Last month marked a long-awaited policy change for many college athletes. Under new rules issued by the National Collegiate Athletic Association (NCAA), student-athletes may now financially benefit from their name, image, and likeness (NIL). Additionally, new legislation became effective in several U.S. states on July 1, 2021. The shift follows years of legal proceedings and public pressure to grant student-athletes access to a larger portion of the billions of dollars generated each year by college sports. While many students and entrepreneurs alike are celebrating the lucrative financial opportunities sure to follow, some still question the best way to navigate and protect all parties involved.
NIL Basics & NCAA Policy Change
Name, image, and likeness, (sometimes referred to as “NIL” for short), are all tied to the overarching legal concept of “right of publicity.” Essentially, this right refers to an individual’s ability to capitalize on, and be compensated through third-party endorsements, for their NIL. NCAA athletes are now able to make money from a variety of business ventures that were previously prohibited. For example, the new rules allow athletes to profit from endorsement and advertising deals, as well as from their social media accounts, making public appearances or speaking engagements, teaching sports lessons, signing autographs, performing music, or starting their own businesses.
Policymakers, faculty, students, and businesses are working through the evolving landscape of NIL opportunities under the new NCAA rules. While the NCAA policy stipulates that students may participate in NIL opportunities consistent with the state law where their school is located, only certain states, including Florida, Georgia, and Alabama, have enacted laws regulating NIL. Specifically, the new NCAA rule does not override relevant state NIL laws, colleges’ and universities’ specific NIL rules, or conferences’ NIL policies.
College athletes should therefore review NIL rules in the state where their school is located. That way they can work with their athletic departments to understand any school and/or conference-specific rules and restrictions. Students competing for colleges/universities in states without an NIL law may initially have more freedom until additional guidance or laws are enacted. Further, smaller schools may not have the same ability as larger university to properly advise students on NIL opportunities and risks.
What now?
While students will have new opportunities to capitalize on their NIL, it is important for both students and the businesses working with them to understand any laws or policies that may impact their transactions. Many state laws and school/conference policies prohibit athletes from endorsing alcohol and tobacco products. Several state laws and school/conference policies also prohibit athletes from using their school’s trademarks or other copyright material in endorsements, or do not allow athletes to sign deals that conflict with their school’s sponsorship agreements. For example, a football player on a team sponsored by Adidas may not be allowed to wear another brand of shoes, such as Nike or the student’s own brand, during games.
Numerous college athletes have already taken advantage of the new rules by signing major endorsement deals with national brands such as Smoothie King and Boost Mobile. Students at local universities and colleges in Richmond are eager to take advantage of these opportunities as well. Along with that there is certainly room for smaller businesses to become involved with college athletes.[1]
For students considering entering into a new contract to profit from their NIL, staying well-informed is a must.
State laws and NCAA rules allow college athletes to hire professional help in the form of lawyers, agents, and tax professionals. It is important that businesses consult with legal professionals when entering deals with students as well. Attorneys can help students protect their own NIL and intellectual property, such as trademarks and copyrights they are using to make a profit. Legal professionals can help both students and businesses understand the complex laws and rules that are in place regarding student-athletes’ NIL. Importantly, understanding the laws and policies can help students and businesses avoid infringing others’, including colleges and universities, intellectual property rights.
We are continually monitoring and keeping up to date with changes in intellectual property and business legislation. If you have any questions about NIL protections and how it may affect you, contact us today. – Courtney Reigel, Esq. & Lily Taggart
(This is not intended as legal advice. Contact a lawyer for assistance in your particular situation.)
[1] VCU, UR enter ‘evolving area’ of name, image, likeness benefits for athletes | College Sports | richmond.com