The creators has arrived

From September 2019—when California became the first state to pass a name, image, and likeness (NIL)law—until now, the intercollegiate athletic community has fielded a deluge of new enacted and proposed regulations from states, Congress, the NCAA, and now individual institutions. As the proverbial NIL floor was shifting, there was one thing on everyone’s minds: July 1, 2021.

As of July 1, college athletes nationwide can monetize their name, image, and likeness. If an institution is in a state without an effective NIL law on July 1, the institution is responsible for adopting its own NIL policy. Meanwhile, institutions in states with an effective NIL law on July 1 can also adopt their own NIL policy, but they must abide by their state’s NIL law.

How did we get here?

In 2020, Florida became the first state to enact NIL legislation with a July 1, 2021 effective date, but it was soon followed by many others. In fact, NIL laws in six states—Texas, Alabama, Florida, Georgia, Mississippi, and New Mexico—and executive orders in two states—Kentucky and Ohio—wentinto effect on July 1. These states will be followed by 13 others that have enacted NIL legislation with later effective dates.

As the number of states with a July 1 effective date grew, the fact that institutions in different states would be subject to different NIL regulations produced two principal concerns. The first was uncertainty about how the NCAA would enforce its amateurism rules, which had long prohibited athlete monetization of NIL at any member institution. The second concern involved equity and the question of whether institutions in states permitting NIL monetization would be at a recruiting advantage. One obvious solution to the state-by-state patchwork would be a national NIL rule. To this effect, the NCAA was set to vote at its 2021 Convention in January on new NIL legislation. The vote wastabledin all three divisions, however, due to “recent judicial, political and governmental enforcement events, including communication from the U.S. Department of Justice Antitrust Division.” Notably, the Department of Justice letterstatedthat the proposed NIL rule changes “may raise concerns under the antitrust laws.” The letter further asserted that “the antitrust laws demand that college athletes, like everyone else in our free market economy, benefit appropriately from competition.” After this January 2021 letter warning of an antitrust violation, all eyes turned to theNCAA v. Alstoncase being heard by the Supreme Court in March.

While the prospects of a national NIL rule from the NCAA were put to the side, pressure mounted to get a federal bill passed. This pressure included the NCAA lobbying explicitly for Congress to grant the organization a blanket antitrust exemption. To date, there have been at least eightproposedfederal NIL bills. Although a federal NIL law is possible some time in the future, as the months passed, it became clear that the law would not be enacted by July 1. NCAA president Mark Emmert acknowledged this in hisletterto the NCAA member institutions on June 18, 2021. In the letter, Emmert cited the delay in federal NIL legislation and urged the membership in all three divisions to act immediately to provide student-athletes an NIL rule by July 1.

A mere three days later, on June 21, 2021, the Supreme Court dropped its bombshelldecisioninNCAA v. Alston. TheAlstoncase unanimously held that the NCAA’s limitations on education-related benefits provided to student-athletes violate antitrust law. Although the case was limited to the more narrow question of education-related benefits, the decision will likely have broader implications for NCAA rules generally. The tone for any upcoming NCAA NIL rule change was set by the now famous line in Justice Kavanaugh’s concurrence that “the NCAA is not above the law.” TheAlstondecision and the critical language in Justice Kavanaugh’s concurrence brought everyone’s attention back to the Department of Justice warning in January: NCAA NIL rule changes may implicate antitrust regulations.

Following theAlstondecision, on June 23, 2021, Emmert sent out another memo to member institutionsstatingthat “permanent NIL rule changes by July 1 are unlikely due to the legal environment.” Emmert suggested that interim NIL policies be adopted instead until some federal legislation or permanent NCAA rule could be adopted.

In line with Emmert’s June 23 letter, the Division I Councilvotedon June 28 to recommend that the Board of Directors suspend amateurism rules related to NIL and adopt interim NIL policies.

Specifically, the Division I Council provided the following guidance to member institutions and student-athletes:

  • College athletes can engage in NIL activities that are consistent with the law of the state where the school is located. Colleges and universities are responsible for determining whether those activities are consistent with state law.
  • Student-athletes who attend a school in a state without an NIL law can engage in this type of activity without violating NCAA rules related to name, image and likeness.
  • College athletes can use a professional services provider for NIL activities.
  • Student-athletes should report NIL activities consistent with state law or school and conference requirements to their school.

Under this proposal, schools and conferences would be able to set their own NIL policies. However, for the same reason that the NCAA’s proposed NIL rules may raise antitrust concerns, there is worry that conferences passing their own NIL policies may also run into antitrust issues. Accordingly, institution-specific NIL policies are becoming the popular choice.

On June 30, mere hours before the various July 1 state NIL laws were to go into effect, the NCAA Board of Governorsvoted to adoptthe interim NIL policy allowing college athletes across the country to monetize their NIL. To monitor and direct athlete activity, schools have been tasked with creating their own NIL policies. The University of Florida was thefirst to createsuch a policy and publicly post it.

So, it’s July 1. What do we know now?

  • College athletes nationwide can receive compensation for NIL opportunities.
  • NCAA member institutions are responsible for creating their own NIL policy.
  • College athletes are to report NIL activities to their school under theNCAA uniform interim policy.
  • The monetization of college athletes’ NIL is subject to the institution’s policies and any applicable state law. Should Congress pass federal legislation, there is a question of whether state laws already in effect would be preempted.
  • College athletes still cannot receive pay-for-play.
  • Permissible NIL compensation does not include payment from NCAA member institutions to the student-athletes or improper recruiting inducements.

Jada Allender is a corporate attorney and a 2021 graduate of Arizona State University’s Sandra Day O’Connor College of Law with a joint JD and Masters in Sports Law and Business.

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