For years the NCAA has prohibited student-athletes from profiting from their name, image, and likeness (“NIL”). Examples of such prohibited activities include, but are not limited to, signing autographs, personal appearances, promoting a business, social media endorsements, and representations in video games. But, student-athletes may soon be able to profit from their NIL. The NCAA has announced support for rule changes in each of the three NCAA divisions, which would allow student-athletes to receive compensation for third-party endorsements. Such rule revisions will change the landscape of college athletics as we know it and modernize the NCAA’s longstanding collegiate model prohibiting student-athletes from profiting from their NIL. In October of 2019, the NCAA governing body directed the NCAA’s three divisions to make changes to the rules to allow student-athletes to profit from their NIL. Since that time, the three NCAA divisions have been working on drafting legislation that will allow student-athletes to profit from their NIL, but the legislation must be consistent with the collegiate athletic model. For example, student-athletes can be compensated for third-party endorsements related to athletics, as long as there is no school or conference endorsement, no use of institutional trademarks/logos, and at no point can a school pay student-athletes for NIL activities. In addition, the NCAA governing board has stated that a student-athlete can’t be compensated for NIL activities by schools or boosters for recruiting purposes. Thus, while student-athletes will be able to profit from NIL activities, the NCAA will still have parameters in place to ensure any NIL activities are consistent with the collegiate model.
By the end of October 2020, each NCAA division shall have its final legislation drafted to update the NIL rules. In January 2021, each division will vote on the new NIL rules at the annual NCAA convention. Such legislation is proposed to go into effect at the start of the 2021-2022 academic school year. This means that student-athletes may be able to start profiting from NIL activities by the fall of 2021. The restrictions that will be placed on student-athletes NIL efforts will not be announced until the final legislation is voted on and approved by all three NCAA divisions in January of 2021.
Student-athletes and businesses will need assistance in navigating the NCAA rule changes and many other legal matters such as reviewing contracts, establishing LLCs, reviewing any tax implications, and several other business matters. Because athletic departments can have no involvement in student-athletes NIL activities, it is important to seek advice from someone qualified to handle NCAA NIL matters and the business activities that go along with such endeavors. The future of collegiate athletics is evolving and modernizing with the times and Breazeale, Sachse, and Wilson is ready to assist any business or student-athlete with their NIL activities.