Idaho and California businesses and startups that are seeking to enter the Name, Image, Likeness market should seek guidance and recommendations to ensure that they are complying with state laws and NCAA rules. Included below is a compilation of large and important NIL markets that business may be seeking to enter as well as the basics of the NCAA’s current rules.
Current NCAA NIL Rules
In 2021 the NCAA released an interim NIL policy that affected all student-athletes in divisions I, II, and III. The new policy still prohibits athletes from engaging in pay for play and for improper recruiting inducements but allows for student-athletes to engage in NIL activity. Student-athletes in states with no NIL laws may still engage in NIL activity, student-athletes in states with NIL laws must comply with those state laws, and all student-athletes may seek professional service providers to help them facilitate NIL activity.
Important NIL states and their laws
- Institutions shall not uphold “rules, requirements, standards, or any other limitations” that would prevent a student-athlete from participating in intercollegiate athletics because of the student-athlete being compensated for their NIL. NIL compensation shall not affect a student-athlete’s eligibility for scholarships.
- Student-athletes may obtain professional representation for legal and contractual matter. This representation must be licensed to work within California.
- Student-athletes cannot enter NIL contracts that would conflict with contracts of their teams. Eg. University of Southern California does not allow student-athletes to endorse products that would compete with Powerade.
- Student-athletes must disclose the NIL deals that they enter, to a designated school official.
- Student-athletes must disclose their NIL contracts to their institution prior to entering the contract.
- Student-athletes may not enter into NIL agreements that would on conflict with any teams’ contracts, institution contracts or honor codes rules, or policies of the athletic department.
- Student-athletes may not enter NIL contracts that endorse certain products such as alcohol, tobacco, gambling, etc.
- Student-athletes cannot enter NIL contracts that would occur past their time as a college athlete.
- Only student-athletes enrolled at a college or university can enter NIL contracts. Student-athletes cannot enter NIL contracts prior to their enrollment.
- Idaho has no state NIL laws.
- Alabama repealed their NIL law and currently has no NIL laws.
- Student-athletes may be compensated for NIL contracts. This compensation must meet the “market value” of the student athlete.
- Institutions can prevent student-athletes from entering NIL contracts if they conflict with provision of the teams’ contracts or the values of the institution.
- Student-athletes must receive permission from their institution to use any of their marks of logos.
- Student-athletes must disclose NIL contracts to their institution.
- NIL contracts may not extend past a student-athlete’s participation in college athletics.
Student-athletes in states that do not have NIL laws have to comply with the NCAA interim policy. Institutions may also create their own policies and rules that their athletes need to comply with. Many states share similar NIL law, but Idaho and California businesses should educate themselves on each individual state that they are seeking to work within to ensure that they are in compliance with state laws.
Recommendations from Fisher Hudson Shallat
We have several recommendations for businesses that are seeking to enter the Name, Image, Likeness market. First, we recommend that businesses determine what kinds of products or businesses that their client can and cannot endorse. We also recommend that businesses educate themselves and their clients on what policies and rules that their institutions have in place. Second, we recommend that businesses be aware of the conflicts that may arise between student-athletes and the previous contracts that their institutions and teams may have already entered. Third, we recommend that businesses be aware of the disclosure requirements that each state and institution require. These are just some of the recommendations that we have for businesses that are seeking to enter the Name, Image, Likeness market.
If you are interested in learning more about Name, Image, Likeness laws and compliance, Fisher Hudson Shallat’s Idaho and California attorneys can offer further guidance to help you and your clients are not in violations of state law or NCAA policy.