By Katherine Cancelliere, Intern at ND Galli Law
College can be an exciting experience, for both students and loved ones, in many ways. New friends, new learning material, and many new challenges and triumphs. Now, with the new Name, Image and Likeness (NIL) interim policy adopted by the National Collegiate Athletic Association (NCAA), college may be both a fun – and lucrative – experience for college athletes. Here are some takeaways on what benefits the NIL policy may provide, how the new NCAA NIL policy emerged, tips for maximizing your NIL as a student athlete, and trends thus far in student-athlete NIL agreements.
What is NIL?
So, what is name, image, and likeness in this context? The NCAA has defined NIL as an activity that involves the use of an individual’s name, image, and likeness for commercial use. A concrete example is always useful. Recently, Bumble, the online dating app, has signed over 50 female college athletes to name, image, and likeness deals. Under these deals these 50 female college athletes will be paid to attend Bumble events, post on social media promoting the dating date, and will act as campus representatives for Bumble. Due to both the new NCAA NIL interim policy and under pre-existing state legislation, brands may pay college athletes to commercially use anything that identifies these athletes. This new policy is a big win for college athletes who can use this NIL money to advance a professional sports career, pay for college or save for the future.
College athletes now have multiple ways they can earn a profit while attending college. As a college athlete with a NIL deal a student could receive compensation for their autograph. Or they could get the amazing opportunity to develop and/or model a brand’s athletic apparel. Like in the Bumble example, a student athlete could be compensated for promoting a brand’s services or products. College athletes could use their phones and their typical apps, TikTok, Twitter, or Instagram to work with these brands to profit, all while excelling academically and within their chosen sport. The possibilities are seemingly endless.
The Emergence of NCAA Interim Policy and State Legislation
This new NCAA interim policy allowing college athletes to commercially benefit from their NIL did not happen overnight. In July 2009, Ed O’Bannon, a very successful men’s college basketball player, brought a case against the NCAA and the Collegiate Licensing Company. O’Bannon v. NCAA, 802 F.3d 1049, 1055 (9th Cir. 2015). O’Bannon claimed the NCAA’s rules prohibiting athletes from profiting off their NIL violated antitrust laws, because the NCAA NIL rules were an illegal restriction of trade under Section 1 of the Sherman Act, 15 U.S.C. § 1. Id. Relevant to O’Bannon’s argument Section 1 of the Sherman Antitrust Law states, “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.” 15 U.S.C. § 1. The NCAA attempted to claim that their NIL compensation rules fell outside the scope of Sherman Antitrust Act, because the act only restrains trade or commerce, and the NIL rules were merely eligibility rules that did not regulate commercial activity. Id. at 1064. The court disagreed, stating that the modern definition of commerce was broad and included, “almost every activity from which the actor anticipates economic gain.” Id. The NCAA NIL rules were framed as eligibility rules, stating, “an athlete who receives compensation other than the scholarships specifically permitted by the NCAA loses his eligibility for collegiate sports.” Id. at 1065. However, the 9th Circuit Court stated antitrust laws cannot be avoid by a clever manipulation of words and the mere fact that a rule is characterized as an eligibility rule does not mean the rule does not restrict trade. Id. Therefore, in 2015 the 9th Circuit concluded that the NCAA is not above antitrust laws and courts should ensure the NCAA plays by the Sherman Act’s rules. Id. at 1079.
After this decision, in 2019, California legislators were propelled to enact state law allowing collegiate athletes located in California to profit off their NIL. Additional states followed California’s lead. In June 2020 Florida passed a law granting NIL rights to college athletes with an effective date of July 1, 2021. Other states followed suit, including Georgia, Alabama, Mississippi, and New Mexico.
The big national push for collegiate athletes’ rights to profit from their NIL came in June 2021 when the US Supreme Court, in National Collegiate Athletic Association v. Alston, held that the NCAA was no longer able to restrict education related compensation and benefits paid to student athletes. NCAA v. Alston, 141 S. Ct. 2141, 2166 (2021). Alston does not speak directly on NIL, but rather prompted the public forum to question why the NCAA was restricting athlete compensation. Justice Kavanaugh’s concurrence served to remind the public that although the Alston decision stated that the NCAA could no longer restrict education related compensation for student athletes, other compensation NCAA rules remained. Specifically, Kavanaugh pointed out that NCAA rules have, “historically restricted student athletes from receiving money from endorsement deals and the like.” Id. (Kavanaugh, J., concurring).Kavanaugh emphasized the point that, “[c]ollege presidents, athletic directors, coaches, conference commissioners, and NCAA executives take in six- and seven-figure salaries. Colleges build lavish new facilities. But the student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds, end up with little or nothing.” Id. In reaction, members of the public picked up this cudgel and voiced criticism of the NCAA’s continued restriction of athlete compensation.
This led to a push for a change in NCAA policy to allow students to profit from their NIL. On June 30, 2021, only 9 days after the decision in Alston, the NCAA swiftly released the new NIL interim policy. The 2021 NCAA NIL interim policy paved a path for student athletes to monetize their NIL in states where NIL legislation had not been passed. The NCAA has posted guidance, found here, for common questions asked about the interim policy. Specifically, the guidance states that the policy will last until federal legislation on student-athletes NIL rights is passed or new NCAA rules are enacted.
