In October 2023, the NCAA Division I Board of Directors unanimously approved key proposals aimed at providing clarity and guidance on the intricate landscape of Name, Image, and Likeness (NIL) activities involving enrolled student-athletes. These proposals signify a proactive approach by the NCAA to address evolving issues and ensure a fair and appropriate NIL environment for student-athletes. Let’s delve into the key aspects of these proposals and their implications:

1. Education & Monitoring for Current Students:

One of the fundamental updates in the guidelines pertains to education and monitoring for current students. The NCAA emphasizes the importance of schools providing education on relevant NIL topics such as financial literacy, taxes, social media practices, and entrepreneurship. Additionally, the NCAA encourages schools to extend NIL education to collectives, boosters, and prospects. The guidelines also permit schools to require student athletes to report NIL activities to the athletics department, subject to applicable state laws.

2. School Support for Student Athlete NIL Activities:

The updated guidelines outline the permissible ways in which schools can support student-athlete NIL activities. The guidelines delineate the parameters for direct support, including the provision of stock photos, graphics, or on-campus space. However, restrictions are in place to prevent unequal benefits and maintain fairness. While schools can inform athletes about potential opportunities and collaborate with NIL service providers for a marketplace, negotiations on behalf of entities or athletes are restricted. Instead, student athletes should seek legal counsel for negotiating the terms of NIL deals.

3. School Involvement with Collectives & Other NIL Entities:

A contentious point arises regarding school involvement with collectives and NIL entities. While schools can assist with fundraising, limitations are set to avoid direct cash donations by school personnel. Donors can contribute to collectives, but schools are prohibited from earmarking funds for specific sports or athletes. This introduces a potential challenge as donors, despite legal constraints, wield influence over the allocation of funds.

4. Enforcement of NCAA Rules Related to NIL Policy:

The NCAA emphasizes a stringent approach to enforcing NIL rules, especially for violations that occurred before the proposed clarification. The board directs enforcement staff to pursue cases clearly contrary to the interim policy. The presumption of violation unless proven otherwise creates a distinct shift from the traditional “innocent until proven guilty” paradigm and underscores the NCAA’s commitment to compliance.  However, the NCAA is not immune from challenges to its oversight.  The Attorneys General of Tennessee and Virginia recently sued the NCAA over its attempted oversight, arguing that the NCAA’s regulations violate federal antitrust law.

5. Third Party Administration of NIL Activities:

The board discussed the possibility of using third-party administrators for student-athlete disclosures of NIL activities. While they took no immediate action, the acknowledgment of future discussions highlights the NCAA’s efforts to adapt to evolving legal and political landscapes while retaining control over the NIL domain.

6. Registration of NIL Service Providers:

To enhance transparency, the NCAA proposed a voluntary registration system for agents, financial advisors, and others supporting college athletes in NIL arrangements. A centralized registry would offer student athletes information to make informed decisions, including business background, service descriptions, and fee structures.

7. Disclosure and Transparency:

The board introduced stringent reporting requirements for NIL agreements exceeding a certain value. Student athletes must disclose details of agreements, and schools are obligated to attest to the completeness and accuracy of the information. The emphasis on disclosure aims to prevent violations and protect athletes from potentially harmful agreements.

8. Standardized Contract Terms:

The NCAA recommends standardized contract terms to ensure clarity for student athletes and their families. Specific contractual elements, such as service descriptions, payment structures, and termination clauses, are outlined to safeguard athletes from entering agreements without a full understanding of the terms. This recommendation underscores the need for student athletes to seek representation in contract negotiation and work with an attorney who can help them understand the terms in plain language.  Further, because of the patchwork nature of state NIL laws, a uniform, standard contract is unlikely to effectively address the unique provisions of Virginia law, for example.  That’s why having an attorney well versed in Virginia’s NIL regulatory landscape is essential.

The October 2023 proposals represent a significant step by the NCAA in regulating the complex landscape of NIL activities. Prioritizing student athlete protection and ensuring transparency, the guidelines provide a framework for schools, athletes, and service providers to navigate the evolving world of NIL. As the NCAA continues to monitor and adapt to the changing landscape, these guidelines set the stage for ongoing discussions and potential adjustments in the years to come.

If you are or know a student athlete who may be looking to engage in NIL deals, reach out to us at Dunlap Law to learn how we can help these entrepreneurs navigate the complex art of contract negotiation.