On July 1, 2021, the NCAA adopted a temporary policy allowing any college athlete the opportunity to license their Name, Image, and Likeness (NIL), as long as they comply with applicable state law and other NCAA rules. This decision, for the first time, allowed these students to profit from the name recognition they might have developed as elite athletes.
Already, many companies have great contracts with top athletes. for example:
- Ga’Quincy “Kool-Aid” McKinstry, a University of Alabama defensive linebacker, struck a deal with Kool-Aid to promote the drink;
- Hannah and Haley Cavender, Fresno State basketball players and social media stars, signed a deal with Boost Mobile;
- The deodorant grade is signed by 14 different college athletes across a variety of sports, backgrounds, and colleges; And
- Dozens of other players signed deals to promote various local businesses.
Many organizations and individuals have sprung up to “help” student-athletes make an income from scratch. However, there are a plethora of potential pitfalls that await both students and sports programs as they navigate this new world of marketing deals.
As a foundational issue, student-athletes must first comply with the laws of the state in which they live and attend school—these states may have very different laws governing NIL licensing, from very little supervision to outright bans. In North Carolina, for example, students are allowed to license their name, photo, and likeness, as long as payment is not a direct incentive to enroll or remain at a particular institution (in another meaning No “pay to play”). However, schools are also free to restrict and/or prohibit practice among athletes.
In fact, the universities themselves often walk a tightrope when navigating NIL deals and athletes’ interest in them. The NCAA still prohibits institutions from paying student athletes in any way, including for NIL, but schools remain interested in protecting athletes from predatory agents and others who may seek to take advantage of their inexperience. Furthermore, universities must protect their intellectual property rights in school logos and other trademarks. Many schools have developed policies and programs designed to address these concerns. Oftentimes, student-athletes are required to notify the school of any affiliations, and are not permitted to promote substances that are not in line with university values or that are prohibited by the NCAA, such as alcohol, tobacco products, or gambling. Most schools also don’t allow students to miss out on classes, assignments, or team commitments to fulfill their zero-sum deals. In most cases, athletes are prohibited from using their university’s trademarks in any appearances. While most organizations have eschewed direct involvement in organizing or facilitating NIL student deals, it has become very common for schools to offer or require athletes to participate in informational seminars or one-on-one consultations with coaches or counsellors to help them navigate the many legal issues. and practical issues involved.
Assuming that students have passed the applicable rules and regulations of their state and institution, licensing agreements can vary widely in compensation offered and rights waived. Each convention is unique in this field. Athletes can license every aspect of their zero page or a specific piece, such as a single photo. The license may or may not be exclusive, which means that the athlete cannot use or license the lack of it for any other project. The agreements may vary in duration, with some long-term contracts limiting the athlete’s options for years to come. Additional legal requirements may also arise if the athlete is a minor. For all of these reasons, students should seek knowledgeable representation to help them understand the implications of any agreement before signing it.
Students should ensure that they take all appropriate steps when reviewing any contracts before signing them. Is it permissible for them to use university logos? Will they be required to violate school policies or state law? Will they reserve the right to license the lack of other opportunities they have? Are they paid at a fair market rate? The payments themselves may also increase the potential risk. NCAA policy still prohibits pay-per-play and performance-based payments, so any deals that athletes do not sign cannot be directly linked to their performance as an athlete. Financial aid recipients should be aware that income from NIL deals can affect any need-based assistance they receive.
Finally, athletes evaluating the zero-deal bargain should keep in mind that the rules could, and very likely change, as more states deal with the problem and the NCAA reconsiders its policies. For student-athletes, the freedom to license their NIL is an exciting development, but experienced legal representation and advice are essential to help navigate the complex issues surrounding any opportunities. Students need to be aware of their rights and what they may lose by entering into a contract – having a consultation in the early stages of these negotiations can save a lot of time, energy and money in the future.