As noted previously, there were multiple states that passed NIL legislation before the NCAA’s interim policy was enacted. When NCAA released their interim NIL policy, they stated athletes in states with applicable laws “can engage in NIL activities that are consistent with the law of the state where the school is located” and students in states without NIL legislation may engage in the use of their NIL under the guidelines of the NCAA interim policy. Alabama had NIL legislation in place that was more restrictive than the NCAA interim policy, which prompted the state legislator to repeal the legislation and allow the state’s universities to operate under the NCAA NIL interim policy. When the move to repeal the Alabama NIL legislation was made, House Representative, Kyle South stated that Alabama’s more restrictive NIL legislation raised concerns about top-tier colleges remaining competitive in recruitment. Georgia had an interesting clause in their NIL legislation stating that if either federal legislation or any policy, rule or regulation was adopted then the Georgia NIL law would be null and without effect. GA HB 617. The NCAA provides a list, found here, of all the states that currently have NIL legislation for students to consult. Opendorse, a company founded for the purpose of assisting student athletes to build and monetize their brand, has provided a breakdown for college athletes of general characteristics of these state NIL laws. This breakdown provides relevant information, such as which states have repealed their NIL laws, amended these laws, or currently do not have NIL legislation but are considering enacting it.
NCAA NIL Policy Still Has Limits
College athletes should be aware that individual universities are permitted to implement their own NIL rules, separate from NCAA or state NIL legislation. All universities have the right to oversee student NIL deals and object to the deals if the agreements conflict with other pre-existing university agreements. It is for this reason that the NCAA suggests college athletes work directly with their coaching staff and university compliance departments to ensure their NIL deals abide by university specific NIL rules.
Students should also be aware that nothing in NCAA’s interim policy changes the NCAA’s long-standing ban on universities themselves providing compensation for university use of their athlete’s NIL. Therefore, college athletes will need to look to companies outside of their school to monetize their NIL, making the resources provided above extremely valuable. Opendorse notes, that state laws also mandate that, “NIL agreements cannot be in conflict with existing team contracts,” and “Schools, Conferences, and Associations cannot compensate a student-athlete for their NIL.” Therefore, the two restrictions mentioned in this section will apply to students playing both in states that have their own NIL legislation and those that fall under the NCAA NIL interim policy.
Athletes’ Practice Guide to Monetizing Your NIL
There are several avenues for college athletes to utilize to monetize their NIL. The NCAA site provides a useful link to showcase the brands currently working with student athletes, NIL agencies, and NIL marketing support. These resources can be found here. While student athletes can pursue these endorsement agreements on their own, the NCAA highly recommends students use a talent agency to navigate finding these opportunities. The NCAA has noted that there are many legal intricacies to protecting a student athlete’s NIL, including the possibility that student athlete might benefit from trademarking their name or athlete specific slogans. Thus, the NCAA also recommends that students seek legal counsel when pursuing those complex matters, to ensure their rights are fully protected when attempting to profit from their NIL.
How Has the Compensation Landscape Changed Since the NCAA Interim NIL Policy Was Implemented?
Opendorse provides a breakdown of the trends for NIL deals in categories including, total compensation by sport. These statistics can be found here. The statistics provided by Opendorse show that since the passage of the NCAA interim policy over 67% of NIL compensation deals have been to collegiate men’s football and men’s basketball athletes. An additional 7% of these deals go to male athletes in baseball, men’s swimming, men’s soccer, men’s tennis, men’s wrestling, etc. In the remaining 26%, several star female athletes, in sports such as women’s basketball, softball, women’s volleyball and women’s tennis, have been able to secure lucrative NIL contracts. Athletes such as Olivia Dunne, a college gymnast, or the Cavinder twins, college female basketball players, have amassed millions of followers over TikTok and Instagram, and have been able to profit from their widespread social media presence. Dunne has signed a mid-six-figure deal with sportswear line Vuori, while the Cavinder twins signed a five-figure deal with Six Star Pro Nutrition.
This suggests that, since female collegiate athletes only receive 4% of mainstream media coverage, to be attractive to brands, female athletes need to have an extensive social media following and engagement.
Nonetheless, despite the odds, some college female athletes without a social media base have been able to secure commercial deals. University of Southern California beach volleyball player, Julia Scoles, is not only a go-getter on the sand but also in championing her NIL rights. Scoles, who had over 10,000 followers on Instagram, did not have sponsors knocking down her door for deals. But Scoles herself took the reins and began reaching out to brands she personally used and scored deals with Free People and Suja Juice. Scoles has stated that these opportunities are a “good launch pad into my professional career.” Scoles plans to join the Olympics and will use her profits from her NIL deals in college to pay for her coaches and training.
Conclusion: Be Aware of Opportunities and Resources
The biggest takeaway for college athletes is to be aware of their opportunities and resources. The change in NCAA rules has created a very profitable opportunity for college athletes, but all opportunities come with challenges. Between the resources available from the NCAA, their colleges and coaches (and even IP attorneys), many college athletes can now use their considerable skills not only to secure a place in college but also to generate revenue to cover college costs and advance their future goals.