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By: A. Ali Sabzevari
NIL, which stands for name, image, and likeness, should now be a familiar term for anyone who follows college sports.
College athletes across the country are being offered marketing and sponsorship deals in exchange for large sums of money. Historically, payments to student-athletes were forbidden and would result in significant sanctions/discipline. In 2010, UGA star wide receiver A.J. Green was suspended by the NCAA for multiple games for selling his 2009 Independence Bowl jersey for $1,000 even though he paid the money back to charity. In 2014, star UGA running back Todd Gurley was suspended by the NCAA for selling autographs. This year moving forward, however, the commercialization of college athletes’ names, images, and likeness can now be monetized.
According to news reports, Alabama Crimson Tide QB Bryce Young has already signed more than $800K in NIL Deals. Georgia Bulldogs QB JT Daniels signed deals with Zaxby’s, Rhoback, and also a potential six-figure deal with a trading card company. This is big money for college athletes and the upside is tremendous. Athletes and their families as well as lawyers, agents, and representatives all need to take notice of this wave and should begin familiarizing themselves with the NCAA and university rules as well as state laws to ensure compliance.
Many athletes, agents, colleges, and companies will now begin to ask about the strategies to take advantage of NIL and for guidance on the rules and laws, including contract drafting and negotiations.
Essentially what you need to know with respect to the NCAA policy is that collegiate athletes across the country can now profit from their name, image, and likeness. Athletes need to look at the laws in the state where their university is located as well as the university’s rules. Universities are beginning to have their own policies relating to NIL. University policies could dictate royalty payments and disclosure requirements. University policies could also have provisions regarding conflicts with university contracts, ability to obtain professional representation through agents and lawyers, prohibited NIL activities, banned industries, rules regarding the use of institutional names or marks, among other policies. University policy will also govern the use of logos, team gear, copyrights, trademarks, slogans, etc. These policies are most likely already in place at universities across the country and should be publicly accessible.
Athletes also need to be cognizant of reporting requirements and affiliation with substances that have been banned by the NCAA. States may also have their own banned categories and reporting laws.
The income earned from NIL deals will also need to be reported on tax returns and could impact financial aid and scholarships, among other things.
Finally, athletes will begin to trademark certain slogans and brands as well as create websites, marketing materials, and sell their own merchandise. Athletes should consider legal counsel in order to protect their NIL from the use by others.
NIL is extremely new, but several of the business and legal-related aspects of NIL are manageable with counsel. Laws will vary from state to state and policies will vary from university to university. We will inevitably begin seeing lawsuits stemming from violations of university policy and state law. Additionally, lawsuits can spawn from an athlete’s breach of an agreement or contract with a sponsor or violations of certain terms as well as from infringement by others’ use of an athlete’s NIL. Decisions to opt out of a season or transfer can also impact existing and future deals. The new business world of collegiate sports is just beginning (at least for athletes) and so are the legal claims and lawsuits arising from the same.