Pennsylvania NIL Law for NCAA

On June 30th, 2021, Pennsylvania passed a bill that would allow for their colleges and institutions to participate in Name, Image, Likeness (NIL). Pennsylvania is one of the first states to see the legislation go live, as it is effective July 1, 2021. Governor Tom Wolf signed Senate Bill 381, which contains Article XX-K, allowing intercollegiate student-athletes the ability to earn compensation for the use of their NIL.

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Bill
Status

Signed Into Law

Effective
Date

07/01/2021

NCAA
Institutions

Estimated
NCAA Athletes

29,100

High School
NIL Legislation

Last Updated 08/22/22

Pennsylvania NIL Law

In early Oct. 2019, State representatives proposed a ‘Fair Pay to Play Act’ that did not receive much traction until early 2021 where it appeared in the House. The language that was adopted in Article XX-K of the passed state budget, is very similar to that of the proposed bill back in 2019. The following components have been spelled out from the Bill:

Compensation Allowed:

A college student athlete may earn compensation for the use of the college student athlete’s name, image or likeness under this article. The compensation shall be commensurate with the market value of the student athlete’s name, image or likeness. The compensation may not be provided in exchange, in whole or in part, for a current or prospective student athlete to attend, participate or perform at a particular institution of higher education.

Prohibition Regarding Institutions of Higher Education:

An institution of higher education may not:
1. Uphold a rule, requirement, standard or other limitation that prevents a college student athlete of the institution of higher education from earning compensation through the use of the college student athlete’s name, image or likeness rights.
2. Arrange third-party compensation for a college student athlete relating to the use of the college student athlete’s name, image or likeness rights or use a similar type of arrangement as an inducement to recruit a prospective college student athlete.

Prohibitions Regarding Intercollegiate Athletic Entities:

An athletic association, conference or other group or organization with authority over intercollegiate athletics, including the NCAA, may not:
1. Prevent a college student athlete from earning compensation through the use or license of the college student athlete’s name, image or likeness rights.
2. Prevent an institution of higher education from fully participating in intercollegiate athletics as a result of a college student athlete’s use of the college student athlete’s name, image or likeness rights to seek compensation.

Royalty Payment:

A person that produces a college team jersey, a college team video game or college team trading cards for the purpose of making a profit shall make a royalty payment to each college student-athlete whose name, image, likeness or other individually identifiable feature is used.

Prohibitions Regarding Professional Representation:

An institution of higher education, athletic association, conference or other group or organization with authority over intercollegiate athletics, including the NCAA, may not interfere with or prevent a college student athlete from fully participating in intercollegiate athletics for obtaining professional representation in relation to contracts or legal matters, including representation provided by athlete agents, financial advisors or legal representation provided by attorneys, in relation to a college student athlete’s use of the college student athlete’s name, image or likeness rights.
An athletic association, conference or other group or organization with authority over intercollegiate athletics, including the NCAA, may not prevent an institution of higher education from fully participating in intercollegiate athletics without penalty to the institution or individual student as a result of a college student athlete obtaining professional representation in relation to contracts or legal matters, including representation provided by athlete agents, financial advisors or legal representation provided by attorneys, in relation to a college student athlete’s use of the college student athlete’s name, image or likeness rights.

Qualifications:

Professional representation obtained by a college student athlete shall be from a person:
1. Acting as an athlete agent in accordance with 5 pa.c.s. ch. 33 (relating to registration);
2. Acting as a financial advisor in accordance with the laws of this commonwealth; or
3. Admitted to practice law by a court of record in this commonwealth.

Limitation:

A person that represents an institution of higher education may not represent a college student athlete in a business agreement.

Scholarships & Eligibility:

Earning compensation from the use of a college student athlete’s name, image or likeness rights may not affect the college student athlete’s scholarship eligibility, duration or renewal.

Compensation:

For purposes of this article, an athletics grant-in aid or stipend scholarship from an institution of higher education in which a college student athlete is enrolled may not be considered to limit a college student athlete’s right to use the college student athlete’s name, image or likeness rights, except as expressly provided in this section.
An athletics grant-in-aid or stipend scholarship may not be revoked or reduced as a result of a college student athlete earning compensation under this article, except if otherwise mandated by federal or state student aid guidelines.

Contracts & Opportunities:

An institution of higher education, athletic association, conference or other group or organization with authority over intercollegiate athletics may not be required to identify, create, facilitate, negotiate or enable opportunities for a college student athlete to earn compensation for the college student athlete’s use of the college student athlete’s name, image or likeness rights.

Use of Trademarks:

This article shall not establish or grant a right to a college student athlete to use the name, trademarks, services marks, logos, symbols or any other intellectual property, registered or unregistered, of an institution of higher education, athletic association, conference or other group or organization with authority over intercollegiate athletics, in furtherance of the college student athlete’s opportunities to earn compensation for the college student athlete’s use of the college student athlete’s name, image or likeness rights.

Enforcement:

This article shall not limit the right of an institution of higher education to establish and enforce any of the following:
1. Academic standards, requirements, regulations or obligations for the institution of higher education’s college student athletes.
2. Team rules of conduct or other rules of conduct.
3. Standards or policies regarding the governance or operation of or participation in intercollegiate athletics.
4. Disciplinary rules and standards generally applicable to all students of the institution of higher education.

