On June 30, 2021, the Division 1 Board of Directors approved an interim name, image, and likeness (NIL) policy. This new policy allows all National Collegiate Athletic Association’s (NCAA) D1, D2, and D3 student-athletes to be compensated for their NIL as of July 1, 2021, regardless of whether their state has a NIL law in place or not.
Several public figures in the world of sports have supported the new policy, including Alabama’s Nick Saban saying, “The concept of name, image, and likeness was for players to be able to use their name, image, and likeness to create opportunities for themselves.”
Saban also recognized the potential downfalls of NIL, “But that (NIL) creates a situation where you can buy players.”
The policy was introduced just one day before 12 states were set to override the NCAA with their legislation. As of April 2022, the policy is a placeholder covering athletes nationwide until either federal legislation is passed or the NCAA creates more permanent NIL rules.
The story of the tug of war between states and the NCAA regarding NIL is a fascinating one. And while we can expect the narrative, as well as the rules, around NIL to evolve, NIL deals are here to stay.
States circumventing NCAA bans regarding NIL
Although the NCAA is an organization with national reach, their authority does have its limits. Specifically, individual states have the ability to override NCAA rules through their own legislation. Meaning if a state creates a law, student-athletes in those states have to follow that law, even if the NCAA says otherwise.
This limitation is precisely what forced the hand of the NCAA to make changes to the policies they had regarding the NIL.
On August 31, 2021, California Governor Gavin Newsom announced he had signed legislation to accelerate the implementation of Senate Bill 26, known as the Fair Pay to Play Act by two years, so it would take effect in 2021. This legislation was designed to circumvent the NCAA bans, permitting college athletes in the state of California to hire agents and be paid for endorsements.
At the time, Newsom noted:
“California led the charge against the unjust power imbalance in college sports, launching a national movement and spurring long-overdue changes in this multibillion-dollar enterprise. I’m proud to build on our leadership with today’s legislation to expand and protect our college athletes’ rights to reap the rewards from their sacrifices and success.”
Not to be outdone by California, several other states followed suit in creating their own NIL bills, including Alabama, Connecticut, Florida, Georgia, Illinois, Kentucky, Mississippi, New Mexico, Ohio, Oregon, Pennsylvania, and Texas.
With states setting their own rules around NIL, the NCAA found themselves in a challenging position where it was more difficult for them to set the tone of NIL regulation in college athletics.
For example, the NCAA feared the pay-for-play act would allow college athletes to get paid beyond their name, image, and likeness; this ultimately forced the NCAA to pass the bill allowing student-athletes to receive financial compensation for their name, image, and likeness.
What is the NCAA’s interim policy for NIL?
The NCAA interim policy around name, image, and likeness for college athletes is a bit of a compromise since it can’t override state legislation regarding NIL.
Instead, the interim rules from the NCAA instruct student-athletes to abide by their in-state rules. More specifically, they’ve offered guidelines that schools, conferences, and athletes must follow unless otherwise stated by their in-state legislators.
Those guidelines include:
- Schools, Conferences, and Associations cannot limit a student-athlete’s ability to be compensated for their NIL
- Student-athletes can receive professional representation if they are a registered agent in the state
- Participation in NIL-related activities shall not impact a student-athlete’s athletic or scholarship eligibility
- NIL agreements cannot conflict with existing team contracts
- Schools, Conferences, and Associations cannot compensate a student-athlete for their NIL
- Schools may restrict student-athletes from participating in vice industries
Meanwhile, states are continuing to create their own laws around NIL
Several states are continuing to move forward with a bill of their own, in particular, the Southeastern Conference (SEC). For instance, in May 2021, Tennessee became the 15th state to pass legislation pertaining to NIL. Gov. Bill Lee signed House Bill 1351, which went into effect on January 1, 2022.
Most states have very similar guidelines. Although, some states have created their own variations. For example, Tennessee gives the institution the ability to prohibit athletes from promoting gambling, tobacco, alcohol, and adult entertainment. But states like California allow student-athletes to promote any brand.
Since states are in full control of NIL, this means laws can change relatively quickly, and can sometimes be hard to keep track of. Soon after the first Tennessee bill was passed, another followed on April 20, 2022. The new legislation would allow college coaches to attend NIL events, universities to fundraise for NIL collectives and NIL representatives to make presentations on campus to recruits and players.
When will the NIL rules be permanent?
The NCAA has said the temporary policy will remain in place until federal legislation or new NCAA rules are adopted.
At the time of that statement, NCAA President Mark Emmert shared:
“This is an important day for college athletes since they all are now able to take advantage of name, image, and likeness opportunities. With the variety of state laws adopted across the country, we will continue to work with Congress to develop a solution that will provide clarity on a national level. The current environment — both legal and legislative — prevents us from providing a more permanent solution and the level of detail student-athletes deserve.”
So, as it stands, this interim policy will remain in place, and states are showing no sign of slowing down their own NIL-related legislative agendas.