This past week has been a whirlwind of movement in the NCAA Name, Image, and Likeness space. Of the dozens upon dozens of articles I’ve read, these are the ones that I think you should invest some time and energy into. Happy reading!
Legislation
State NIL Laws with July 1 Date Continue to Grow
Article Date: 5/7
Source: College and Pro Sports Law
Author: Gregg E. Clifton and John G. Long
Recap:
- Georgia has now joined Florida, Alabama, New Mexico and Mississippi by enacting a name, image and likeness law with a July 1, 2021 effective date.
- Unique State NIL Bill Attributes:
- Georgia: Universities in the state can elect a requirement that all student-athletes share up to 75% of the name, image and likeness compensation generated and received by each athlete.
- New Mexico: Universities may not prohibit or discourage an athlete from wearing footwear of the athlete’s choice during official, mandatory team activities so long as the footwear does not have reflective fabric or lights or pose a health risk to a student-athlete.
- Alabama: Collegiate athletes are prohibited from wearing any item of clothing, shoes, or other gear with the insignia of any entity while wearing athletic gear or uniforms licensed by a postsecondary educational institution or otherwise competing in any athletic competition or institutionally sponsored event.
- Mississippi: Universities may impose reasonable limitations on the dates and time that a student-athlete may participate in endorsement, promotional, social media or other activities related to the license or use of the student-athletes name, image and likeness.
Observations: The NCAA and its member institutions are in dire need of a sweeping federal bill that would preempt the state bills. Even from this quick glance at their differences, it’s clear that there will be recruiting advantages, compliance issues, and an overall headache for all stakeholders. It is likely that these state NIL bills will be effective for at least a few months prior to a Senate NIL bill getting passed.
Senator Jerry Moran Says Federal NIL Law by July 1 Unlikely
Article Date: 5/12
Source: USA Today
Author: Steve Berkowitz
Recap:
- Sen. Jerry Moran (R-Kan.) said that “it will be difficult … if not impossible” for a federal law pertaining to college athletes’ ability to make money from their names, images and likeness to be enacted before July 1.
- Moran is the author of one of three bills that have been introduced in this Congressional session, and he said he believes his measure offers the best vehicle for Republicans and Democrats to reach a compromise.
- “It’s become a much more important issue” than it had been a month or two ago, before Georgia, Mississippi, Alabama and New Mexico joined Florida and Nebraska in passing laws that could take effect July 1.
- “The timeliness of what’s happening across the country has now begun to dawn onto my colleagues,” Moran said. “And it’s one of the things about Congress: It takes usually some outside force, some event, to get faster action.”
- Today (5/12), the Louisiana state Senate’s Finance Committee unanimously sent to the chamber floor a measure that would take effect upon the governor’s signature. It still needs House approval, but given Louisiana’s legislative deadlines, it could become the first law to take effect before July 1.
Observations: The various states’ strategy of putting pressure on the NCAA and Congress to take action seems to be working. But have they waited too long? How many more states will pass NIL legislation from now and until July 1 with an effective date of July 1? My guess is at least five if the NCAA or Congress don’t take action. What will the consequences be of State NIL Bills going into effect on July 1? I don’t think too much as long as the legislation that preempts state laws comes within a few months.
NCAA
NCAA President Pushes to Let Athletes Cash in
Article Date: 5/12
Source: New York Times
Author: Alan Blinder
Recap:
- In an interview with The New York Times on Friday, the N.C.A.A.’s president, Mark Emmert, said he would recommend that college sports’ governing bodies approve new rules “before, or as close to, July 1.”
- The plan, which could take effect on Aug. 1, would also let players earn money through advertisements on their social media accounts.
- Emmert would not discuss whether the association might challenge any of the state laws in court. He said, though, that he did not expect any decisions about new industry rules to hinge on the outcome of the Alston case.
Observations: Emmert finally broke his silence and made a statement about the future of NCAA rules around how athletes can monetize their NIL. Although it’s still unclear what exactly the reform will look like, it’s a positive that Emmert stated that outcome of the Alston case would not have an effect – AKA the NCAA isn’t waiting until the Supreme Court announces their decision in late May or June. It appears that the NCAA may set their NIL rules and work with the state NIL laws until Congress passes a sweeping NIL bill.
Athlete Stories
Which Clemson Athletes Could Benefit from NIL?
Article Date: 5/7
Source: WYFF News 4
Author: Matt Moore
Recap:
- Brooklyn Hollon, a senior Clemson cheerleader is not restricted by the NCAA and is able to monetize her NIL already.
- She reported that she gets paid to post Instagram stories for a teeth whitening company and that it’s enough money to get her nails done or to go to eat.
- There are 42 athletes at Clemson who boast a larger social media following than Hollon, including 34 football players, 4 men’s basketball players, 2 softball players, a high jumper, and a freshman women’s soccer player.
Observations: There’s a lot of speculation around how many collegiate athletes will actually be able to monetize their NIL, once permitted. While Clemson is part of the Power 5 conferences (ACC) so their numbers may be skewed, it appears that at least 10% of their athletes may be able to make some money. Even if we cut that percentage in half, there would still be around 10,000 athletes that could take advantage of their NIL. I’m interested to see how much more effort junior athletes put into building their personal brand, knowing that they can make money off it once they get to college.
