Navigating the Rapidly Evolving World of NIL

What is NIL?

 NIL stands for “name, image, and likeness” and has become shorthand for the ability of high school and college athletes to be compensated for participating in activities and business opportunities outside of their school-funded scholarships. The three elements of NIL—name, image, and likeness—evolved from the “right of publicity,” an intellectual property right that protects against the misappropriation of an individual’s identity for commercial gain.

“Name” is simply the use of an athlete’s name or nickname, while “image” refers to the identifiable factors and characteristics that make the player unique. “Likeness” captures the person’s graphic representation. For example, more than 10,000 college football players have recently opted into appearing in the upcoming EA Sports College Football 25 video game in exchange for $600 and a free copy of the game.

How did we get here?

Until July 1, 2021, the National Collegiate Athletic Association (NCAA) prohibited student-athletes from profiting off marketing and promotional endeavors, including autograph signings, product endorsements, and social media posts. While the NCAA capitalized on the popularity of their star athletes and grew to become a multi-billion-dollar business, the athletes themselves were barred from making money in order to preserve their amateur status and distinguish collegiate athletics from professional sports.

On June 21, 2021, everything significantly changed with NCAA v. Alston. The Supreme Court upheld a district court ruling that stated the limits on education-related compensation violated the Sherman Antitrust Act by unreasonably restraining competition among schools. Less than two weeks later, in response to both the Supreme Court decision and laws recently passed by state legislatures permitting varying levels of NIL activity, the NCAA voted to create an interim NIL policy that would finally empower student-athletes to build their own brand and take advantage of their on-field success.

NCAA NIL Guidelines

Despite all that has happened since the adoption of the NCAA’s initial policy in the summer of 2021, these four guidelines have remained the same:

  • Individuals can engage in NIL activities that are consistent with the law of the state where the school is located. Colleges and universities may be a resource for state law questions.
  • College athletes who attend a school in a state without an NIL law can engage in this type of activity without violating NCAA rules related to name, image, and likeness.
  • Individuals can use a professional services provider[1] for NIL activities.
  • Student-athletes should report NIL activities consistent with state law or school and conference requirements to their school.

Although this policy appears to largely defer to state NIL laws, if a state law permits a certain action and NCAA legislation prohibits that same action, member institutions must follow the NCAA’s rules. Over 30 states and the District of Columbia have already passed NIL laws, many of which now apply to high school as well as college student-athletes.

On December 5, 2023, NCAA President Charlie Baker sent a letter detailing several proposed changes to the organization’s current policy. One change in particular would give schools autonomy over NIL decisions and transform the landscape of collegiate sports. Baker proposed allowing student-athletes to enter NIL deals directly with their schools, something that is presently impermissible. Baker also expressed his intent to create a new tier of the largest and wealthiest athletic programs (i.e., the Big Ten, SEC, Big 12, and ACC). An exclusive competitive subdivision for these schools could alleviate issues around transfer limits, ongoing litigation, recruitment, scholarships, and NIL rules. However, regardless of what occurs, universities, collectives, agents, businesses, and players at all levels should still be thoughtful before engaging in any NIL transactions.

Legal Considerations

While the new rules governing NIL rights have created a plethora of opportunities for college athletes and others, they have also resulted in confusion and considerable risk. As they currently stand, NIL regulations present a complex, potentially inconsistent patchwork of state laws, NCAA rules, and university oversight.

The allure of earning possibly life-changing income as a student-athlete may be tantalizing, yet it is imperative to ensure NCAA eligibility is not sacrificed when entering an agreement. Retaining an experienced attorney is crucial for understanding various NIL requirements and proper conduct when making a deal. Consulting a wide array of legal practice areas may also be beneficial for appreciating the terms of a contract, immediate consequences, and future implications. Complicated NIL deals often require the expertise of these specialized practice groups, including corporate, immigration, tax, intellectual property, labor and employment, and succession planning.

Under current NCAA guidelines, the schools are limited in the advice and services they can offer. For example, the NCAA cannot provide free services (i.e., graphic designers, tax preparation, or contract review) to student-athletes unless those services are available to the entire general student body. Therefore, full-service law firms like Harter Secrest & Emery can step in to assist by:

  • Drafting, reviewing, and negotiating contracts related to NIL opportunities
  • Advising and documenting when entering a NIL relationship
  • Ensuring compliance with school, state, and/or NCAA policies
  • Registering intellectual property, including digital assets
  • Planning for taxes and future wealth transfers
  • Protecting interests and aligning long-term goals and legal obligations
  • Addressing challenges while maintaining legal status and conforming with visa obligations

Further Information:

If you have any questions or would like more information on the evolving NIL landscape, please contact Daniel W. Collins or Andrew J. Latona.

[1] The NCAA defines a professional service provider as “an individual who provides third party services to an individual regarding their name, image, and likeness. A professional service provider includes, but shall not be limited to, an agent, tax adviser, marketing consultant, attorney, or anyone who is employed or associated with such persons.”

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