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Let’s Talk NIL Deals

In an age where being an “influencer” is easily attainable, it is not shocking that compensation for college athletes has become a priority. As of July 2021, college athletes are able to receive compensation for the use of their “name, image, and likeness.”

This opens a new door for young athletes trying to make a name for themselves. But what actually are NIL deals?

Understanding NIL Rights and Deals

To understand what an NIL deal does, it is essential to understand why they are important. States have either relied on common law, which is law that comes from judicial opinions, or have passed statutes to establish the right to publicity. The right to publicity protects an individual’s name, image, or likeness from exploitation. This means everyone has the right to allow or prevent the use of their identity for all commercial and some personal uses. The key here is consent of the individual.

A violation of an individual’s right to publicity can lead to a costly lawsuit with a large amount of damages. That is where NIL deals come into play. To prevent lawsuits, companies enter into agreements that grant them permission to use the name, image, or likeness of individuals. These agreements come in many styles like release forms or clauses in endorsement contracts.

Whether it is Betty White and Snickers or Aaron Rodgers and State Farm, there will always be an agreement regarding consent and compensation.

NIL Deals in College Sports

Prior to 2021, the NCAA prohibited athletes from receiving compensation of any kind outside of scholarships and stipends. The intent behind the ban was to draw a line between professional athletes and college athletes. College athletes were seen as “amateurs,” and not employees. At the same time, the NCAA and its schools were able to use the name, image, and likeness of those “amateurs.”

 

In 2019, California passed the Fair Pay to Play Act which created a statutory right for college athletes to receive compensation for commercial use of their identity. In other words, the Act made it illegal for colleges in California to deny student athletes the right to capitalize off of their name, image, and likeness. The law was set to take effect in 2023, and would trump any NCAA rules. Several states such as Florida began to follow suit. This led the NCAA to redraft its rules regarding athlete compensation.

However, before any rule changes were finalized, the Supreme Court held that the NCAA was in violation of federal antitrust laws by placing limits on education-based benefits for student. Because the Court found that the NCAA is subject to antitrust laws, the ruling indirectly affected the way the NCAA could restrict commercial compensation for athletes.

By July 2021, the NCAA approved a new set of rules that allows athletes to accept outside compensation. Today, most states have passed laws recognizing the right of college athletes to benefit from their name, image, and likeness.

Reilyn Turner Nike First Student Athlete Sponsorship - Nike News
Reilyn Turner for Nike. Image curtesy of news.nike.com

Since then, there has been a wave of collegiate NIL deals. Nike signed its first student athlete, Reilyn Turner, in December 2021. Tom Brady has even joined in by signing deals with several athletes for his athletic apparel coping The Brady Brand.

The Future of NIL Deals

New Sports Law Book Dives Deep into What It Means to Be a Sports Lawyer | Inc.com
Image curtesy of inc.com.

As a result of the NCAA rule change, understanding what these rules and laws do is important in 2022 because collegiate NIL rights are still evolving.

A common objective throughout law is uniformity. Uniformity makes laws easy to abide by, to enforce, and to judicially interpret. That is why we might see states draft new collegiate NIL laws in the future, so that they match those of their sister states and the states in which most companies conduct business out of. Additionally, there has been a push for federal action. If Congress enacts a law that prescribes NIL rights for college athletes, every state and the NCAA must follow it.

The NCAA is currently preparing for a 2024 trial date in the case of In Re College Athlete NIL Litigation. This is another federal antitrust case, however it will directly affect student NIL rights. Former students allege that the NCAA violated federal antitrust laws by conspiring to deny college athletes the opportunity to receive compensation for the use of their NIL. To show that the NCAA was wrong to deny NIL rights to athletes, the new NIL rules may come into play. Obviously the outcome of this case will affect the current NIL rules, and future changes may be made.

With the expansion of collegiate NIL laws comes the talk of high school athletes and their right to publicity. As it stands, the NCAA allows for high school athletes to participate in NIL deals. Some sates, such as California, have passed laws that specifically grant high school athletes NIL rights. We can expect an expansion of these rights as more high school athletes dabble with NIL deals.

Know the Applicable Laws

LIVE NOW: Interactive NIL State Regulation Map! - Spry
Interactive NIL laws map curtesy of Spy Insights.

If you are a student athlete, it is important to know what laws and rules you must follow when entering into NIL deals. NIL deals must conform to state laws, school rules, and association rules. These provide guidelines for things such as the type of products and services athletes can promote, the amount of compensation allowed, and the use of school marks and logos. Student athletes should consult a lawyer to ensure their rights are being protected and to prevent bad NIL deals from affecting the future of their career.

 

– Hailee Murphy (@TheHaileeMurphy on Twitter)

OutOfYourLegally@gmail.com

Feature image curtesy of AthleticDirectorU.com.

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