NIL NETWORK INSIGHT
Recap: Four states (Alabama, Florida, Mississippi, New Mexico) have NIL laws that are going into effect on July 1 that would permit the collegiate athletes within that state to monetize their Name, Image, and Likeness. The NCAA has yet to make an official statement on how they’re planning to handle athletes having different rights in different states. This article discusses four scenarios:
- The NCAA could sue the states to prevent, or at least delay, the laws from going into effect.
- NIL laws go into effect on July 1, causing other states to ignore NCAA rules and recognize NIL.
- A federal NIL law is passed prior to July 1.
- The NCAA sufficiently modifies their NIL rules.
Observations: It doesn’t seem likely that scenario 1 will happen anymore because there are too many states involved with more likely to pass their NIL bill in the next two months for a July 1 effective date.
Scenario 2 seems probable, although it’s more likely that states would rush to pass and/or push up their own NIL bills rather than just ignoring NCAA rules.
With the reintroduction of a bi-partisan federal NIL bill recently, it is likely that scenario 3 may occur close to July 1, but doubtful that it will be passed before.
Scenario 4 doesn’t seem probable at this time. The NCAA indefinitely postponed their vote on NIL reform in January and NCAA President Emmert seems to be content waiting on Congress.
Regardless of how these scenarios play out, it’s likely to be a chaotic summer.
The college sports industry faces a looming and complicated legal crisis, with at least four states’ name, image and likeness statutes will go into effect on July 1.
Barring judicial or legislative intervention, Florida, Alabama, New Mexico and Mississippi will be the first to have active NIL laws on the books. Several other states’ governors have signed NIL statutes that will take effect later this year or at the beginning of 2022, while still other state legislatures are advancing NIL bills.
This evolving dynamic raises a number of questions that implicate the law.
Will the NCAA seek court injunctions to stop NIL statutes from taking effect? Will the NCAA announce its own NIL rules to govern schools across the country? Will Congress pass, and President Joe Biden sign, a federal NIL statute? Will colleges in non-NIL states, worried about recruiting advantages ceded to colleges in NIL states, defy their NCAA membership obligations and allow NIL? Will the NCAA sanction or threaten to expel member schools that act in defiance of contractual responsibilities? Will the NCAA simply do nothing and let the market play out?
The states’ NIL statutes are similar. In Florida, for example, college athletes at Florida colleges will be able to hire agents, sign endorsement deals, sponsor businesses and be paid to influence on social media. The statute also expressly forbids Florida colleges from adopting or enforcing rules that would interfere with athletes’ NIL rights. As a consequence, a Florida school that enforces NCAA amateurism rules with respect to athletes’ NIL rights would be breaking Florida law and subject to litigation.
The Florida statute features important restrictions. An athlete can’t enter into a contract that conflicts with a contract signed by his or her team. Compensation must also be “commensurate with the market value” of an athlete’s NIL, a qualification designed to limit opportunities for boosters to cloak “play-for-pay” compensation as NIL payments. To that end, NIL compensation can’t be paid in exchange for athletic performance or attendance at a college. Such payment can only be made by a third party unaffiliated with the college. Other states’ NIL statutes feature additional boundaries. Alabama’s NIL statute, for example, forbids endorsement deals for tobacco products, casinos and adult entertainment.