In the wake of the landmark Supreme Court decision in NCAA vs. Alston, the landscape of Name, Image, and Likeness (NIL) rights for college athletes has undergone a seismic shift. The ruling asserted that the NCAA could no longer restrict education-related payments to student athletes, prompting a cascade of changes and challenges across the collegiate sports sphere.
While the Supreme Court ruling in Alston marked a victory for athletes, two essential requirements remain in place: a prohibition on “pay for play” and a restriction against “quid pro quo.” Athletes cannot receive compensation based on performance, and recruits are discouraged from signing NIL deals contingent on choosing a specific school. The NCAA has been clear that student-athletes who violate NCAA eligibility rules risk losing eligibility even if state law permits the behavior.
Virginia’s Current NIL Laws
Here in Virginia, thanks to a 2022 law, student athletes now have statutory right to earn compensation for their NIL and to be represented by an agent and an attorney for the purposes of negotiating and securing NIL deals. Colleges and athletic conferences cannot declare a student athlete ineligible or reduce, revoke, cancel, or not renew a student athlete’s scholarship because the student signed a NIL deal.
However, Virginia’s law includes a long list of limitations that prevent student athletes from endorsing certain products or activities. There are also limits on when student athletes may engage in activities for their NIL deals and prohibitions on use of their institution’s “facilities.” Further, student athletes have duties to disclose their NIL deals to their colleges. In short, Virginia’s law is complicated with a host of caveats, limitations, and prohibitions. It’s a briar patch and student athletes need a lawyer who understands it.
Rise of Endorsements and Collective Involvement
The aftermath of the Alston decision saw a flurry of endorsement announcements, ranging from NFT and Nike deals to partnerships with local businesses. Athletes seized the opportunity to monetize their name, image, and likeness, engaging in agent signings and social media ad campaigns.
However, the emergence of collectives, typically founded by alumni, introduced a new layer of complexity. These entities channel financial resources to athletes in exchange for the rights to use their NIL, but their status as boosters raised concerns about potential violations of recruiting rules, pay-for-play regulations, and Title IX compliance.
NCAA Guidelines and Proposed Enhancements
To address these concerns, the NCAA released new guidelines aimed at curbing booster involvement. In October 2023, the NCAA Division I Council proposed additional measures to enhance student-athlete protection regarding NIL rights. These proposals, which the NCAA is expected to adopt in January 2024, include the development of a voluntary registry for NIL service providers, disclosure requirements for certain elements of NIL agreements, and the creation of an education program for athletes, prospects, and service providers.
As the NCAA navigates this transformative era of NIL rights, the evolving guidelines are poised to become the de facto law of the land. Despite the historic inertia of the NCAA, recent developments indicate a willingness to let the NIL landscape unfold naturally while simultaneously implementing guidelines to mitigate potential issues.
According to Stan Wilcox, an NCAA executive vice president, “schools must adhere to NCAA legislation even when it conflicts with permissive state laws”. The NCAA’s authority over schools is evident in the potential consequences for non-compliance, including coaching suspensions, playoff exclusion, and retroactive removal of wins and championships.
The NCAA’s approach to NIL regulation reflects a delicate balance between empowering athletes and maintaining institutional control. As the organization continues to refine its guidelines, schools are likely to align with NCAA regulations to avoid severe penalties.
The journey of NIL in the NCAA is just beginning, and stakeholders must stay vigilant as the landscape continues to evolve. NIL deals are complex, and like any business deal, these licensing deals need careful legal review. As business and IP attorneys, we can help athlete entrepreneurs understand and negotiate the terms in their NIL business.