowers will have their takes soon enough. For now, at least we know this has happened. Thanks to Reform Austin for the catch.