Hank's IP Brew — Issue #17

Howdy, y'all.

This week: Nick Saban testified before Congress about the future of college sports — and buried inside the bill he's backing are some provisions that should matter to everyone working in NIL. Plus, musicians whose recordings actually trained the AI models that are now replacing them just found out that their labels settled with Suno and Udio, pocketed the money, and gave them nothing. There's a lawsuit now.

Let's get into it.

On June 3, the Senate Commerce Committee held a hearing on the proposed Protect College Sports Act — the Cruz/Cantwell bill we first covered in Issue #16 — and Nick Saban showed up to testify in favor of it.

That's not a ceremonial appearance. Saban is the most decorated college football coach in history, and his presence at a Senate hearing signals something: the power brokers who built the current college athletics system have concluded that federal legislation is better than the alternative. Without it, as SEC commissioner Greg Sankey acknowledged the same week, "there is more fracturing because conferences will have to make decisions." The current landscape — where every state has its own NIL rules, enforcement is patchy, and the wealthiest programs keep finding new ways around the House settlement's revenue-sharing cap — is unsustainable for everyone, including the people at the top.

The still-under-debate Protect College Sports Act is now the most serious attempt at federal college sports legislation in years. Here's what it would actually do for the people signing NIL deals.

What the bill does for athletes

The Act would create a federal NIL right, replacing the current patchwork of 50-plus state laws with a single national standard. That means an athlete at a Texas school and an athlete at a Washington school operate under the same rules — and a brand running multi-market campaigns deals with one framework instead of dozens. That's genuinely useful for everyone.

Agent fees would get capped at 5%, and agents working with college athletes would need to be certified by a new national body. If you've read about athletes locked into predatory representation contracts before their NIL value was established, this provision is a direct response to that.

Schools would also be required to cover sports-related medical costs for five years after an athlete's final competition — something that didn't exist before.

What the bill does to deal structures

Here's where brands and collectives need to pay attention. The bill strengthens the College Sports Commission's enforcement authority over third-party NIL deals — specifically targeting the loopholes that have let schools route pay-for-play money through multimedia rights partners and corporate sponsors. The "associated entity" classification, which determines whether a third party's NIL deals are subject to the revenue-sharing cap, would get written directly into statute.

Regular readers know we've been tracking the CSC's enforcement battles with companies like Playfly and Learfield. What's been decided case by case in arbitration, Congress is proposing to codify. If this bill passes, those classification fights won't have to happen one athlete and one arbitrator at a time.

The bill also grants the NCAA limited antitrust protection to enforce rules on transfers and third-party deals — handing back some of the authority that was systematically eroded by antitrust litigation over the past decade, but in a restructured form with athlete protections built in.

The bottom line

Commerce Committee hearings are now underway. This is still legislation, not law — resolution is months away at minimum. But the bipartisan structure, White House support, and Saban's testimony make this the furthest a college sports reform bill has gotten in a long time.

If you're signing NIL deals right now, the fundamentals are unchanged. But the statutory landscape these deals will operate in is actively being rewritten. Pay attention to how the "associated entity" provisions develop. That's where the compliance picture for brands will be determined.

When Universal Music Group and Warner Music Group sued Suno and Udio in 2024, they framed it as fighting for artists. "We will not stand by and allow our artists' work to be used to replace them," UMG CEO Lucian Grainge declared. The rhetoric was clear: the labels were going to battle on behalf of the musicians whose recordings had been vacuumed up to train AI models without permission.

Then both labels settled.

UMG announced a settlement and licensing partnership with Udio in October 2025. Warner followed in November — first settling with Udio, then becoming the only major label to also settle with Suno. The settlements came with financial terms that were not disclosed. The musicians whose actual performances are embedded in those AI training datasets received nothing.

On June 6, the American Federation of Musicians filed a federal lawsuit to do something about that.

What the AFM is alleging

The complaint is direct. UMG and WMG, the AFM argues, "protected their own interests and created a significant source of new revenue with the retrospective settlements and prospective licenses" — then "refused to compensate the musicians whose work, created with their own instruments and through their talent, creativity, and hard work, is fed into AI machines for profit."

The labels' standard recording contracts don't include a specific provision for AI licensing revenue. The AFM says that's no excuse. The musicians' performances are what's actually in those AI models. The labels got paid for the use. The performers should share in that.

The AFM's complaint also contains a pointed observation: in settling, UMG and WMG agreed to allow Suno and Udio to continue using musicians' work to train their models "to generate supposedly 'new' sound recordings derived from music ingested into their models." The same AI these labels publicly declared would destroy musicians' livelihoods is now operating with the labels' blessing — and the musicians still aren't seeing a dime.

Sony Music, for what it's worth, has not settled. It remains an active plaintiff.

Why this matters beyond music

The AFM lawsuit exposes a structural problem that extends well beyond the recording industry. When a company monetizes content created by individuals — whether through settlement, licensing, or a product built on that content — who gets paid depends entirely on how the contracts were written and whose interests those contracts protected.

Musicians whose recordings are covered by major label contracts have no direct leverage with AI companies. They weren't at the negotiating table when the settlements were reached. The labels owned the copyright to the recordings; the musicians owned nothing but their performance rights, which weren't separately priced in any AI licensing deal.

For independent creators who own their own copyrights, this case is a clarifying reminder: the protection is only as strong as your ability to enforce it yourself. There's no label to negotiate on your behalf — but there's also no label to pocket the proceeds. What the AFM is litigating right now is the cost of giving up that control.

Warner Music's response, for the record: the company is "growing the value of music by establishing guardrails and architecting a healthy AI ecosystem on behalf of artists everywhere." The musicians who trained the models disagree about who that ecosystem is healthy for.

See you next time,

Hank

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About Hank's IP Brew

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