What student-athlete name-image-likeness activities could become permissible if the NCAA’s recently published proposal gets adopted?
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What student-athlete name-image-likeness activities could become permissible if the NCAA’s recently published proposal gets adopted?
The NCAA NIL Working Group published the initial iteration of its NIL legislative proposal in response to the charge set by NCAA Board of Governors
The draft NIL legislative concept puts student-athlete NIL activities into two main categories: student-athlete business activities and non-institutional commercial or charitable promotional activities
A summary of the proposed student-athlete NIL activities that would become permissible if this legislative concept is adopted
The remainder of 2020 is the time period for NCAA membership to review, comment, and identify questions and scenarios for the NCAA NIL Legislative Solutions Group and Division I Council to consider in refining the concept
The Division I Council is on deck to review and vote on the proposal in late January
NIL Legislative Concept Background
The NCAA finally published last week its legislative proposal intended to codify more expansive flexibility for NCAA student-athletes to use their name-image-likeness (NIL) for their economic benefit while remaining consistent with NCAA amateurism principles and guidelines. The next two-plus months are critical for the NCAA membership to review, critique, and raise questions and real-world scenarios that could improve the final version of the NIL proposal.
This week’s edition of Athletics Veritas focuses on the following:
The overarching charge the NCAA Board of Governors placed on all three NCAA divisions as it relates to pursuing student-athlete NIL policy change;
The two primary categories of student-athlete NIL activities that are the focus of proposed flexibility; and
A compilation of specific student-athlete NIL and amateurism-related real-world activities that would become permissible should the draft NCAA proposal be adopted.
How did we get to this point?
Via the NCAA Board of Governors’ referral for all divisions to consider as a high priority legislative change to allow student-athletes the opportunity to benefit from the use of their NIL consistent with the collegiate model, the NCAA Division I Council and Board of Directors formed the NCAA Division I NIL Legislative Solutions Group and charged it with the review of issues related to NIL. The Legislative Solutions Group developed a concept that would permit Division I student-athletes to benefit from the use of their NIL consistent with the Board of Governors’ principles and guidelines.
The NCAA noted that the legislative concept is intended to apply to activities in which a student-athlete permits the use of and/or receives compensation for the use of their NIL in noninstitutional promotional activities.
Current legislation will continue to apply to permit institutional promotional activities under Bylaw 12.5.1. For example, Division I schools would still be permitted to use a student-athlete’s NIL in instances such as the athletic department’s social media promotions, the publication of game programs, schedule calendars for the student-athlete’s team, and advertisements promoting the athletics program, to name a few.
Classifying the Proposed Permissible NIL Activities Into Two Categories
The NCAA outlined two primary categories of student-athlete NIL activities that are considered non-institutional promotional activities or, in essence, activities not promoting an institution or its athletics program and activities that will be without direct institutional involvement. Those two categories are:
Student-athlete business activities; and
Non-institutional commercial or charitable promotional activities.
Part I: Student-Athlete Business Activities
In the student-athlete business activity column for deregulating NIL activities, the NCAA legislative concept holds that student-athletes may promote their athletically and non-athletically related business activities (e.g., products, services, camps/clinics, personal appearances).
A student-athlete’s promotion of their business activity may include a reference to the student-athlete’s involvement in intercollegiate athletics and a reference to the institution they attend, consistent with institutional policies applicable to any student. However, no institutional marks may be used in such promotional activities.
Student-Athletes Conducting Private Lessons, Camps, and Clinics
Although current NCAA rules permit student-athletes to receive compensation for teaching private lessons, they are not permitted to use their names, pictures or appearances to promote the availability of such lessons. Further, student-athletes are precluded from conducting their own camps or clinics.
These current NCAA standards have presented fairly awkward navigation for student-athletes and athletics compliance departments as student-athletes could receive compensation for their athletics expertise by providing private, one-on-one lessons, but could not advertise or otherwise use their NIL to promote the endeavor. Rather, student-athletes had to rely on word-of-mouth referrals to generate private lesson clients. Another traditional restriction regarding private lessons held that NCAA institutions could not allow their own student-athletes to use institutional facilities to provide private lessons.
