Student-Athlete Name, Image & Likeness Rules
In recent years, the NCAA has faced increasing objections to its restrictions on compensating student-athletes. The latest battleground involves students’ rights to profit from the use of their name, image and likeness (NIL). In response to several states enacting laws permitting such compensation, the NCAA instituted its own interim policy. A key component of the policy is that student-athletes must comply with state law. As a result, organizations developing guidelines or anyone seeking to enter into a NIL contract should consult an attorney for advice regarding how the law in their state and the NCAA rules might apply.
What Is the NCAA Interim Policy?
On June 30, 2021, the NCAA adopted an interim policy regarding compensation related to NIL. It states:
- Student-athletes are permitted to engage in NIL activities that are consistent with the law of the state where their school is located.
- Student-athletes in states without a NIL law can also engage in this type of activity without violating NCAA rules.
- Individuals can use a professional services provider for NIL activities.
- Student-athletes should report NIL activities consistent with state law or school and conference requirements to their school.
Notably, schools and conferences have the authority to create their own rules consistent with the NCAA policy and the law in the state where they are located.
Which States Have Enacted Laws?
The first states to enact NIL laws were Alabama, Arizona, Florida, Georgia, Kentucky, Mississippi, New Mexico, and Texas. These went into effect in July 2021. Since then, sixteen other states have adopted NIL laws and several more are considering legislation. While there are variations from state to state, generally, these laws include the following provisions:
- Schools cannot pay athletes for their NIL.
- Schools cannot restrict a student-athlete’s ability to be compensated for their NIL.
- NIL contracts that conflict with the educational institutions’ contracts or policies can be prohibited.
- Student-athletes can obtain professional representation, but there may be requirements for agents, attorneys and other providers.
- Participation in NIL-related activities cannot impact a student-athlete’s athletic or scholarship eligibility.
- Student-athletes can be prohibited from endorsing companies in certain industries and/or which may be contrary to the school’s values, such as alcohol, tobacco, steroids, gambling and sexually oriented businesses.
Who Are the NIL Stakeholders?
Several key stakeholders stand to gain significant revenue from NIL laws, but also face risks. These groups include the following:
- Schools, conferences, and associations. Schools in states that have permitted NIL compensation may gain a recruiting advantage at least in these early stages of NIL laws before every state allows it, but they must take on the extra burden of monitoring contracts and compliance with all laws.
- Student-athletes. Income from endorsements, personal appearances, and the like could be substantial. However, students must comply with all rules and take care not to be taken advantage of in deals and to protect their NCAA eligibility.
- Companies can leverage the popularity of athletes but may face stiff competition from other brands and must stay abreast of changing rules in this area. They also have to vet students’ reputations carefully to ensure they are a good fit for the company.
- Professional service providers. Agents, attorneys and others will see more business as they are hired to negotiate on behalf of athletes. However, they are likely to face increased regulation and scrutiny of contracts.
- University boosters. Schools must ensure that boosters are educated regarding prohibitions on using NIL contracts for recruiting and that financial transactions between boosters and student-athletes must be legitimate business arrangements and properly disclosed and monitored.
As this is a new and evolving area of law, those seeking to enter into NIL contracts and/or develop guidelines for managing such arrangements should consult a skilled attorney. Experience in Trademark Law, Sports Law, eSports and related legal issues is essential to help parties monetize and protect their rights and minimize potential liability.
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