On December 31st, 2021, Michigan passed a Name, Image, Likeness (NIL) law for their colleges and institutions. Michigan will see the legislation go live, effective December 31, 2022. Governor Gretchen Whitmer signed House Bill 5217 allowing intercollegiate student athletes the ability to earn compensation for the use of their NIL.
Bill
Status
Signed Into Law
Effective
Date
12/31/2022
NCAA
Institutions
25
Estimated
NCAA Athletes
7,500
High School
NIL Legislation
No
Last Updated 08/22/22
House Bill 5217
AN ACT to prohibit postsecondary educational institutions in this state and certain athletic organizations from preventing a college athlete from receiving compensation for the use of his or her name, image, or likeness rights.
The People of the State of Michigan enact:
Sec. 1. (1) As used in this act, “postsecondary educational institution” means a public or private institution in this state that offers a degree or course of study beyond the twelfth grade and receives state or federal funding of any kind.
(2) A postsecondary educational institution shall not uphold any rule, requirement, standard, or other limitation that prevents a student of that institution from fully participating in intercollegiate athletics based upon the student earning compensation as a result of the student’s use of his or her name, image, or likeness rights. Earning compensation from the use of a student’s name, image, or likeness rights shall not affect a student’s scholarship eligibility or renewal.
Sec. 2. An athletic association, conference, or other group or organization with authority over intercollegiate athletics, including, but not limited to, the National Collegiate Athletic Association, shall not do either of the following:
(a) Prevent a student of a postsecondary educational institution from fully participating in intercollegiate athletics based upon the student earning compensation as a result of the student’s use of his or her name, image, or likeness rights.
(b) Prevent a postsecondary educational institution from fully participating in intercollegiate athletics without penalty based upon a student’s use of his or her name, image, or likeness rights.
Sec. 3. A postsecondary educational institution, athletic association, conference, or other group or organization with authority over intercollegiate athletics shall not do either of the following:
(a) Provide a prospective college athlete who will attend a postsecondary educational institution with compensation in relation to the athlete’s name, image, or likeness rights.
(b) Prevent a student who resides in this state and participates in intercollegiate athletics from obtaining professional representation in relation to contracts or legal matters regarding opportunities to be compensated for use of the student’s name, image, or likeness rights, including, but not limited to, representation provided by an athlete agent or legal representation provided by an attorney.
Sec. 4. For purposes of this act, an athletics grant-in aid or stipend scholarship from a postsecondary educational institution in which a student is enrolled is not compensation for use of a student’s name, image, or likeness rights, and the institution shall not revoke or reduce an athletics grant-in aid or stipend scholarship based upon a student earning compensation in accordance with this act.
Sec. 5. (1) A postsecondary educational institution, athletic association, conference, or other group or organization with authority over intercollegiate athletics shall not interfere with or prevent a student from fully participating in intercollegiate athletics based upon the student obtaining professional representation in relation to contracts or legal matters regarding the student’s opportunities to earn compensation for the student’s use of his or her name, image, or likeness rights, including, but not limited to, representation provided by an athlete agent or financial advisor, or legal representation provided by an attorney.
(2) An athletic association, conference, or other group or organization with authority over intercollegiate athletics, including, but not limited to, the National Collegiate Athletic Association, shall not prevent a postsecondary educational institution from fully participating in intercollegiate athletics without penalty as a result of a student obtaining professional representation in relation to contracts or legal matters regarding the student’s opportunities to earn compensation for the student’s use of his or her name, image, or likeness rights, including, but not limited to, representation provided by an athlete agent or financial advisor, or legal representation by an attorney.
(3) For purposes of this section, professional representation by an athlete agent, financial advisor, or attorney must be provided by persons licensed in this state, as applicable.
Sec. 6. A student shall not enter into an apparel contract providing compensation to the student for use of his or her name, image, or likeness rights that requires the student to display a sponsor’s apparel, or otherwise advertise for a sponsor, during official team activities if the provision is in conflict with a provision of the student’s postsecondary educational institution’s team contract.
Sec. 7. (1) A student who intends to enter into a verbal or written opportunity or contract that would provide compensation to the student for use of his or her name, image, or likeness rights shall disclose the proposed opportunity or contract to a designated official of the postsecondary educational institution that the student attends, as designated by that institution, at least 7 days prior to committing to the opportunity or contract, for review by that institution.
