August 18, 2021
On June 30, 2021, the National Collegiate Athletic Association (NCAA) for the first time granted its student-athletes the ability to benefit from their name, image, and likeness.
The NCAA’s decision came on the heels of a damning United States Supreme Court opinion issued on June 21, 2021. Nat’l Collegiate Athletic Ass’n v. Alston, 141 S. Ct. 2141, (2021). In Alston, the Supreme Court upheld a decision by the United States District Court for the Northern District of California which struck down NCAA rules limiting the education-related benefits that schools may offer student-athletes, including rules that prohibit schools from offering graduate or vocational school scholarships, on the basis that such rules violated antitrust law. Id., at 2147.
Writing in concurrence, Justice Kavanaugh indicated that additional NCAA compensation rules would likely run afoul of antitrust laws were they to be challenged. Id., at 2166. Justice Kavanaugh wrote that “serious questions whether the NCAA’s remaining compensation rules can pass muster under ordinary rule of reason scrutiny. Under the rule of reason, the NCAA must supply a legally valid procompetitive justification for its remaining compensation rules. As I see it, however, the NCAA may lack such a justification.” Id., at 2167. Justice Kavanaugh further wrote that the questions resolving the NCAA’s remaining compensation rules could be resolved through litigation, legislation, or (in a surprising recommendation from Justice Kavanaugh) through collective bargaining. Id., at 2168. Then, in closing his concurring opinion, Justice Kavanaugh placed the NCAA on notice of just how at-risk its remaining compensation rules were:
To be sure, the NCAA and its member colleges maintain important traditions that have become part of the fabric of America—game days in Tuscaloosa and South Bend; the packed gyms in Storrs and Durham; the women’s and men’s lacrosse championships on Memorial Day weekend; track and field meets in Eugene; the spring softball and baseball World Series in Oklahoma City and Omaha; the list goes on. But those traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated. Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate. And under ordinary principles of antitrust law, it is not evident why college sports should be any different. The NCAA is not above the law.
Perhaps seeing the writing on the wall, the NCAA then adopted an interim Name, Image, and Likeness (NIL) policy. The interim NIL policy is in effect from July 1, 2021 until federal legislation or new NCAA rules are set forth.
Some student-athletes took advantage of the NCAA’s police change immediately: Alabama quarterback Bryce Young, who has yet to start a game for the Crimson Tide, reportedly had signed deals worth more than $800,000 just four weeks after the NCAA policy went into effect.
What is allowed under the NCAA’s NIL policy?
Simply put, the NCAA’s NIL policy allows a student-athlete to use their own name, image, and likeness for commercial and promotional purposes. In other words, a student-athlete is permitted to sell their name, image, and likeness, whether through the sale of products or through using their name, image, and likeness to endorse a product or business.
Student-athletes are further permitted to use a “professional service provider” to assist them with NIL activities. A “professional service provider” is defined by the NCAA to be those who provide third-party services to a prospective or current student-athlete, including an agent, tax advisor, marketing consultant, brand management company, or an attorney.
What is not allowed under the NCAA’s NIL policy?
Under the NCAA’s NIL policy, there are still some restrictions on the deals that a student-athlete may negotiate. Under the policy, a student-athlete may not enter into an:
- NIL agreement without quid pro quo (a student-athlete may not be compensated for work that is not actually performed);
- NIL compensation which is contingent upon enrollment at a particular school (for example, the NIL agreement may not require a student to enroll, or stay enrolled, at Boise State as a condition of the compensation agreement);
- NIL agreement which is contingent upon athletic participation (a student-athlete may not enter into an agreement which uses athletic performance, such as winning Mountain West Player of the Year, as a condition of the agreement);
- NIL agreement in which the institution (such as the University of Idaho) pays for using the student-athlete’s name, image, or likeness.
Which Idaho law applies to NIL agreements?
Idaho is not among the 24 states which have passed an NIL specific law.
Idaho does have a law regulating sports agents, the Revised Uniform Athlete Agents Act (I.C. § 54-4801 et. seq.), as does the federal government, the Sports Agent Responsibility and Trust Act (15 U.S.C. § 7801-7807). Idaho NIL agreements also have to comply with Idaho and federal law governing contracts, taxes, and the like.
What regulations, if any, have athletic conferences passed regarding NIL?
The Mountain West Conference and the Big Sky Conference have not yet passed conference-wide NIL policies. The Big Sky is reportedly looking into options to help their institutions maintain compliance. The Big Sky has partnered with INFLCR to assist student-athletes with maximizing the NIL value, as did Boise State.
Though the two conferences have not yet passed conference-wide NIL policies, any student-athlete who is considering entering into an NIL agreement should continue to monitor the conference’s policies as things continue to develop.
What regulations have the schools passed?
All schools have passed or will pass their own regulations regarding NIL agreements. For example, Boise State has indicated that a student-athlete will not be able to use Boise State’s logo or facilities in advertisements. Boise State also will not permit a student-athlete to endorse alcohol, tobacco, gambling, or marijuana companies, according to Boise State compliance director Matt Brewer. Additionally, Boise State will require that all endorsement deals be vetted by Boise State to ensure that the deals adhere to state and school regulations and that athletes are receiving fair market value. Idaho State University has instituted similar restrictions.
What’s next for Idaho student-athletes looking to capitalize on their name, image, and likeness?
NIL laws and policies differ from school to school, state to state, and conference to conference. The laws and policies are rapidly changing and will continue to do so as institutions and jurisdictions begin to understand the new landscape. Student-athletes should welcome the opportunity to capitalize on their name, image, and likeness, but should proceed with caution.
Student-athletes should discuss any proposed NIL agreement with their compliance director and should consider consulting with an attorney to ensure that any NIL agreement does not run afoul of the policies of their school, policies of their conference, and state and federal law.
The attorneys at Gjording Fouser are available to assist with any questions a student-athlete might have so please feel free to contact us at 208-336-9777.