From pouring drinks at a local campus bar to giving tours to incoming freshmen, part-time jobs have become the norm for many college students to cover their daily expenses. Unfortunately, college athletes, who train for countless hours almost every day of the week, have little to no time for this. While universities and the NCAA make millions of dollars on college athletics each year, the athletes themselves were historically left in the dust having to cover most of their expenses without any source of income.
This took a turn in July 2021 in the groundbreaking case of NCAA v Alston, where the Supreme Court upheld a District Court ruling that the NCAA, barring education-related compensation, violated Section I of the Sherman Act. Shortly after this decision, the NCAA voted to adopt interim measures allowing student-athletes to be compensated for their NIL.
What does NIL mean for college athletes?
NIL stands for “name, image, and likeness”—the three elements that make up the legal right of publicity, an intellectual property right that allows a person to license the use of his or her identity for commercial purposes. The interim measures that changed the NCAA’s archaic rules now allow athletes to be paid for many things they were denied in the past, such as signing autographs, representing brands, selling their jerseys, appearing in video games, etc. The possibilities are endless, and now athletes do not have to choose between playing sports or having a lucrative means to make money.
How can athletes profit from their NIL?
There are many ways to profit from NIL. It is important for athletes to be able to identify potential NIL opportunities to monetize on them. Some key opportunities are:
- Royalties for when their NIL is used in trading cards, video games, jerseys, etc.
- Public appearances, such as events or paid autograph sessions.
- Attaching their name to promote their own sports camps or companies.
- Endorsements/sponsorships from companies, including restaurants, to promote products or services.
Aside from seeking out opportunities, it will be important for athletes to protect their name, nickname, slogan, or logo by applying for trademark registration. Many athletes have already successfully done this. For example, Graham Mertz, the QB at Wisconsin, trademarked his initials as a logo; Paige Bueckers, a UConn basketball player, trademarked her nickname, “Paige Buckets”; and Dontaie Allen, a Kentucky athlete, trademarked his actual name. These are just a few of the many who are taking advantage of their identity to market themselves and create a stream of income.
What issues do athletes need to be aware of?
Currently, there is no federal regulation that provides overarching rules to athletes when entering in NIL deals. This means it is very important for athletes to know and follow the college and local state laws where their college is located.
Many colleges have set restrictions for athletes, such as banning endorsements with companies that promote gambling, alcohol, and tobacco. Others have banned athletes from entering into deals that conflict with the school’s sponsorship agreement, i.e., if a school has an apparel agreement with Nike, the athlete may not be able to enter into a deal with Adidas. Additionally, athletes need to report NIL activities within a certain time frame to their school or state for approval.
Athletes should also be wary of contract issues with companies that may arise when entering into NIL deals. Companies will often not have an athlete’s best interest in mind and may attempt to slip in fine print that can negatively affect the athlete’s position. For instance, the gaming company YOKE offered to pay several members of the Iowa football team $20 for an endorsement on social media. When signing the contract, these players did not realize they were making a deal that would grant YOKE perpetual, royalty-free, and irrevocable rights to use the content. As a result, instead of being paid every time YOKE used their NIL, the athletes were paid once. If athletes do not carefully read and vet these complex contracts, it is likely that many will fall prey to similar situations.
What’s next?
NIL deals with college athletes are likely to see a boom this upcoming year. Out of 300 brands surveyed in 2021, over half said they are planning on spending between $50K-$500K on student-athletes in 2022. Additionally, companies like Opendorse (an athlete marketing clearinghouse that serves as a one-stop shop for athletes and people who would like to pay them), have made it even easier for players to find deals.
Student-athletes will have major opportunities ahead of them and it is imperative they hire a legal professional to help with the process. Attorneys can help athletes by doing the following:
- Protect the athletes’ NIL and intellectual property in the form of trademarks and copyrights.
- Review complex agreements with brands to ensure that athletes are getting the best deal possible.
- Ensure that the sponsorships/partnerships they enter into follow the laws of their local state and school.
If done correctly, NIL deals can be a huge win for athletes. By hiring an attorney to help, athletes can be confident in knowing they are being represented by an experienced legal professional and simply enjoy the ride.