(2) If the postsecondary educational institution described in subsection (1) identifies a conflict between the student’s proposed opportunity or contract and any existing agreements of the postsecondary educational institution, the postsecondary educational institution shall communicate that conflict to the student so that the student may negotiate a revision of the opportunity or contract to avoid the conflict and that revision is subject to additional review and approval by the postsecondary educational institution in accordance with this section.
(3) A team contract of a postsecondary educational institution’s athletic program shall not prevent a student from receiving compensation for using his or her name, image, or likeness rights for a commercial purpose when the student is not engaged in official team activities.
(4) This section does not apply to a contract entered into, modified, or renewed on or before the effective date of this act.
Sec. 8. A legal settlement arising under this act shall not permit noncompliance with this act.
Sec. 9. (1) By December 31, 2020 and by December 31, 2021, any nonprofit trade association that represents postsecondary educational institutions in this state shall provide for each of those years, respectively, a written summary of both of the following to the chair of the appropriations committee of the house of representatives, the chair of the appropriations committee of the senate, and the chair of the ways and means committee of the house of representatives:
(a) Progress made by the National Collegiate Athletic Association toward the development of a national policy, including updates to relevant bylaws and rules, on student athlete name, image, and likeness compensation, as directed by that association’s board of governors on October 29, 2019.
(b) Congressional action on legislation on student athlete name, image, and likeness compensation, including, but not limited to, the proposed congressional advisory commission on intercollegiate athletics act of 2019, as proposed by H.R. 5528 of the 116th Congress.
(2) By June 30, 2022, any nonprofit trade association that represents postsecondary educational institutions in this state shall provide to the chair of the appropriations committee of the house of representatives, the chair of the appropriations committee of the senate, and the chair of the ways and means committee of the house of representatives a written summary of the preparedness of the association’s respective member institutions toward implementation of this act.
Sec. 10. (1) This act does not require a postsecondary educational institution, athletic association, conference, or other group or organization with authority over intercollegiate athletics to identify, create, facilitate, negotiate, or otherwise enable opportunities for a student to earn compensation for the student’s use of his or her name, image, or likeness rights.
(2) This act does not establish or bestow the right of a student to use the name, trademarks, services marks, logos, symbols, or any other intellectual property, whether registered or not, of a postsecondary educational institution, athletic association, conference, or other group or organization with authority over intercollegiate athletics, in furtherance of the student’s opportunities to earn compensation for the student’s use of his or her name, image, or likeness rights.
(3) This act does not limit the right of a postsecondary educational institution to establish and enforce any of the following:
(a) Academic standards, requirements, regulations, or obligations for its students.
(b) Team rules of conduct or other rules of conduct.
(c) Standards or policies regarding the governance or operation of or participation in intercollegiate varsity athletics.
(d) Disciplinary rules and standards generally applicable to all students of the postsecondary educational institution.
Sec. 11. (1) Sections 9 and 11 of this act take effect on the date it is enacted into law.
(2) Sections 1, 2, 3, 4, 5, 6, 7, 8, and 10 of this act take effect December 31, 2022.
Enacting section 1. (1) Sections 9 and 11 of this act take effect on the date it is enacted into law.
(2) Sections 1, 2, 3, 4, 5, 6, 7, 8, and 10 of this act take effect December 31, 2022.
This act is ordered to take immediate effect.
Now that Student Athletes will have the ability to profit off of their name, image and likeness, they have to remain conscious about certain thresholds that could have certain tax consequences. Specific to the State of Michigan:
The Michigan NIL Law states that athletes cannot endorse alcohol, tobacco, gambling, weapons, pharmaceuticals, banned athletic substances, drugs or drug paraphernalia, or adult entertainment. Athletes must disclose proposed NIL contracts, including projected compensation, to a designated official at the school. NIL contracts must not conflict with school contracts, policies, or rules. Athletes cannot engage in NIL activities during games or practices. Agents and attorneys hired by athletes must be licensed by the state.
Michigan NIL started on July 1, 2021, per the NCAA Interim Policies and with the passage of House Bill 5217, Michigan State NIL laws will take effect on January 1, 2022.
Michigan 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!
Both athletes and administrators in the State of Michigan should start by making sure they have a proper understanding of the rules and regulations set-forth by House Bill 5217. A working-knowledge of the ‘Dos and Don’ts’ for Michigan 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.
All institutions with NCAA athletic programs are affected by NIL. In the state of Michigan, the following schools will be affected:
D1
D2
D3
NAIA
NJCAA
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