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Key Questions And Takeaways From The NCAA’s Recent NIL Guidance - Part II
Executive Summary:
Campus personnel begin to digest the NCAA’s recent NIL guidance.
The NCAA’s recent NIL guidance focused on activities surrounding current student-athlete NIL activities.
Conferences are referenced in the recent NIL guidance in terms of sample impermissible NIL activities at a league-wide level.
Coaches and staff members’ student-athlete friendly behaviors (e.g., donating tickets or suite access to third-parties to incentivize the third-party to commit to NIL deals) would seemingly need to be reined in.
Gradations of what constitutes ‘pay-for-play’—direct or indirect— are also surfacing in the NIL environment
Conflicts of law— NCAA bylaws vs more permissive state laws— remain a bellwether issue reflecting the broader complications.
[Editor’s Note: AV offers a two-part series analyzing the recent NCAA NIL guidelines. The full script of the recent NCAA guidelines is at the bottom of this article.]
AV offers Part II in its two-part series highlighting key takeaways and questions raised from the NCAA’s recent NIL guidance.
NIL Resources for Student-Athletes Can be Seen as Impermissible Extra Benefits
The recently-released NCAA NIL guidance also brings to the forefront how and to what extent on-campus monitoring and enforcement of NIL-related rules will now be deployed in terms of resources, access, and other benefits that might be made available to student-athletes for their NIL pursuits. The NCAA NIL guidance states, for example, that schools may provide assistances in developing materials and product (e.g., develop promotional materials), provide services related to NIL (e.g., tax preparation), or provide access to equipment (cameras, graphics software) only if such resources are available to the general student body in alignment with the extra benefits rule.
Some athletic departments have gone down the road of investing in “creation studios” in which a variety of cutting-edge tech and equipment to enable student-athletes to create NIL-related content is being offered— and those same spaces and equipment aren’t necessarily available to the general student population.
This NCAA’s guidance is also contoured by prior NIL guidance that stated class activities and work products from said classes generated by student-athletes that may be related to their NIL activities would be a safe haven of institutional assistance.
Conference Level Broadcast Rights & NIL Compensation
Conference offices within the NCAA were also referenced in the recent NIL guidance as it pertains to restricting league-wide approaches to creating or providing student-athletes with “broadcast revenue” or “NIL revenue."
These revenues may be inclusive of potential licensing revenue for student-athletes from video rights owned by the conferences in addition to any sharing or allocation of media rights revenue to student-athletes that the conferences also manage.
What constitutes an NCAA School entering a contract with the Student-Athletes and their NIL?
Other complications from the guidance point to NIL transactions that would inevitably involve multiple parties including a student-athlete and their NCAA member school. The NCAA’s recent NIL guidance states that an institution may not enter a contract with the student-athlete to help sell a product related to a student-athlete’s NIL.
A prime example where a student-athlete’s NIL product could involve an institution to some degree is the selling of jerseys or other merchandise with the student-athlete’s NIL. In these instances, a third-party vendor (like an apparel provider or sporting goods distributor) could be the central party administering the NIL deal and negotiating separately with the student-athlete and the NCAA school. The lines between institutional involvement and “round-about” institutional involvement are becoming even slighter.
An institution could be involved in different aspects of a student-athlete’s jersey deal through licensing its marks for the jersey product to allowing the sale of said jerseys in the NCAA school’s on-campus bookstore or apparel shops. The point being that institutions are getting involved with student-athlete NIL product development, distribution and points of sale and whether an institution “enters into a contract” with the student-athlete directly, indirectly through university vendors, and begs the query of ‘what constitutes entering in to an NIL contract with the student-athletes?’
Other NIL Scenarios Project Gradations of Pay for Play
The NCAA’s fundamental rule of not paying athletes compensation could be tested in a few other ways, too. The Olympic movement and national governing bodies, for example, can carve out exceptions to compensate athletes on national and Olympic teams for participation and competition. It’s possible that, for example, U.S. national team members receive financial benefits for competing in a particular exhibition match beyond actual and necessary expenses. Any college athletes that are competing on that national team would not be eligible to receive the compensation their national team teammates do.
The recent NIL guidance noted that student-athletes could not be compensated for promoting competition they are participating in. That would leave the door open to student-athletes on one team (e.g., MBB) promoting and endorsing the competition of student-athletes in other sports (e.g., WBB) at the same school.
Title sponsors to college sports events such as bowl games or early season basketball tournaments may draw more scrutiny as they seek to use the NIL of involved student-athletes to promote their bowl game or tournament.
Another example of the different shades of pay-for-play scrutiny is when student-athletes are compensated for selling tickers or suites for the venue that hosts the same competition the student-athletes are participating in.
Laws of the Land
Where state NIL laws collide with long-standing NCAA rules, including ones referenced in the recent NIL guidance, reflect another complicating factor. States like Missouri have amended their NIL state laws to specifically greenlight coaches and staff at NCAA member schools in their state to “… actively help student-athletes get (NIL) endorsement deals.” That state law directly conflicts with the NCAA’s bylaws and guidance specific to NIL. The conflicts of state laws with NCAA rules are becoming the vehicle by which some schools are purposefully involved with NIL deal-making while others are seemingly staying closer to the inbound lines. The NCAA’s guidance was couched with disclaimer that its guidance was “subject to state laws…”
In total, the lack of uniform law for all NCAA schools is perpetuating the cycle of volatility and inequitable rules and outcomes.
These are merely a few of the questions and takeaways from the NCAA’s recent NIL guidance, which is captured below in full script.
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.