Prohibition:

A college student athlete may not earn compensation as a result of the use of the college student athlete’s name, image or likeness in connection with a person, company or organization related to or associated with the development, production, distribution, wholesaling or retailing of any of the following:
1. Adult entertainment products and services.
2. Alcohol products.
3. Casinos and gambling, including sports betting, the lottery and betting in connection with video games, online games and mobile devices.
4. Tobacco and electronic smoking products and devices.
5. Prescription pharmaceuticals.
6. A controlled dangerous substance.
An institution of higher education may prohibit a college student athlete’s involvement in name, image or likeness activities that conflict with existing institutional sponsorship arrangements at the time the college student athlete discloses a contract to the institution of higher education as required under subsection
An institution of higher education, at the institution of higher education’s discretion, may prohibit a college student athlete’s involvement in name, image or likeness activities based on other considerations, such as conflict with institutional values, as defined by the institution of higher education. an institution of higher education shall have policies that specify the name, image or likeness activities in which college student athletes may or may not engage.

Disclosure:

A college student athlete who proposes to enter into a contract providing compensation to the college student athlete for use of the college student athlete’s name, image or likeness rights shall disclose the contract at least seven days prior to execution of the contract to an official of the institution of higher education, who is designated by the institution of higher education.

Protections and Right to Adjudicate:

A college student athlete, institution of higher education or conference shall not be deprived of a protection provided under state law with respect to a controversy that arises in this commonwealth and shall have the right to adjudication in this commonwealth of a claim that arises in this commonwealth.

Tax Implications

FAQ’s

Pennsylvania NIL FAQ’s

What is the Pennsylvania NIL Law?

The Pennsylvania NIL Law is an Article that is embedded within the State Budget proposal under “Senate Bill 381” authorizing an intercollegiate athlete at a postsecondary educational institution to earn compensation for the use of her or his Name, Image, or Likeness (NIL), and to see professional representation.

When does Pennsylvania NIL Compliance Start

?
Pennsylvania NIL started on July 1, 2021, per the NCAA Interim Policies and with the passage of Senate Bill 381, Pennsylvania State NIL laws also took effect on July 1, 2021.

How does Pennsylvania NIL affect NCAA Student-Athletes?

Pennsylvania 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 other opportunities!

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

Both athletes and administrators in the State of Pennsylvania should start by making sure they have a proper understanding of the rules and regulations set-forth by Senate Bill 381. A working-knowledge of the ‘Dos and Don’ts’ for Florida 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 Arizona Schools

What schools are affected by Pennsylvania NIL?

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

Bucknell University
Drexel University
Duquesne University
La Salle University
Lafayette College
Lehigh University
University of Pennsylvania
Pennsylvania State University
University of Pittsburgh
Robert Morris University
Saint Francis University
Saint Joseph’s University
Temple University
Villanova University

Bloomsburg University of Pennsylvania
California University of Pennsylvania
Chestnut Hill College
Clarion University of Pennsylvania
East Stroudsburg University of Pennsylvania
Edinboro University of Pennsylvania
Gannon University
Holy Family University
Indiana University of Pennsylvania
Thomas Jefferson University
Kutztown University of Pennsylvania
Lincoln University
Lock Haven University of Pennsylvania
Mansfield University of Pennsylvania
Mercyhurst University
Millersville University of Pennsylvania
University of Pittsburgh at Johnstown
Seton Hill University
Shippensburg University of Pennsylvania
Slippery Rock University of Pennsylvania
University of the Sciences in Philadelphia
West Chester University of Pennsylvania

NAIA

Carlow University
Penn State Schuylkill
Point Park University

NJCAA

Community College of Allegheny County-Allegheny
Community College of Allegheny County-Boyce
Community College of Allegheny County-North
Community College of Allegheny County-South
Community College of Beaver County
Bucks County Community College
Butler County Community College (Pennsylvania)
Harcum College
Lackawanna College
Manor College
Northampton Community College
Thaddeus Stevens College of Technology
Westmoreland County Community College
Williamson Free School of Mechanical Trades

NJCAA
D3

Albright College
Allegheny College
Alvernia University
Arcadia University
Bryn Athyn College
Bryn Mawr College
Cabrini College
Cairn University
Carnegie Mellon University
Cedar Crest College
Chatham University
Clarks Summit University
Delaware Valley College
DeSales University
Dickinson College
Eastern University
Elizabethtown College
Franklin & Marshall College
Geneva College
Gettysburg College
Grove City College
Gwynedd Mercy College
Haverford College
Immaculata University
Juniata College
Keystone College
King’s College
La Roche University
Lancaster Bible College
Lebanon Valley College
Lycoming College
Marywood University
Messiah University
Misericordia University
Moravian College
Mount Aloysius College
Muhlenberg College
Neumann College
Pennsylvania College of Technology
Penn State Abington
Penn State Altoona
Penn State Erie, The Behrend College
Penn State Berks
Penn State Harrisburg
University of Pittsburgh at Bradford
University of Pittsburgh at Greensburg
Rosemont College
University of Scranton
Saint Vincent College
Susquehanna University
Swarthmore College
Thiel College
Ursinus College
University of Valley Forge
Washington and Jefferson College
Waynesburg University
Westminster College
Widener University
Wilkes University
Wilson College
York College of Pennsylvania

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