NIL Compliance Navigation

Since changing their rules to allow college athletes to be compensated for the use of their ‘name, image, and likeness’ (NIL) in 2019, the NCAA, (as well as Congress and Institutions) have been endeavoring to determine the bounds of this new ability. While allowing college athletes to profit off of their NIL, the NCAA is advocating for rules that ensure these students maintain their amateur status and do not become traditional employees. Many state and federal legislators, on the other hand, are advocating for rules that grant students and universities broad authority in seeking and forming these deals. Because the NCAA has not provided specific guidelines and is currently awaiting the Alston Supreme Court decision, determining whether the NCAA’s cap on education-related compensation for student athletes violates antitrust laws, many state legislators are presently drafting and enacting laws to protect college athletes in their states.

California first enacted legislation allowing college student-athletes to earn compensation for their NIL in 2019, but the law does not go into effect until January 1, 2023. Though following behind California, Florida’s similar legislation goes into effect in July of this year. Florida’s bill allows collegiate athletes to earn compensation for their NIL and prohibits schools from adopting any rules that prevent or unduly restrict an athlete from earning such compensation. The bill also guarantees athletes’ rights to securing an authorized agent and requires compensation to come from third parties, unaffiliated with the athlete’s school. Now, more than 20 similar state bills are pending.

Two main issues arise from this state-regulation approach. First, inconsistencies between states, and therefore institutions, will raise administrative costs for Athletic Departments. Athletic Directors, Compliance Officers, and other parties might be tasked with ensuring student-athletes adhere to regulations, so they can keep their eligibility. Second, some fear that students will be incentivized to attend particular schools based on their ability to retain an agent and earn compensation for their NIL. This may lead to some schools gaining an, arguably, unfair advantage based on the NIL legislation of their state. Therefore, the NCAA, and others, are advocating for federal NIL legislation to be passed. Multiple senators have introduced federal legislation.

Most recently, Senator Murphy (D-Conn.) introduced the “College Athletic Freedom Act.” This follows Senator Booker’s (D-NJ) bill which is said to be the most athlete-friendly NIL legislation. Some republican senators have also introduced NIL legislation, which is viewed as more NCAA-friendly. Proposed federal legislation must be followed closely, as it will greatly impact all member institutions throughout the U.S.

Under the Supremacy Clause of the U.S. Constitution, when conflict arises between state and federal laws, federal law preempts state law.

In some cases, Congress will preempt all state regulation in the area; in others, Congress allows state regulations that impose more stringent standards than those imposed by federal regulators. Therefore, the ways in which a state’s law conflicts with federal law must be determined. The NCAA is advocating for federal legislation that explicitly preempts all state legislation and establishes one set of rules to govern all college athletics. University Athletic Directors, Compliance Officers, and other parties involved will need to be aware of federal law, state laws, and NCAA rules. Deciding Alston and enacting federal legislation will inform the NCAA on how to draft its rules, and may limit any further state legislation, clarifying requirements for all interested parties.

In summary, although it is decided that student athletes can earn compensation for their NIL, the bounds of this ability are largely unknown. Different state legislation is being enacted, federal legislation is in the drafting stage, and NCAA rules will not be formed until after the Alston decision. Therefore, the rules and regulations surrounding students’ abilities to profit off their NIL are unclear, and in many respects, undecided. At this point, keeping track of all legislation being drafted and enacted, is integral to stay up-to-date and prepare to track students’ deals.

morgan povinelli

About the Author

Morgan Povinelli

J.D. CANDIDATE AT GEORGE WASHINGTON LAW SCHOOL