The NCAA’s new NIL concept would permit student-athletes to use their NIL to promote the availability of private lessons, as well as operate their own camps and clinics. Also, use of institutional facilities would be permitted and, if used, all applicable institutional processes must be followed for renting facility space in a manner consistent with the general public (e.g., charging regular rental rate). The rationale for flexibility in this area is to give more economic opportunity for a student-athlete to benefit from his or her athletics expertise.
The evolution of student-athlete-operated camps and clinics leads to additional questions. First, most Division I coaches run their own camps and clinics and permissibly employ student-athletes in those camps. Will there be enough room in the marketplace for separate camps run by coaches and student-athletes? If so, will student-athletes have the bandwidth to work both? It’s very possible student-athletes could pursue both avenues.
Second, operating camps and clinics is a sector with many seasoned event operators. Perhaps a new vertical for those camp and clinic operators is to be the operations service provider for student-athletes who need help setting up their own camp and clinic operations (e.g., registration; background checks; facility rentals; insurance).
Student-Athletes’ Using NIL to Sell Their Own Products and Services.
Beyond camps, clinics, and private lessons, the NCAA’s NIL concept also delves into what a student-athlete may do in terms of promoting his or her own products and services. In accordance with current legislation, student-athletes may not use their NIL to promote their own products or services. This NCAA rule restricting a student-athlete’s ability to promote their own products or services, especially in non-athletics endeavors, with their own NIL was one of the flashpoints that elevated the perceived unfairness of the NIL restrictions on student-athletes. For example, NCAA student-athletes pursuing a variety of entrepreneurial projects that could lead to revenue opportunities for themselves were prohibited by the letter of NCAA law. This included student-athlete-led projects clearly distinct from the athletics world such as publishing their own music, artwork, or designing clothes.
In recent years, the NCAA staff routinely approved legislative relief waivers to permit student-athletes to use their NIL to promote these types of nonathletically related products or services. The key word to that brief waiver history is “nonathletically” related products or services.
The NCAA’s new NIL concept would go beyond the recent waiver relief and would permit the use of a student-athlete’s NIL for both nonathletically and athletically related business activities. So, in addition to publishing music, a baseball or softball student-athlete could use their NIL to endorse an equipment manufacturer’s baseball or softball bat.
The NCAA’s concept for product- and service-type endorsements by student-athletes would permit a student-athlete to include their status as a student-athlete and institutional affiliation in any such promotions subject to institutional policy. On the flipside, the proposed NIL rule would not permit the use of institutional marks in such promotions.
General items (e.g., memorabilia) purchased by a student-athlete through normal retail sales and resold will be subject to the business activities parameters. Those parameters, per the NCAA proposed concept, would preclude institutional involvement in the activity (e.g., special discounts on memorabilia afforded to the student-athlete) and institutional repurchase of the products. These parameters are primary examples of how the NIL concept is intending to keep the NCAA member institutions at arm’s length from the student-athlete’s business transactions. Such items may be sold at any time by the student-athlete, subject to appropriate guardrails, including institutional parameters related to the resale of items that include institutional marks and disclosure of the sale.
These guidelines still necessitate real-world sorting. What institutional NIL policies need to be added or amended to determine when and how student-athletes can use institutional marks? For example, if a student-athlete’s side hustle was being a musician and they put together a music video for YouTube and planned to wear their institution’s jersey or warm-up top in the video, what institutional permission(s) does the student-athlete need to secure in advance? Could an institution charge a fee for such usage? The draft NIL concept could hold that the student-athlete would have to have the institution's logo or mark blurred out in the video or, alternatively, not wear any apparel featuring institutional marks.
Student-Athletes Monetizing Autographs
Another business activity that NCAA rules have traditionally intended to keep non-monetized are student-athlete autographs. The new NIL concept would permit an individual to be paid for their autographs as a business activity or in conjunction with a commercial endorsement or appearance. This proposed flexibility for autographs exemplifies one NCAA bedrock principle of treating student-athletes similar to the general student-population. If a popular, non-athlete student on your campus could earn money signing autographs, why couldn’t a student-athlete do the same?
