Thanks to a recent NCAA interim policy change and a new state law, student-athletes in Texas can now be paid for use of their name, image, and likeness (NIL). This opens up new opportunities for students involved in collegiate sports to earn money.
On July 1, 2021, SB1385 became effective allowing student-athletes in the state to be compensated for their NIL without jeopardizing their scholarships and/or eligibility.
However, the Texas legislation provides specific “guardrail” restrictions designed to prevent NIL from morphing into pay-for-play, including a transparency and disclosure requirement. Student-athletes are required to disclose to their schools, in the specific manner prescribed by their school, any proposed agreement related to NIL. Similarly, student-athletes are barred from signing deals which conflict with their school’s current contracts or core principles and values.
Similar to the NCAA’s interim NIL policy and other states that passed specific NIL legislation, Texas student-athletes are prohibited from endorsing companies related to alcohol, tobacco, steroids, gambling and sexually oriented businesses. However, unique to Texas is the prohibition of endorsing illegal firearms. The law states that “athletes may not enter into a contract for the use of their NIL in exchange for an endorsement of…a firearm the student athlete cannot legally purchase.” This clarification, specifying that the firearm must be one the athlete can legally purchase only allows student-athletes to endorse firearm companies that the athletes themselves can legally purchase from.
Included in the NIL legislation are required courses that will ensure student-athletes are well equipped to deal with the possible business decisions to come. The Texas law mandates colleges and universities to offer financial literacy and life skills workshops at the beginning of an athlete’s freshman and junior years at their respective school.
The University of Texas has gone above and beyond the state mandated financial literacy and skills workshop courses they are required to offer. UT implemented “LEVERAGE,” an innovative NIL program designed to equip student-athletes with all tools and knowledge necessary to have their brands and platforms flourish. LEVERAGE is composed of 4 main areas of focus, including: (1) personal branding and brand management, (2) business formation and entrepreneurship, (3) opportunity management, and (4) financial literacy. This program will implement curriculum revolving around financial literacy, allowing student-athletes to take courses such as wealth management, assessing financial risks, taxes, and making business decisions.
The state of Texas—being the home of UT, Texas A&M, Baylor, Texas Tech, and many more—has become a hub for great student-athletes. It is no surprise these student-athletes instantly began profiting off their NIL on July 1, 2021. Texas Tech QB Tyler Shough, a Heisman trophy favorite, already teamed up with Cameo to make personalized videos for fans. Another idea that Shough hinted at was the possibility of starting a podcast with other members of the Texas Tech football program. Deals struck so far mainly include clothing, gaming and/or personalized videos, however a podcast would be interesting as student-athletes could profit off advertisements and sponsors.
UT football players wasted no time as well when it comes benefiting off their NIL. UT football players DeMarvion Overshown and Josh Thompson signed with a local Austin apparel company called Last Stand Hats. Last Stand Hats will create apparel specific to each student athlete they enter into agreements with, and the company has already made available apparel related to Overshown. However, Overshown is free to continue marketing himself, as he also entered into an agreement with Jet.Studies. Jet.Studies is launching Overshown’s own brand which will feature hoodies, shirts, and more. Texas, being one of the biggest collegiate sports markets in the world, will have many more student-athletes entering into NIL agreements as time progresses.
With Texas legislation finally allowing student-athletes to profit off their NIL, these students are wasting no time in being fairly compensated for the hard work and worth they bring to their respective schools. Student-athletes have already begun to benefit off these new laws, and with the glamour that comes with Texas collegiate sports, expect many more to follow suit. 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.