Kentucky NIL Law for NCAA

On June 24th, 2021, Kentucky enacted a Name, Image, Likeness (NIL) law for their colleges and institutions. Kentucky is one of the first states to see the legislation go live, as it is effective July 1st, 2021. Governor Andy Beshear signed Executive Order 2021-418 allowing intercollegiate student athletes the ability to earn compensation for the use of their NIL.

UPDATE: On March 8, 2022, the Kentucky Senate unanimously approved Senate Bill 6 which aims to extend the Executive Order with more concrete guidelines on collegiate student-athletes profiting off their NIL. This bill allows intercollegiate student-athletes the ability to earn compensation for the use of their name, image, and likeness according to KY state legislation.

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Bill
Status

Signed into Law (Executive Order)

Effective
Date

07/01/2021

NCAA
Institutions

13

Estimated
NCAA Athletes

3,900

High School
NIL Legislation

No

Last Updated 08/22/22

Kentucky NIL Law

New Kentucky Law:

This bill was introduced to Kentucky’s Senate in early January 2022, and took approximately two months 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.

An institution or an association shall not prohibit a student-athlete from lawfully earning compensation through a name, image, and likeness agreement with a third party or from obtaining an athlete agent and shall not penalize an athlete for doing so.
An institution shall not revoke a student athlete’s scholarship or allow eligibility for a scholarship to be adversely impacted because of an athlete lawfully earning compensation through a NIL agreement or obtaining an athlete agent, unless the athlete has violated a reasonable restriction imposed by the institution under Section 3 of this Act. However, a student athlete’s need-based financial assistance or an academic scholarship based in part on financial need may be affected by the income generated by a NIL agreement.
An association shall not prohibit an institution from participating in intercollegiate athletics due to an institution’s student-athlete lawfully earning compensation through a NIL agreement with a third party or obtaining an athlete agent and shall not penalize an institution for its student-athlete doing so.

SECTION 2.

A student-athlete may receive compensation for the use of the athlete’s name, image, or likeness through a name, image, and likeness agreement with a third party. Such compensation shall be consistent with prevailing market rate of the authorized use of the athlete’s name, image, or likeness.
1. A person or entity shall not give or promise compensation for the use of the name, image, or likeness of a current or prospective student-athlete to recruit or induce the athlete to enroll at any Kentucky institution.
2. A person or entity, regardless of residence, shall not give or promise compensation for the use of the name, image, or likeness of a student-athlete enrolled at a Kentucky institution or of a prospective student-athlete who has entered into an enrollment contract with a Kentucky institution with the purpose of recruiting or inducing the student-athlete to enroll at another postsecondary educational institution, regardless of the institution’s location.
An institution, association, or affiliated organization shall not:
1. Give or promise compensation for the use of an athlete’s name, image, or likeness;
2. Direct compensation to be given for the use of the athlete’s name, image or likeness; or
3. Negotiate any part of a NIL agreement on behalf of a prospective student-athlete.
A student-athlete shall not enter into a NIL agreement to receive compensation from a third party relating to the endorsement or promotion of:
1. Sports betting;
2. A controlled substance;
3. A substance the student athlete’s intercollegiate athletic association forbids the athlete from using;
4. Adult entertainment; or
5. Products or services that would be illegal for the student-athlete to possess or receive.

SECTION 3.

SECTION 4.

Nothing in Sections 1 to 5 of this Act shall be interpreted as:

Waiving the immunity of any public postsecondary educational institution, its employees, agents, or authorized volunteers;
Granting name, image, or likeness rights or requiring compensation for the use of the name, image, or likeness of any student-athlete prior to the effective date of this Act;
Establishing student-athletes as employees or independent contractors of an institution or an association; or

SECTION 5.

For all student-athletes enrolled in institutions within the Commonwealth, all NIL agreements and agency contracts shall be governed by the laws of the Commonwealth.
The parent or guardian of a minor student-athlete may enter the minor into a NIL agreement or an agency contract on the minor’s behalf. However, the minor shall reaffirm the NIL agreement or agency contract within thirty (30) days of reaching the age of eighteen (18) or the contract or agreement shall be revoked.
A student-athlete shall reaffirm a NIL agreement or an agency contract, either of which was formed or reaffirmed while the student-athlete was participating in intercollegiate athletics at an institution, within thirty (30) days of the student-athlete no longer participating in intercollegiate athletics at that institution or the contract or agreement shall be revoked.

SECTION 6.

The General Assembly hereby declares all name, image, and likeness agreements entered into pursuant to Executive Order 2021-418 to be valid for the duration of one year from this Act becoming law. Upon that date, any contracts entered into pursuant to the order shall become invalid but may be renewed by the student-athlete pursuant to the provisions of this Act. Executive Order 2021-418 is hereby nullified and is of no further force or effect.

Original Kentucky NIL Law:

This executive order was implemented in late June 2021, shortly before many other states saw their own NIL legislation go live. The following components have been spelled out from the Bill:

This Order shall be effective July 1, 2021.

Tax Implications

FAQ’s

Kentucky NIL FAQ’s

What is the Kentucky NIL Law?

“The General Assembly recognizes that student-athletes possess property rights in their name and likeness and should be protected from commercial exploitation, and no state law or regulation prevents the postsecondary educational institutions located in the Commonwealth from allowing their student-athletes to earn compensation for the commercial use of their name, image and likeness.” -Governor Andy Beshear

When does Kentucky NIL Compliance Start?

Kentucky NIL started on July 1, 2021, per the NCAA Interim Policies and with the implementation of Executive Order 2021-418, Kentucky State NIL laws also took effect on July 1, 2021.

How does Kentucky NIL affect NCAA Student-Athletes?

Kentucky NCAA Student-Athletes will be able to earn compensation for the use of her or his name, image, or likeness (NIL) through a multitude of different opportunities. Student-Athletes can now make money for things such as endorsements, sponsorships, appearances, autographs, memorabilia, podcasts, camps, clinics, private lessons, crowdfunding, and many more!

What are Kentucky Name, Image, and Likeness Best Practices?

Both athletes and administrators in the State of Kentucky should start by making sure they have a proper understanding of the rules and regulations set-forth by Executive Order 2021-418. A working-knowledge of the ‘Dos and Don’ts’ for Kentucky NIL will allow all parties to safely and successfully navigate the new landscape. The next most important aspect would be the compliance component of NIL. Not only do students need to make sure they are entering agreements that are compliant with the passed state regulations, but they need to make sure they are transparent with their school to avoid any institutional conflicts.

Colleges / Institutions

NCAA Kentucky Schools

What schools are affected by Kentucky NIL?

All institutions with NCAA athletic programs are affected by NIL. In the state of Kentucky, the following schools will be affected:

D1

Bellarmine University
Eastern Kentucky University
University of Kentucky
University of Louisville
Morehead State University
Murray State University
Northern Kentucky University
Western Kentucky University

D2

Kentucky State University
Kentucky Wesleyan College

D3

Asbury University
Berea College
Centre College
Spalding University
Transylvania University

NAIA

Alice Lloyd College
Brescia University
Campbellsville University
University of the Cumberlands
Georgetown College
Kentucky Christian University
Lindsey Wilson College
Midway University
University of Pikeville
Thomas More University
Union College

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