College Athletes Learn to Embrace Public Status
Article Date: 5/9
Source: Pepperdine University Graphic
Author: Paxton Ritchey
Recap:
- Pepperdine Men’s Basketball senior guard Colbey Ross tweeted his intentions to enter the 2021 NBA draft and has been retweeted over 230 times and liked over 1,270 times, as of April 30. By comparison, on the same day, Pepperdine’s official Twitter account tweeted about the first COVID-10 vaccine clinic on campus, receiving 24 “likes” and retweeted twice.
- College athletes serve as figures and role models in a variety of ways: Die-hard fans start dissecting film of recruits in high school, trying to be the first to predict their sport’s next superstar. Younger players see DI athletes as heroes and the personification of their own dreams and goals. And for students and alumni, the athletes are the catalyst for the pride that comes with their school’s success.
- There’s also evidence that athletic success can lead to academic prestige. Since 1998, when Gonzaga Men’s Basketball began an unprecedented run that catapulted them onto the national stage, undergraduate applications are up 356% and the endowment has increased by 378%.
Observations: Pepperdine, although a D1 university with 17 teams, is a relatively small private institution with just 3500 undergraduates. However, Pepperdine boasts a successful athletic program that frequently sends teams to the NCAA championship tournament and are located in a wealthy area in Los Angeles county. It will be interesting to see how many of their athletes are able to secure good partnerships with local businesses when NIL reform goes into effect.
Strategy
NIL Doesn’t Open the Door for Agents Offering Marketing Advances
Article Date: 5/11
Source: Above the Law
Author: Darren Heitner
Recap:
- A marketing advance is a sum of money that is offered and provided by a sports agent to an athlete with the stated intention that it be paid back by the player to the agent as the player earns endorsement and marketing income.
- Many sports agents, in particular those who represent NFL players, have asked Heitner whether they should feel comfortable providing college athletes with marketing advances to be recouped against future NIL activity. Heitner responds that the answer is that they would be wise to stay away from such activity.
- At a minimum, such a payment would likely be deemed an inducement payment for the player to enter into a standard representation agreement at a later date, which is prohibited under the regulations.
- If an agent were to provide a marketing advance to a college athlete, it would be well before executing a standard representation agreement and thus putting the agent at risk of exposure.
Opinion
College Athletes and NFTs: An Idea
Article Date: 5/5
Source: Benzinga
Author: Jon Hershman
Recap:
- Former Clemson QB, Trevor Lawrence, sold his NFT collection for $225k.
- When NCAA NIL reform goes into effect, college athletes may also look to sell NFTs. NFTs could provide a unique way for all stakeholders (athletes, university, fans, NCAA) to be satisfied:
- Athletes: Profit from NIL
- University: Profit from sale of tokens, increase fan engagement, top recruits attend university instead of opting out of college for minor leagues
- Fans: Increased engagement with team and favorite program
- NCAA: emphasizes “student first” mentality for athletes, rewards athletes who stay in school longer
Observations: While this article is something I could never see the NCAA implementing, I found Hershman’s perspective so interesting. It’s hard to know what we don’t know about NIL or NFTs, but this approach would revolutionize collegiate sports. With NFTs gaining so much mainstream attention over the past two months, it really seems like an opportunity for collegiate athletes to make some money and “superfans” to get closer to their teams. The challenge is that the NCAA wants to separate the athlete from the institution as much as possible as not to create a “pay for play” type scenario. My money is on this never becoming a reality, but I do appreciate the creativeness!
University Deals
Power 5 Schools Twice as Likely as Those in Group of Five to Already Have a Contract with Third-Party NIL Companies
Article Date: 5/7
Source: Out of Bounds Newsletter
Author: Andy Wittry
Recap:
- Collectively, the 30 Division I schools that provided Out of Bounds with copies of their contracts with third-party NIL agencies have committed more than $2.4 million to these companies, including nine schools whose respective agreements are worth at least $100,000 – typically over multiple years.
- However, this isn’t always a case where the largest athletic departments have spent the most money on third-party services.
- Multiple schools whose football programs finished in the top 10 of the final College Football Playoff rankings last season haven’t signed any NIL contracts.
- Athletes who attend a Power 5 institution are roughly twice as likely to have access to professional, third-party branding, social media and technology services pertaining to NIL compared to athletes who attend a university that’s a member of a Group of Five conference. Athletes who compete at the Group of Five level are almost four times as likely to have access to such services than those who compete at the FCS level, based on the contracts obtained.
- Among the nearly 70 DI universities and athletic departments examined, here are the 10 that have committed to the greatest lifetime spending to companies that offer third-party NIL services:
- Nebraska: $263,499.00
- Oregon State: $216,000.00
- North Carolina: $193,303.49
- Oregon: $174,888.49
- North Carolina State: $155,803.49
- Kansas: $140,419.00
- South Carolina: $115,000.00
- California: $114,255.89
- North Carolina A&T: $112,339.22
- Missouri: $99,990.00
Observations: The collegiate NIL industry is here and athletic departments are investing to help their athletes successfully navigate this new space. There is a definite feeling of a new “arms race” where the universities attempt to entice prospects with new shiny locker rooms, massive stadiums, or in 2021, experts and services that will help them monetize their NIL. If there isn’t a sweeping bill in place by July 1, it will be difficult to understand what a university is permitted to provide, as bills differ state to state and the language in them can be read multiple ways.