By Joshua Frieser, Frieser LegalAt slightly more than one year old, the name, image, and likeness (NIL) industry is booming. And it’s not just for high school and collegiate athletes. The billion-dollar industry has created countless jobs and business opportunities. In addition to the corporate sponsors that have looked to capitalize on ultra-high-engagement athlete marketing, hundreds of businesses have either formed or expanded their service offerings to tap in to the NIL industry. As of this writing, NIL Network’s industry directory includes 425 athlete service providers, 62 businesses that provide NIL services for institutions, and 280 collectives and university-specific platforms. Furthermore, the NIL industry contains several sub-industries, which can be classified to include marketing agencies, attorneys, financial service providers, branding and public relations companies, athlete education providers, marketplaces, collectives, NFT companies, and others that operate within the NIL industry.Although some companies are established businesses that have expanded their service offerings to include the NIL industry, most are start-ups. And while there is certainly some disparity in resources available to various NIL industry start-ups (some are sole member LLCs with a part-time founder and others are backed by venture capital dollars and have full-time employees), all businesses operating within the NIL industry need to be aware of the legal challenges and constraints that may affect them. This guide will outline some of the primary legal considerations that NIL industry businesses should consider, including the regulatory landscape of NIL, intellectual property, business organization and registration, liability planning, and contracts with athletes, brands, or institutions. Here is a guide to help sponsors looking to utilize NIL to partner with college athletes. Regulatory Landscape of NIL Since the outset, the NIL industry has had a dynamic regulatory landscape. The myriad of state laws and differing institutional policies can contain nuanced differences that require careful navigation. Furthermore, any organizations looking to work with athletes must be aware of any other relevant laws, including athlete-agent laws and Federal Trade Commission regulations.Current Legislation Currently, NIL is primarily regulated by state law. A majority of states have NIL laws that govern in their particular jurisdictions. A minority of states have no NIL law at all, which leaves NIL policy to each institution in those states. Recently, there has been federal legislation introduced that would create a uniform, national framework for NIL, although nothing has gained substantial traction yet. This post contains a more detailed legislative update. As this point, navigating the legislative framework of NIL requires looking to individual state laws to determine the confines you will have to work within. NIL industry businesses should consider state laws in all states where they are (or may be) working with high school and college athletes, not just the ones where they primarily operate. Other Relevant Laws In addition to NIL specific laws, NIL industry businesses should consider how other relevant laws may affect them. For example, marketing agencies working with college athletes should thoroughly examine state and federal athlete-agent laws to determine what disclosures and notices they will be required to provide to college athletes and their universities upon signing …
