A historic day is upon us. Beginning today, July 1, Division I college athletes will be able to monetize their names, images, likenesses, and other indicia of persona (“NIL”) without penalty from the NCAA, collegiate athletic conferences, or the athletes’ own schools. Pushed by numerous states’ passing legislation to address such monetization, the NCAA Division I Board of Directors approved an interim NIL policy on June 30 allowing for such monetization regardless of which state the athlete goes to school or resides. The NCAA intends to use this interim policy until federal legislation addressing NIL monetization is passed.
The players involved:
- The States – nearly two dozen states have passed legislation allowing for college athletes in such states to monetize their NIL. Several of these go into effect on July 1 – including states with sports-heavy collegiate programs (such as Florida, Alabama and Texas). While the concepts set forth in each law are generally the same, there is a lack of uniformity – something which the NCAA hopes will change with the passing of a federal law.
- Athletes – while college athletes can finally monetize their NIL and athletic achievements (previously there were only limited exceptions, such as for models) – whether through participating in advertisements, being brand influencers on their social channels, or participating as a featured trainer at a sports camp – it is not completely open season. Each state’s law varies, requiring athletes (and their parents/guardians) to pay attention to the specific details of the applicable legislation. For example, the law passed in Illinois prohibits athletes from promoting gambling, alcohol, tobacco, vaping, and adult entertainment products or services. Even the NCAA’s interim policy has several requirements for athletes, including reporting a deal to the school (where applicable). And several schools’ own policies place restrictions on the athletes – including avoiding partnerships with brands that could conflict with a school’s own sponsorship deals.
- Schools – in preparation for the opening of the NIL marketplace, a number of schools have partnered with third party platforms to assist their athletes with NIL opportunities. And for schools in states that have yet to pass NIL legislation, the NCAA’s interim policy will allow those schools to set their own policies, thereby not putting those schools at a disadvantage.
- Agents – athletes are now allowed to have agents assist them with negotiating NIL deals. However, several states’ laws require agents to be registered in that particular state.
- Brands – an entirely new group of endorsers is available; while brands should ensure that the activities in which they want the college athlete to participate comply with applicable law (whether that’s a state’s new NIL legislation or standard advertising laws and rules such as the FTC’s Endorsement Guides), it’s not hard to imagine that athletes with large social media followings will be the first to receive attention from brands.
Finally, although a new avenue for compensation is open, there still is no “pay to play” – collegiate athletes are not allowed to be paid to play their sport. Even with the historic NCAA v. Alston Supreme Court decision from last week (in which all nine justices unanimously determined that the NCAA and its member schools were in violation of the Sherman Antitrust Act for agreeing to limit how much the schools can compensate college athletes for education-related expenses, such as laptops and study abroad programs), the amateur athlete model remains for now. On top of that, collegiate athletes still will not share in media or school sponsorship revenue. But given these historic few weeks in the world of college sports, we may not be far off.
“This is an important day for college athletes since they all are now able to take advantage of name, image and likeness opportunities” -- NCAA President Mark Emmert