Bill passes to legalize school payments to Texas student athletes

New bill may allow payments to Texas student athletes

A bill that opens the door for universities in Texas to pay college athletes is headed to the governor?s desk. For decades, the NCAA has forbidden schools from paying athletes directly. But that firewall appears to be crumbling.

DALLAS - A bill that opens the door for universities in Texas to pay college athletes is headed to the governor’s desk.

For decades, the NCAA has forbidden schools from paying athletes directly. But that firewall appears to be crumbling.

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Jahdae Barron #23 of the Texas Longhorns celebrates after tackling Wyatt Wieland #11 of the Wyoming Cowboys in the second half at Darrell K Royal-Texas Memorial Stadium on September 16, 2023 in Austin, Texas. (Photo by Tim Warner/Getty Images)

What we know:

Since 2021, college athletes have been able to receive payments for their name, image, and likeness from companies and boosters.

House Bill 126 opens the door for Texas universities to directly pay their athletes as well. 

It passed in the Texas House and Senate this week.

Dig deeper:

In a few months, universities are expecting a judge to approve a lawsuit settlement against the NCAA involving payments to college athletes nationwide.

The nearly $3 billion settlement would send millions to each Division I school for direct payment to athletes.

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NCAA and major conferences agree to $2.8 billion settlement for athlete compensation

The $2.8 billion settlement will allow college athletes to receive direct payments, potentially starting by fall 2025, marking a significant shift towards professional-like compensation and ending the NCAA's long-standing amateurism model.

It’s retroactive to 2016, meaning athletes who competed before NIL became legal are eligible for back pay.

HB 126 changes Texas law, which currently does not allow colleges to pay athletes directly.

So even if the settlement was approved tomorrow, Texas athletes still would not be eligible to receive money without HB 126 changing the law.

What they're saying:

University officials warned the Senate in a call this week that Texas will be at a disadvantage if the law is not changed quickly.

"Because that final order on NIL settlements that are already in place will not be issued by a judge until the fall, we are considering this legislation to make sure after session that we’re in compliance with that settlement," said State Sen. Brandon Creighton. 

College recruiting happens well before students graduate from high school. So, the new law does have an amendment saying students 17 and older can only start receiving NIL funds once they are actively participating in college.

"We are creating some common sense by amending it, making sure that no athletes under 17 years of age will be eligible for an NIL agreement. And from 17 and older, no athletes in high school can receive any money under an NIL agreement until they’re enrolled in college and participating in the program that they agreed to participate in," Creighton said.

What's next:

If Gov. Greg Abbott signs the bill, it will take effect on Sept. 1.

It’s not clear exactly when the judge in the NCAA case will give final approval to the settlement, but it is expected to happen sometime this fall.