Thanks to a recent NCAA interim policy change and a new state law, student-athletes in New Mexico can now be paid for use of their name, image, and likeness (NIL). Student-athletes are now able to earn money and monetize themselves in ways never before seen.
What is the state law?
On April 7, 2021, the Student Athlete Endorsement Act was signed into law in New Mexico and applies to all endorsement contract entered into on and after July 1, 2021. Now, student-athletes in the state of New Mexico can be compensated for the use of their NIL.
The law specifically prohibits universities within New Mexico from:
- Prevent[ing] a student athlete from fully participating in athletics without penalty: (a) for receiving food, shelter, medical expenses or insurance from a third party; or (b) for earning compensation from a third-party as a result of the use of the student athlete’s name, image, likeness or athletic reputation;
- Prohibiting or discouraging a student athlete from wearing footwear of the student athlete’s choice during official, mandatory team activities so long as the footwear does not have reflective fabric or lights or pose a health risk to a student-athlete;
- Preventing a student athlete from receiving compensation for the use of the student athlete’s name, image, likeness or athletic reputation when the student athlete is not engaged in official, mandatory team activities; or
- Arranging third-party compensation for the use of a student athlete’s name, image, likeness or athletic reputation or use such deals as inducements to recruit prospective student athletes.
New Mexico, unlike many other states that enacted NIL legislation, has placed only one restriction on student-athletes when it comes to NIL endorsements. Rather than following what many other states enacted by banning athletes from signing deals with certain industries, the law only prohibits student-athletes from advertising during official, mandatory team activities without the approval of the university. If a university wants to further limit their student-athletes from entering into NIL deals with certain industries, the university will have to include that in its policy.
What has happened so far?
The University of New Mexico (“UNM”) Lobos have already enacted additional restrictions. Lobo athletes cannot wear team gear or logos for any deals they enter. The university is also prohibiting any NIL activity to be done at team facilities or any “covered program activity,” which includes practices, team meals, official workout sessions, etc. Further, despite being legal in the state, UNM athletes cannot enter endorsement deals for cannabis, alcohol or sports betting companies.
Businesses can also reach out to the universities or athletes directly. While the universities cannot broker a deal, they can instruct the business to contact a third-party company who will help facilitate the deal with the athletes. UNM has partnered with NOCAP, an open platform that provides Lobo student-athletes with technology and resources to maximize their NIL.
In general, New Mexico lawmakers enacted a broad NIL law that left much of the decision making to individual universities. No matter the approach of the university, student-athletes in the state of New Mexico are now able to capitalize and be compensated off their NIL. If you need assistance developing an appropriate policy to comply with the state law or you are an athlete, school, or business looking for guidance on complying with NCAA rules and state law, contact our attorneys.
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