Last week, the National Collegiate Athletic Association ("NCAA") Board of Governors voted unanimously to permit student-athletes to "benefit from the use of their name, image and likeness in a manner consistent with the collegiate model." As I previously wrote about here and here, California passed Senate Bill 206, which, effective January 1, 2023, will prohibit public and private colleges and universities in California from revoking scholarships or eligibility from student-athletes who monetize their name, image, and likeness ("NIL"). California was likely the impetus for spurring the NCAA into action. In fact, part of the reason why Senate Bill 206 was drafted so as not to go into effect until 2023 was to give the powers that be, the NCAA, time to revisit its bylaws and implement NIL rules which would govern student-athletes nationwide.
The NCAA's press release talks about permitting student-athletes to use their NIL "in a manner consistent with the collegiate model," which does not offer any clarity as to what the unanimous vote actually means for student-athletes. So what is next for the NCAA? For starters, each of the three NCAA divisions has been directed to immediately create new rules for NIL, but no later than January 2021, which means we may be over a year away from finding out what the new rules will be.
What about the NCAA Board of Governors Federal and State Legislation Working Group? Is its work done? The Working Group was established earlier this year to research the merits of allowing student-athletes to profit from their NIL and provide recommendations based on their findings to the NCAA Board. It looks like their work is only getting started as they have been tasked with continuing to gather feedback through April 2020 on how to best respond to the state and federal legislative environment and update their recommendations based on ongoing findings. The Working Group will certainly have its work cut out for it as upwards of 20 states either have bills in the pipeline or state legislators who have verbally expressed their commitment to creating a student-athlete NIL bill. This includes Florida, Michigan, Minnesota, South Carolina, New York, Ohio, Kentucky, Illinois, Washington State, and Pennsylvania, to name a few.
The Working Group also has to deal with time pressure. One of the two bills Florida has on the table, House Bill 251, would go into effect July 1, 2020 if it gets passed, less than one year after being filed by Rep. Kionne McGhee. Florida, like California, is another power house state for college athletics, with schools such as the University of Miami, Florida State University, and University of Florida. So by pushing up the timeline, it may help the Sunshine State get an edge on recruiting over California and other states. To add fuel to the fire, Michigan introduced a bill this week which, if passed, would also go into effect July 1, 2020.
And now let's take this somewhere the NCAA absolutely does not want to go: pay-for-play compensation. This goes directly against one of the principles guiding the NCAA's NIL rule implementation (and the NCAA as a whole), which is to "make clear that compensation for athletics performance or participation is impermissible." South Carolina legislators are proposing a bill which would not only allow student athletes to profit from their NIL, but also receive $5,000 stipend for profitable sports such as basketball and football. New York is taking things a step further with Senate Bill S6722B which would, among other things, require colleges to take 15% of revenue earned by a college's athletics program and divide it into two components: (1) a wage fund to be divided evenly among all student-athletes attending that college, and (2) a sports injury health savings account, to provide student-athletes who suffer a career-ending or serious injury during a game or practice with compensation upon graduation. With such proposed bills, it is apparent that there are many discussions ahead involving the NCAA and state and federal legislatures if the NCAA is to ensure that all states remain governed by the same rules for collegiate amateur sports.
As we wait for the dust to settle from all the NCAA Working Group research and the state and federal bills, one thing is for certain -- college sports will never be the same. There are three main buckets which present a bulk of the opportunities for student-athlete NIL. First, student-athletes could earn compensation from individual deals, which could come in the form of endorsements and campaigns (at both the national and local level), activations with brands in the off season, and social media influencer brand and advertising partnerships. Especially with the age range of student-athletes and the reach of social media, this could allow both high profile student-athletes and those with a lot of personality to create a variety of opportunities for themselves to profit from their NIL.
The second option is spearheaded by the National Football League Players Association ("NFLPA") and the National College Players Association ("NCPA") which announced that they are teaming up to explore how student-athletes can be compensated for their NIL. Under NFLPA's subsidiary, REP Worldwide (which provides group licensing services for not only the NFL, but other organizations, such as the U.S. Women's National (Soccer) Team Players Association), the NCPA will explore ways to facilitate group licensing deals for student-athletes. Group licensing deals could soon be in the works for merchandising and gaming, for example. For those who miss Electronic Arts (EA) NCAA Football, which discontinued the franchise after several lawsuits regarding EA's use of the NIL of student-athletes, it could make a comeback with proper student-athlete NIL laws in place. EA CEO Andrew Wilson has already stated that the company would be open to building games where student-athletes can profit from their digital NIL. Group licensing rights may also open the doors to student-athletes earning compensation for television broadcasting, sports supplements, and equipment.
Last, but not least, student-athletes will be able to benefit from utilizing their NIL to promote themselves as youth sports coaches or trainers, an opportunity that can provide a wide range of student-athletes with a way to generate income for themselves. For extremely savvy student-athletes, they could partner with brands to create exclusive merchandise sold in connection to their training sessions and sports clinics. The possibilities are seemingly endless for the entrepreneurial student-athlete living in a digital world.
“We must embrace change to provide the best possible experience for college athletes. Additional flexibility in this area can and must continue to support college sports as a part of higher education. This modernization for the future is a natural extension of the numerous steps NCAA members have taken in recent years to improve support for student-athletes, including full cost of attendance and guaranteed scholarships.” -- Michael V. Drake, chair of the NCAA Board of Governors and President of The Ohio State University.