Understanding Proposed Changes to NCAA NIL Regulations

It is challenging to go a day in college sports without hearing chatter about Name, Image, and Likeness – NIL for short. We are at the culmination of many decades worth of debates on student-athletes’ rights of publicity and on the brink of a major shift in college athletics. 

Amidst a whirlwind of legislative proposals on the topic at the state and national level, there is no shortage of potential framework to allow student-athletes to earn compensation for their NIL. But what does this mean right now? No state bill has reached an effective date (Alabama, Florida, Georgia, Mississippi and New Mexico’s laws are set to go live on July 1, 2021 and Nebraska’s has an opt-in date as soon as school’s choose) and the federal bills have not seen progress past introductions to Congress. 

Prior to the annual NCAA Convention in January, the U.S. Department of Justice expressed concern to NCAA President Mark Emmert over potential antitrust violations in the NCAA NIL proposals, which were set to be voted on that same week. After each Division made the decision to delay the vote, the Association has been in a holding pattern on the subject, awaiting for the results of both the federal NIL landscape as well as the U.S. Supreme Court’s hearing of the NCAA v. Alston case which is expected to be given in June or July. However, the Division I Council is scheduled to reconvene on May 19th, a meeting which could bode for the rebirth of decision-making surrounding NIL legislation and the Third-Party Administrator.

At this moment, it is too difficult to know who will have the final say, whether that is the NCAA, the states, or the federal government. However, what we do have to go off of is the existing NCAA rules and regulations for student-athletes looking to monetize their NIL, as well as the previously-tabled NCAA Division I proposal. 

Current NCAA Regulations at the Division I Level

Currently, there is variance among the three divisions on NCAA regulations regarding how student-athletes can use their NIL. Although the existing regulations are very intricate, athletics compliance staff devote their time to both applying the rules and educating student-athletes on the “do’s” and “don’ts”.

According to the NCAA

In general, to maintain NCAA eligibility, Division I student-athletes may not promote or endorse a commercial product or service, even if they are not paid to participate in the activity. Athletes may use their image to continue participating in non-athletically related promotional activities if they were initiated before college enrollment.

However, several exceptions exist related to a student-athlete’s NIL, most commonly in charitable, educational, nonprofit promotions, media activities, national governing body promotions, and camp and congratulatory advertisements. Furthermore, the NCAA notes that, “Since 2015, over 98% of waivers submitted to allow student-athletes to use their name, image or likeness to promote a non-athletically related business or product have been approved.” 

In the entrepreneurial space, there have been a handful of examples of student-athletes receiving waivers. For example, Princeton swimmer Matthew Marquardt teamed up with his brother to design, create, and market a product for competitive swimmers to use as a foothold for backstroke starts. Another example is Katarina Samardzija, a former tennis player from Grand Valley State University, who started her own business and created the Wrist Locker, a wrist wallet created to hold valuables when working out. The common thread in these examples lies in their origin and connection to the student-athlete’s academic experience.

The proposals on the table, however, are taking a new step towards allowing student-athletes to expand their NIL marketing beyond the academic realm and into the personal brand space.

Let’s take a look at what makes the previously proposed Division I legislation unique.

NCAA Division I Proposal on Name, Image, and Likeness

With the understanding that the NCAA governance structure has delayed voting, and with the caveat that state or federal laws could preempt the Association, here are the major takeaways from the Division I proposal that was on the table in January:

In general, student-athletes can…

  • Market their NIL related to personal work product or services (e.g. personal businesses, products, services, appearances)
  • Promote Third Party products or services

More specifically, a student-athlete can…

  • Promote a personal work product, including a reference to their athletic experience or institution, consistent with policies applicable to the general student body.
  • Use a professional service provider such as an agent, tax advisor, marketing consultant, attorney or anyone who is associated with such persons, as long as the pay rate is commensurate with the going rate
  • Receive compensation for teaching/coaching in their sport on a fee-for-lesson basis and may promote the lessons subject to the following conditions:

(a) If institutional facilities are used, applicable institutional processes for renting facility space in a manner consistent with the general public apply;

(b) Playing lessons shall not be permitted; 

(c) Compensation is paid by the lesson recipient (or the recipient’s family member) and not another individual or entity;

(d) Instruction to each individual is comparable to the instruction that would be provided during a private lesson when the instruction involves more than one individual at a time.

  • Use their NIL through a crowdfunding service (e.g., website) to raise funds for educational expenses that are not included in their cost of attendance (e.g., mission trips, internships), provided there is no institutional involvement.
  • A student-athlete may sell institutional merchandise he or she has purchased, subject to institutional restrictions related to the resale of items that include institutional marks.
  • Receive compensation for their autograph, as well as prospective student-athletes, if institutional marks are not used in conjunction with the sale. 

On the other hand, student-athletes cannot…

  • Sell items provided by the institution, including awards and apparel retained by the student-athlete at the end of a season that the institution will not reuse, until they have exhausted eligibility or has become permanently ineligible for competition. 
  • Engage in promotional activities for a product or service that, per NCAA policy, is specifically prohibited from being promoted during an NCAA championship.
  • Use institutional marks in the promotion of a personal business activity.
  • Miss class time for NIL related activities.
  • Use their NIL through a crowdfunding service to raise funds to cover educational expenses that are included in the definition of cost of attendance.
  • Receive compensation for signing an autograph while they are participating in a required athletically related activity or otherwise representing the institution.
  • Post or repost content created by an institution in order to receive compensation.
  • Use their NIL with an athletics equipment company or manufacturer to publicize the institution’s athletic program uses its equipment.

As for other involvement, institutions…

  • Must have policies that set forth the NIL activities which a student-athlete may or may not engage, as well as provide these to prospective student-athletes once a scholarship offer is extended or the student-athlete is admitted.
  • Can share content on social media with student-athletes, given the institution retains the rights to the content and the student-athlete is not receiving compensation.
  • Can prohibit a student-athlete’s involvement in NIL activities that conflict with existing institutional sponsorships.
  • Can establish further guidelines on NIL, either independently or in a conference.
  • Cannot be involved in the development, operation, promotion, or purchasing of a student-athlete’s business activity, including institutional staff. 
  • Cannot serve as an agent for a student-athlete.

Under the proposed framework, disclosure of NIL transactions for both student-athletes and prospective student-athletes will be required. A detailed account of involved parties, contact information, and compensation arrangements, among others, will be required and any changes must be made known to the institution within 14 days of the arrangement. Prospective student-athletes must disclose activity details to a third-party administrator prior to enrolling at an institution. 

Although the NCAA Division I Council made the decision to table the proposal in the winter, the climate of college athletics as well as state and federal legislation is trending toward this change. The outcome of the NCAA v. Alston Supreme Court case this spring will play arguably the most significant role in the timeline of NIL legislative development. Whether it is the NCAA, the State legislators, or the Federal government who make the final ruling, change is coming and it is coming soon. 

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