The Wild West of name, image, and likeness: NIL roll-out update

Part 3 in the series "The Wild West of name, image, and likeness: Be prepared when the dust settles." 

In just a matter of days, athletic directors across the country went from proactively following century-old NCAA guidelines to reactively trying to navigate unknown territory, with virtually no guidelines.

Changing a sentiment that has stood for 115 years doesn’t generally happen overnight. The long-reaching effects of new state laws and federal court rulings on the use of student-athletes’ name, image, and likeness (NIL) have shifted the power-balance within collegiate athletics and created a legal vacuum.

The U.S. Supreme Court’s ruling in National Collegiate Athletic Association vs. Alston opened the flood gates for college athletes to profit from their NIL, but it failed to address any number of the circumstances playing out across college campuses everywhere. To exacerbate the issue, it appears the NCAA and the federal government have been caught off guard, with little to no planning in place. There remains no national NIL law passed by the U.S. Senate. The Autonomy Five Conferences say in a joint statement “only Congress can pass a national solution for student-athlete NIL rights. We continue to work with Congress to develop a solution for NIL and expand opportunities.”

Further complicating the situation is that various states have passed their own unique laws outlawing schools from prohibiting athletes from financially benefiting from NIL, outside of school activities. Adding even more complexity, different athletic conferences have passed separate rules and the schools within each conference and each state have promulgated their own unique policies! It is a tangled web of organized chaos; a sort of legal puzzle.

Is providing an athlete with a $50,000-a-year internship permissible?

What happens to transfer students if they’re in a state or conference that allows athletes to sign contracts related to use of their name, image, or likeness, and they transfer into a school in a state with different rules?

What happens with the use of school trademarks? Can athletes wear their school uniforms, or do they need to get a license for that? Are schools even allowed to license their trademarks to students?

Can athletes be sponsored by alcohol companies? What about cannabis?

How about international student athletes that have temporary status in the U.S.? What are they allowed to do as far as work limitations on campus? How does this affect their international status?

There is a plethora of legal, tax, and financial implications that impact all of the parties involved and there is simply too much opportunity for parties to sit idle, waiting for a national standard. Schools are starting to partner up with third-party vendors to provide forms and contracts and to negotiate marketing agreements, while businesses are eager to utilize student athletes as brand ambassadors to promote their products and services to the college masses.

It is critical for all of the players involved to familiarize themselves with the ever-changing NIL landscape and the countless legal considerations at play. If you are interested in learning more about NIL laws, please contact McDonald Hopkins. We will continue to provide updates as this story evolves.

In the meantime, here are just a handful of recent NIL developments:

• Hercy Miller, Master P’s son and a Tennessee State commit, signed a $2 million brand ambassador deal with Web Apps America. Read more.
• Haley and Hanna Cavinder, Fresno State women's basketball players, have inked sponsorship deals with Boost Mobile. Read more.
• Bryce Young, a 19-year-old college sophomore and the presumed starting quarterback for the Alabama Crimson Tide this coming season, is reported to already be a millionaire, thanks to eager sponsors. Notably, Young is represented by Creative Artists Agency, which also represents stars like Jennifer Aniston, Tom Hanks, and Derek Jeter. Read more.
• Wisconsin Badger's Football quarterback Graham Mertz launched his own apparel merchandise company. Read more.