What is NIL?
NIL stands for name, image, and likeness, which, when considered together, are the elements that comprise an individual’s right of publicity – a right the U.S. first recognized in 1953.
What is an NIL activity?
An NIL activity is essentially any activity in which an individual uses his or her NIL for commercial or promotional purposes, including the following: selling autographed merchandise; making personal appearances; appearing in commercials and print ads; using social media to endorse or promote products and services; forming businesses using their NIL as a client draw; and giving speeches. The list is limitless.
Why has NIL become such a highly discussed and charged topic?
Since its inception more than 115 years ago, the NCAA had imposed an amateurism rule on intercollegiate athletics. The rule prohibited student athletes from participating in intercollegiate athletics if they accepted or received remuneration for using their NIL to advertise, endorse, recommend, or promote the sale or use of a commercial product or service. On July 1, 2021, the NCAA adopted an Interim Name, Image and Likeness (NIL) Policy, which revised its amateurism rule to allow collegiate student athletes to earn money for using their NIL.
What does the NCAA’s Interim NIL Policy say?
Simply put, the NCAA’s Interim NIL Policy provides the following guidance:
- College athletes can engage in NIL activities that are consistent with the law of the state where their schools are located.
- College athletes who attend a school in a state without an NIL law can engage in NIL activities without violating NCAA rules related to name, image, and likeness.
- College athletes can use a professional services provider for NIL activities.
- College athletes should report NIL activities to their schools consistent with state law or school and conference requirements.
Why does the NCAA’s call its NIL Policy an “interim” policy?
The NCAA calls its NIL Policy an “interim” policy because the policy will be in effect until the U.S. Congress passes federal NIL legislation or the NCAA adopts new NIL rules.
Are commentators’ descriptions of the new NIL era as the “Wild Wild West” accurate?
Because NIL is still so new for all involved parties, including the NCAA, student athletes, educational institutions, and private businesses, the “Wild Wild West” description is somewhat accurate but also misleading. Numerous sources either govern and regulate NIL activities or have the abilities to govern and regulate NIL activities:
- The NCAA has adopted its Interim NIL Policy and issued a series of written regulatory guidance intended to clarify and implement the policy.
- A majority of states have passed their own laws regulating NIL activities.
- State high school associations regulate NIL activities for high school athletes.
- National and sport governing bodies regulate NIL activities.
- Colleges and universities regulate NIL activities.
- Athletic conferences regulate NIL activities.
- Although no federal statute regulating NIL activities exists, the U.S. Supreme Court has issued rulings touching on NIL related issues, and the U.S. Congress has already had eight NIL related bills introduced and another NIL bill is rumored to be on its way soon.
NIL’s rules and its business implications are evolving rapidly, and Burr & Forman is constantly monitoring its evolution to keep you and ourselves up to date.
Who is paying student athletes for their NIL?
Various sources are paying student athletes for their NIL. The two most prominent sources are private businesses and NIL collectives.
What is an NIL collective?
There is no single or legal definition of NIL collective. Generally, an NIL collective is either a for-profit or non-profit entity that is formed by one or more athletic boosters of a school, which generates revenue from donations, selling merchandise, offering subscription services, and other ways, and uses that revenue to offer NIL related opportunities to student athletes.
Are NIL collectives legal?
Yes, NIL collectives are legal, but they must comply with all laws, rules, and regulations applicable to their NIL activities.
Can college athletes be paid to play college sports and isn’t NIL compensation simply a way for schools and their athletic boosters to launder money to college athletes?
No, college athletes cannot be paid to play college sports. The NCAA still maintains its prohibitions against “pay-for-play” and improper recruiting inducements/benefits. In other words, schools may not use NIL deals to compensate college athletes for athletics participation (e.g., making a team’s roster), athletics achievement (e.g., points scored, tackles made, or winning a particular award), or for enrollment decisions (e.g., signing a national letter of intent or transferring schools). Each NIL deal must base its compensation on an independent, case-by-case analyses of the value that each athlete brings to the deal, and the deal must have a bona fide quid pro quo (i.e., the athlete must perform services or provide some other consideration for the deal).
Can student athletes engage attorneys to help with their NIL opportunities?
Yes, the NCAA specifically allows student athletes to engage attorneys to represent them in NIL opportunities without affecting their eligibility to play intercollegiate athletics.
What are the qualifications of Burr & Forman’s sports law team and who has it represented in the NIL space?
In addition to all of Burr & Forman’s sports law team being licensed attorneys, team members include National Football League Certified Player Agents and Contract Advisors and licensed athlete agents. Team members have represented, among others, professional athletes, college coaches, and professional sports teams. In the NIL space, Burr & Forman has represented professional athletes, college athletes, NIL collectives, educational institutions, sports agents, and private businesses in connection with NIL activities, deals, and related matters. Notably, Burr & Forman represented an NIL collective in what was one of the first, if not the very first, acquisition of another NIL collective.