The proposed permissiveness around autographs does come with conditions, though. A student-athlete would not be permitted to receive compensation for signing an autograph while participating in required athletically related activities or otherwise representing the institution. For example, a basketball student-athlete could not set-up an autograph signing in the arena lobby an hour before tip-off when the student-athlete would be required to be involved in team pregame activities (e.g., warm-ups; Xs and Os in the locker room).
The sales of autographs would be subject to disclosure requirements, and no institutional marks (e.g., apparel) may be used in conjunction with the sale of autographs. These prospective parameters also lead to more questions such as what details would need to be included in disclosures? And to whom? And does the restriction on using institutional marks restrict what the student-athlete is wearing at an autograph signing? The parameters specific to resale of memorabilia and apparel by student-athletes will be closely tied to autograph opportunities in the new NIL world.
Student-Athletes Using NIL to Crowdsource
The advent of new tech-driven transactions is also addressed in the NIL concept put forward by the NIL Legislative Working Group. Generally speaking, a student-athlete may not use their name, picture or athletics reputation to solicit funds through a personal online profile or crowdfunding site (e.g., Gofundme; Kickstarter), except as permitted by NCAA legislation. Current legislation allows student-athletes to crowdfund for nonprofit or charitable organizations and in response to extreme circumstances; however, the organization or institution must arrange and oversee the fundraiser. Further, student-athletes are permitted to crowdfund to cover actual and necessary outside competition-related expenses.
One challenge to NCAA schools’ role in monitoring and managing the current crowdfunding landscape as it relates to student-athletes is the bureaucracy and time-sensitive nature tied to such undertakings. For example, a student-athlete finds out about an emergency/disaster in their hometown and wants to crowdfund immediately to help in the recovery efforts, but his or her school must vet, review, and document the background details to make sure NCAA conditions are met. The NCAA’s new legislative concept would permit student-athletes to solicit funds through crowdfunding sites for the following purposes without requiring the institution to be involved for purposes other than monitoring that the funds raised are not above the actual and necessary expenses from a catastrophic event or hardship:
Nonprofit or charitable organizations;
Catastrophic events; and
Family hardship
The new concept would also permit student-athletes to solicit funds through crowdfunding sites for educational expenses that are not included in their cost of attendance (e.g. mission trips, internships) provided there is no institutional involvement. The recommendation to streamline these crowdsourcing initiatives should be well-received because, on its face, crowdsourcing for these initiatives are well-intended in purpose and not ripe for abuse.
Any raising of money for business activities (e.g., soliciting venture capital) would be subject to the same NCAA requirements as other business activities, including disclosure requirements along with any additional external regulations.
This change maintains current restrictions on personal fundraising for traditional elements of financial aid (e.g., tuition, fees, room and board) as well as restrictions on “pay for play” (e.g., use of crowdfunding to send funds a football student-athlete for scoring two touchdowns in previous game) arrangements.
Permitting student-athletes to use their NIL for crowdfunding initiatives allows student-athletes to engage in activities in the same manner as their peers who are not student-athletes, supports student-athlete well-being and removes bureaucracy surrounding such activities.
Part II. Non-institutional Promotional Activity Opportunities for Student-Athletes
The second promotional category addressed in the NCAA’s new NIL concept involves non-institutional promotional activities. These would include compensation to a student-athlete for endorsement of a commercial and/or charitable, educational or nonprofit entity.
The baseline expectation in this part of the NCAA’s NIL concept is that institutions may not be involved in securing the arrangement of NIL opportunities for a student-athlete.
Based on the new NCAA concept, a student-athlete involved in a non-institutional promotional activity would be permitted to reference their involvement in intercollegiate athletics generally but would not be permitted to reference their status as a student-athlete at a particular institution. We begin to see how the NCAA’s concept is intending to keep student-athlete NIL matters somewhat separate from the direct involvement by, or veneer of, the student-athlete’s institution.
Current NCAA rules restrict a student-athlete from using their NIL to promote a commercial product or service. While enrolled at an NCAA institution, a student-athlete may not receive payment from or permit the use of their name or picture to advertise, recommend or promote directly the sale or use of a commercial product or service of any kind unless such activity meets the exception for continuation of modeling and other non-athletically related promotional activities.
