Get Ready Dealerships: Future Pay Day for Student-Athletes Coming Soon and This Will Benefit You
For years, the NCAA has prohibited student-athletes from profiting from their name, image, and likeness (“NIL”). Examples of such prohibited activities include, but are not limited to, signing autographs, personal appearances, promoting a business, social media endorsements, and representations in video games. But student-athletes may soon be able to profit from their NIL.
The NCAA rule prohibiting student-athletes from profiting from their NIL is set to be revised, and by the Fall of 2021 student-athletes could start receiving money for their NIL from local businesses and parties seeking to use student-athletes for promotional activities and endorsement deals. This would allow automobile dealers to hire student-athletes to make personal appearances at dealerships and utilize student-athletes in advertising campaigns. For example, if this rule was in place in 2020, a car dealership could have hired Joe Burrow, while he was still enrolled at LSU, to make a personal appearance at the dealership or be the focus of a marketing campaign. Once passed, this rule will allow a car dealership to use the next big college star to promote their business. A draft of the rule has been released, giving us a glimpse of the final rule.
The proposed legislation allows student-athletes to do the following and use their NIL to:
Develop businesses and partake in business activities, including establishing camps and clinics and providing private lessons, as long as the student-athlete does not use school logos, colors, or marks.
Endorse products through commercials and appearances, and participate in other business adventures as long as the student-athlete does not use their school name, logo, colors, or other identifying information related to the school that they attend.
Participate in and be compensated for autograph sessions, as long as the session does not occur during a school event, and school logos or marks are not used during the session, including any apparel worn by the student-athlete.
Profit from crowdfunding efforts, such as GoFundMe, to raise money for non-profits or charities, family hardships, and educational experiences.
It’s important to note that if an automobile dealership engages a student-athlete to partake in a NIL activity, that the student-athlete in no way can use school marks, logos, and other identifying information to link a student-athlete to a specific school. Furthermore, student-athletes will be prohibited from profiting from the following NIL activities:
Profit from commercial activities involving a product or service that conflicts with current NCAA legislation and rules, such as sports betting or gambling.
Receive compensation for NIL activities that conflict with existing school sponsorship arrangements and deals or other institutional values.
The vote on the final NIL rule was scheduled to take place in January 2021, but has since been postponed. Instead, the NCAA Division I Council adopted a resolution to commit to modernizing the NIL rules. The NCAA did not provide any information as to when the NIL legislation will potentially be voted on but have stated that they remain dedicated to updating and revising the NIL rules.
While the final legislation remains to be seen, both student-athletes and businesses will see financial impacts from NIL activities and may have an increased need for legal and financial services. For example, if an automobile dealership intends to enter into a NIL arrangement with a student-athlete, the dealership should execute a contract between the parties setting out both parties' obligations to ensure they are protected. In addition, it can also help ensure that the arrangement does not violate any NCAA rules.
The proposed NIL legislation is going to change the world of collegiate athletics as we know it. If an automobile dealership is thinking about venturing into any NIL activities, it is important to seek advice from professionals who are familiar with the legislation and business impacts surrounding NIL decisions and arrangements. Breazeale, Sachse, and Wilson is monitoring the progress of the NIL legislation closely to be ready to provide any advice and guidance to student-athletes, business owners, and any other parties who are seeking to participate in NIL activities.