H.R. 5693 — PROTECT Act

This section sets forth four congressional findings on intercollegiate athletics at nonprofit higher education institutions, including their promotion of student development and public engagement as a public good; their generation of billions of dollars in multistate revenue; public institutions' taxpayer-supported obligation to manage athletics assets for public benefit and student welfare; and the inherent conflicts in agreements conveying ownership, revenue-sharing, control, or security interests to private equity, hedge funds, or similar vehicles.

This section establishes, as a condition of eligibility for federal student aid programs under Title IV of the Higher Education Act of 1965, a prohibition on higher education institutions entering into, maintaining, or permitting agreements with private capital firms (i.e., hedge funds or private equity funds as defined in 12 U.S.C. 1851(h)(2), private funds as defined in 15 U.S.C. 80b-2(a)(29), or related investment advisers) or sovereign wealth funds that convey ownership, profit or revenue interests, control rights, or joint ventures in the institution's intercollegiate athletics program (including media rights, sponsorships, ticketing, data, licensing, merchandising, and facilities). Exceptions apply to (1) fee-for-service contracts for discrete services; (2) charitable contributions, gifts, or grants; (3) tax-exempt bond financings or lease-purchase agreements with governmental units or 501(c)(3) conduit issuers lacking revenue or control interests; and (4) sponsorships or advertising without revenue-sharing or control. The prohibition extends to athletics conferences, affiliates, collectives, and controlled entities; requires annual certification and public disclosure of excepted agreements; mandates compliance or termination of existing agreements within 24 months of enactment (with no renewals or extensions permitted otherwise); and directs the Secretary of Education to issue implementing regulations after consulting the Secretary of the Treasury and Securities and Exchange Commission, harmonized with federal securities laws to the maximum extent practicable.