In addition, current legislation does not permit a student-athlete to receive compensation from an employer because of the publicity, reputation, fame or personal following that they have obtained because of their athletic ability. For example, a high-profile student-athlete being hired by a commercial company as its brand ambassador who, in turn, has his or her NIL used to promote their affiliation with said company. Further, a student-athlete may not use their NIL to promote the sale of athletics equipment. As we see, NCAA rules on NIL were functionally a patchwork of one-off, situation-specific legislated prohibitions and exceptions -- whether it was an incoming student-athlete with a modeling career in their youth or an offer for current student-athletes to endorse athletics equipment. A variety of legislative gymnastics has been a hallmark of NCAA amateurism rules.
Globally, the NCAA’s NIL concept would intend to permit an individual the use of his or her NIL in noninstitutional promotional activities and be compensated for the use of their NIL to advertise or promote the sale or use of athletically and nonathletically related commercial products or services, provided:
No institutional marks are used;
The institution is not involved in the development or promotion of the activity;
The institution is not involved in the arrangement or development of the relationship between the student-athlete and an involved individual or commercial entity; and
No institutional facilities are used.
A student-athlete would be permitted to reference their involvement in intercollegiate athletics generally but would not be permitted to reference their status as a student-athlete at a particular institution.
The NCAA NIL concept would continue to restrict student-athletes from receiving compensation for athletics performance or participation. The NCAA noted that student-athletes should be permitted to take advantage of opportunities to be compensated in the same ways as are available to nonstudent-athletes. As technology continues to evolve, such opportunities will continue to increase, particularly through the use of social media such as student-athletes serving as social media influencers.
Student-Athletes Using NIL to Model Apparel
In addition, the NCAA’s new NIL concept relents on the longstanding restriction tied to modeling athletics apparel. The new concept would permit student-athletes to model any apparel, including athletics apparel, and allow them to take advantage of any opportunity of this nature without concern for their eligibility. Additionally, such a change would reduce monitoring burden as it will eliminate the need to educate student-athletes regarding the type of modeling that is permissible.
Interestingly, the apparel endorsement component of the new NCAA NIL world will spark interesting questions about how institutions may permissibly restrict its current student-athletes’ endorsement deals with apparel manufacturers that are competitors with the institution’s primary apparel provider. Conversely, questions on whether the primary apparel provider of an NCAA member institution may secure an NIL agreement with a student-athlete for their own individual endorsement agreement also await.
Student-Athletes Making Personal Appearances
Current legislation restricts a student-athlete from using their NIL to promote a commercial product or service, including receiving payment for personal appearances. The new NCAA concept would permit an individual to be compensated for personal appearances, including those at commercial locations and/or charitable, educational or nonprofit agencies.
This proposed change, in part, begins to distance institutions from student-athletes’ involvement with charitable and non-profit entities from an endorsement and affiliation standpoint.
In terms of boundaries around personal appearance, the student-athlete would not be permitted to reference their institution and no institutional marks could be used in such appearances. Similar to autograph signings, whether a student-athlete could wear team-issued apparel to a personal appearance may be crossing the line per the draft concept.
This personal appearance carve-out reflects the timing of NIL opportunities with a student-athlete’s peak in popularity. Many student-athletes may have limited opportunities in their lifetimes to profit from their NIL. If a market exists for a student-athlete to be compensated for an appearance, they should be permitted to capitalize on that potential, provided the compensation is not an inducement to attend an institution or “pay for play” compensation.
Moreover, the NCAA noted that an NCAA institution is permitted to request student-athletes to appear voluntarily on its behalf as part of being a member of an athletic team (e.g., institution fundraiser). Allowing student-athletes to be compensated for their independent appearances provides opportunities outside of official institutional appearances.
Next week, Athletics Veritas will dive deeper into the NCAA’s draft NIL concept including the potential for expanded involvement with professional services to assist student-athletes in managing their NIL opportunities as well as the new NIL regulatory framework that would be established.
Athletics Veritas is presented for information purposes only and should not be considered advice or counsel on NCAA compliance matters. For guidance on NCAA rules and processes, always consult your university’s athletics compliance office, conference office, and/or the NCAA.
