By Connor Glass, CCHA
Since the NCAA released its Interim Name, Image and Likeness (NIL) Policy in July of 2021, the organization has actively been trying to provide more clarity around its rules. Various Q&A’s, memorandums, and guidance have been released over the last two years, covering a variety of topics from recruiting and inducements to boosters, collectives, and third-party entities to institutional involvement and state laws.
Still, confusion persists among individuals, institutions, and entities as to what they can and cannot do in this new and evolving NIL world. Prospective student athletes want to ensure that they are committing to schools with promising NIL opportunities, without jeopardizing their eligibility. Current student-athletes want to earn as much money as possible, while making sure the terms of their NIL agreements are up to snuff. Institutions are feeling pressure to stay competitive within the NIL landscape without getting over-involved and violating the NCAA’s guidelines. Boosters want to put their money in the NIL space without the risk of disassociation.
For the reasons mentioned above, navigating NIL has felt like an extremely thin tightrope-walk in which the risks can be devastating, and the rewards can be life-changing. Generally, it has been difficult to determine whether the NCAA is embracing its NIL policy or trying to pull the reigns back on an industry it created. However, recent reports indicate that the NCAA is starting to approach NIL with a clearer, more unified vision: better outcomes for college athletes.
Earlier this month, the Division I Council voted unanimously to introduce several NIL proposals to boost student-athlete protections, which could be adopted in January of 2024. The proposals include the development of a voluntary registry for NIL service providers; disclosure and transparency requirements for NIL deals exceeding a certain value; standardized best practices for NIL contracts; and student-athlete education. NCAA President Charlie Baker showed his support of the proposals, saying, “[t]oday’s action by the DI Council is a great step toward achieving our shared priority at the NCAA, which is better outcomes for all college athletes who participate in NIL activities.”
Registration of NIL Service Providers
By creating a centralized registry, student-athletes would be able to review and compare NIL service providers. Agents and financial advisors would be able to voluntarily register with the NCAA, providing descriptions of their services, fee structures, and information regarding their background and education. Meanwhile, student-athletes could “shop” around for the most appealing NIL service providers, while publishing reviews and/or ratings of their own experiences.
Accountability is something that has generally been missing from the NIL landscape. Institutions’ compliance offices are understandably reluctant to read through NIL contract terms, and student-athletes don’t know where else to go. As a result, a lot of student-athletes are entering into contracts without a trusted adult reading them first, let alone a legal professional providing feedback. Other student-athletes are relying on “NIL agents” who may take a large portion of the student-athlete’s earnings or, in some cases, future professional earnings.
A centralized registry would provide some much-needed guidance for student-athletes. Specifically, student-athletes will be able to make better informed decisions as to which professional service providers to use based on the reviews and/or rankings written by their peers. For a generation that often resorts to online reviews as part of most decision-making processes (whether it’s deciding on a primary care physician or the best tacos within a 20-mile radius), the centralized registry could be an easily digestible tool for student-athletes. Additionally, it would give institutions, compliance offices, and coaches somewhere to point student-athletes who approach them with NIL questions.
Disclosure and Transparency
Student-athletes would be required to report specific information to their schools regarding NIL agreements exceeding a certain value within thirty days of entering such an agreement. If an NIL agent was involved in the arrangement of the deal, the agent’s name and the nature of the arrangement would also be disclosed. Additionally, prospective student athletes would need to disclose all current or previous NIL arrangements prior to issuing a National Letter of Intent.
It remains unclear how the NCAA would be able to monitor and enforce such disclosures, but the proposed rule seems to be addressing the lack of accurate NIL information available for the NCAA’s consideration. “Collecting these data will help everyone involved make informed decisions on future governance decisions should they be necessary,” Lynda Tealer, chair of the DI Council, explained. Additionally, requiring the disclosure of the agent’s name and the nature of his or her arrangement with the student-athlete would help hold these service providers accountable and hopefully reduce the prevalence of “bad actors” in the NIL space.
Standardized Contract Terms
The NCAA would develop a list of best practices for NIL contracts, providing standardized contract terms for recommended use. Possible terms would include:
- Description of services to be performed.
- Payment structure (fee ranges, amount of compensation).
- Duration of contract.
- Termination clause for breach of contract.
- Student-athlete right to terminate contract at conclusion of NCAA eligibility.
- Attestation of acknowledgement that pay is being provided for work performed and not athletics participation.
- Attestation that compensation provided is not a recruiting inducement.
Such recommendations would provide a good foundation for student-athletes, NIL agents, and collectives in drafting NIL contracts. Considering that arrangements between NIL agents and student-athletes may need to be disclosed to the NCAA, it would be in the best interest of all parties involved to use the standardized terms in drafting NIL contracts. These terms could also help alleviate the issue discussed above—that student-athletes may not be in a position to consult a professional on the terms of the contract.
The NCAA would create an education program for student-athletes regarding the current NIL environment. The following concepts would be included:
- The regulatory environment in federal, state and local laws and how those laws intersect with NCAA rules.
- An overview of types of NIL opportunities that exist for college athletes, including work product, group licenses and individual licenses.
- Education on elements of NIL agreements, including how to read contracts, awareness of arbitration provisions, taxable income, selection of service providers, and other topics.
- Generating marketing opportunities through the development of a personal brand and social and digital media.
- Balancing sports, self-care, and NIL opportunities.
Such education would help student-athletes feel less in the dark when it comes to NIL matters. By focusing on educating student-athletes and staying up to date on the NIL environment, the NCAA could demonstrate how it is embracing its NIL policies.
People often refer to the NCAA’s NIL landscape as the “Wild West,” inferring that there’s a lawlessness and lack of regulation in the evolving space. The DI Council’s recent proposals demonstrate active steps the NCAA is taking to change that narrative. By stressing the importance of student-athlete protection through accountability, transparency, and education, the NCAA is embracing its NIL landscape rather than reacting to it.