New Alabama NIL Law:
This bill was introduced to Alabama’s House of Representatives in early January 2022, and took less than one month to pass through the Senate and the House, and ultimately, be signed into law. The following components have been spelled out from the Bill:
This bill would repeal Act 2021-227 of the 2021 Regular Session, relating to student athletes and compensation for use of a student athlete’s name, image, or likeness.
Relating to student athletes; to repeal Act 2021-227 of the 2021 Regular Session, now appearing as Article 3 of Chapter 26B of Title 8, commencing with Section 8-26B-50, and Section 8-26B-32, Code of Alabama 1975, relating to student athletes and compensation for use of a student athlete’s name, image, or likeness.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Act 2021-227 of the 2021 Regular Session, now appearing as Article 3 of Chapter 26B of Title 8, commencing with Section 8-26B-50, and Section 8-26B-32, Code of Alabama 1975, relating to student athletes and compensation of a student athlete for use of his or her name, image, or likeness, is repealed.
Section 2. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.
Initial Alabama NIL Law:
This bill was introduced to Alabama’s House of Representatives in early March 2021, and took a little over a month and a half to pass through the Senate and the House, and ultimately, be signed into law. The following components have been spelled out from the Bill:
Section 1.
- (a) A student athlete participating in intercollegiate sports at a postsecondary educational institution may earn compensation for the use of the student athlete’s name, image, or likeness pursuant to this act. The compensation shall be commensurate with the market value of the student athlete’s name, image, or likeness.
- (b) Subject to this act and any rule adopted by the Alabama Collegiate Athletics Commission, a postsecondary educational institution may not adopt or maintain a contract, rule, regulation, standard, or other requirement that unreasonably restricts a student athlete from receiving compensation for the student athlete’s name, image, or likeness.
- (c) A postsecondary educational institution may prohibit a student athlete from entering into an endorsement contract with, or otherwise receiving compensation from, any of the following categories of brands or companies:
A tobacco company or brand, including any tobacco product, alternative nicotine product, electronic nicotine delivery system, or any electronic nicotine delivery system retailer, or any specialty retailer of electronic nicotine delivery systems or tobacco specialty store.
- Any alcoholic beverage company or brand.
- Any seller or dispensary of a controlled substance, including, but not limited to, marijuana.
- Any adult entertainment business.
- Any casino or entities that sponsor or promote gambling activities.
- Any entity or individual that, in the reasonable and good faith judgment of the postsecondary educational institution, negatively impacts or reflects adversely on the postsecondary educational institution or its athletic programs, including, but not limited to, bringing about public disrepute, contempt, embarrassment, scandal, ridicule, or otherwise negatively impacting the reputation or the moral or ethical standards of the postsecondary educational institution.
- (d) A postsecondary educational institution may also prohibit a student athlete 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.
- (e) Compensation for a student athlete’s name, image, or likeness may not be conditioned on athletic performance or attendance at a particular postsecondary educational institution.
- (f) Compensation for the use of a student athlete’s name, image, or likeness may be provided only by a third party not owned or operating under the authority of the student athlete’s postsecondary educational institution.
- (g) A postsecondary educational institution, an entity with the purpose of supporting or benefitting the institution or its intercollegiate sports, or any officer, director, or employee of the institution or entity may not compensate or cause compensation to be directed to a student athlete or the family of a student athlete for use of their name, image, or likeness.
- (h) Except with the prior written consent of the postsecondary education institution, a student athlete may not enter into a contract for compensation for the use of the student athlete’s name, image, or likeness if the institution determines that a term of the contract conflicts with a term of a contract held by the student athlete’s postsecondary education institution.
- (i) Before any contract for compensation for the use of a student athlete’s name, image, or likeness is executed, and before any compensation is provided to the student athlete in advance of a contract, the student athlete shall disclose that contract to his or her postsecondary educational institution in a manner prescribed by the institution.
- (j) A contract for the use of a student athlete’s name, image, or likeness which is formed while the student athlete is participating in an intercollegiate sport at a postsecondary educational institution may not extend beyond the student athlete’s participation in the sport at the institution.
Section 2.
- (a) A postsecondary educational institution may not prevent or unreasonably restrict a student athlete from obtaining professional representation for the purpose of securing compensation for the use of the student athlete’s name, image, or likeness.
- (b) An individual representing a student athlete for purposes of exploring or securing compensation for the student athlete’s name, image, or likeness shall be registered as an athlete agent with the state pursuant to Section 8-26B-4, Code 2 of Alabama 1975, or shall be a licensed attorney and a member 3 in good standing of the Alabama State Bar.
- (c) A student athlete participating in intercollegiate sports at a postsecondary educational institution shall provide the institution with written notice at least seven days prior to entering into a representation agreement with any individual for purposes of exploring or securing compensation for use of the student athlete’s name, image, or likeness.
Section 3.
- A scholarship awarded to a student athlete by a postsecondary educational institution may not be revoked or reduced as a result of the receipt of compensation by a student athlete for use of their name, image, or likeness, or as a result of the student athlete obtaining professional representation pursuant to this act and any rule adopted by the Alabama Collegiate Athletics Commission.
Section 4.
- (a) Each postsecondary educational institution shall conduct financial literacy and life skills programming for student athletes. At a minimum, the programming must include information concerning financial aid and debt management, as well as recommended model budgets for student athletes based on that academic year’s estimated cost of attendance and the various scholarship statuses of student athletes at the institution. The programming shall also include information on time management skills necessary for success as a student athlete and available academic resources.
- (b) The programming may not include any marketing, advertising, referral, or solicitation by providers of financial products or services.
- (c) This section does not place any obligation on a postsecondary educational institution to provide tax guidance or financial safeguards to student athletes outside of the programming required under this section.
Section 5.
- A student athlete may not receive or enter into a contract for compensation for use of his or her name, image, or likeness in a way that also uses any registered or licensed marks, logos, verbiage, or designs of a postsecondary education institution, unless the institution has provided the student athlete with written permission to do so prior to the execution of the contract. If permission is granted, the postsecondary education institution, by agreement of all parties, may be compensated for the use in a manner consistent with market rates or prior practice.
Section 6.
- A student athlete may not receive compensation for use of their name, image, or likeness as an inducement to attend or enroll in or continue attending a specific postsecondary educational institution.
Section 7.
- This act does not create a cause of action for any actions taken by a postsecondary education institution prior to the effective date of this act, including, but not limited to, any action under a claim or theory relating to restriction on trade or tortious interference of fair competition.
Section 8.
- Nothing in this act or rule of the commission shall affect the employment status of a student athlete with a postsecondary education institution. A student athlete shall not be considered an employee of a postsecondary education institution based on participation in an intercollegiate sport.
Section 9.
- It is the intent of the Legislature that constitutionally created boards of trustees of postsecondary educational institutions comply with the requirement of this act.
