Introduction:
On July 1, 2021, the National College Athletic Association (NCAA) lifted the rules regarding restrictions on a college athletes’ ability to profit off their name, image, and likeness (NIL). More specifically, athletes can now receive compensation for a third-party endorsement, can receive compensation from social media posts, create businesses, be sponsored by a business, and participate in personal appearances. However, what these new rules mean for each college athlete varies based on what state the college athlete is in, what school the athlete attends, what conference the athlete is in, what team the athlete plays on and what business the athlete is expecting to receive compensation from. One wrong endorsement can ruin the college athlete’s eligibility to continue to play in the NCAA.
These new rules have provided its member schools sweeping discretion to set its own rules about how players can make money while playing college sports. The NCAA’s new policy comes as States are quickly adopting new laws to allow college athletes to profit off their name, image, and likeness. For example, Texas State Bill No. 1385 Section 51.9245, which came into effect as of July 1, 2021, prohibits schools from adopting or enforcing a policy, requirement, standard, or limitation that prohibits or otherwise prevents a student athlete from earning compensation for the use of his or her name, image, or likeness. Below is a list of commonly asked questions regarding the new Texas Name, Image, and Likeness (NIL) law:
1. What is NIL?
A name, image, and likeness activity involves a student-athlete providing consent for the use of their name, image, or likeness for commercial or promotional purposes.
2. What can I do with my NIL?
- Receive compensation from a business to use your NIL to promote their product or service.
- Use your NIL to promote your own business or a business you are working for. Receive compensation to sign autographs or appear at a business or private event. Utilize an agent or attorney to assist with any NIL activities, provided you have a written agreement with the attorney/agent that is specific to NIL activities. Please note that you do not have privileged communication with agents. However, any communication with an attorney is privileged communication and can allow you to explore further compensation options knowing your communications with your attorney are privileged.
- You MUST disclose all your NIL activities with your school. Please check your school’s policy on how disclosure is to take place. Disclosure MUST occur before the NIL activity takes place or a contract with a new business is signed.
NOTE: Whether you can sign an autograph on merchandise purchased from the school and resell the signed merchandise to third parties will depend on the state, school, and conference you are in. To learn more about what a college athlete can and cannot do with their NIL, please give us a call at (214) 423-5100.
3. What do I have to disclose?
You must disclose who is compensating you, what NIL activities you are providing and how much compensation you are receiving. Each school will likely have a disclosure process. However, if the school does not, the requirement to disclose remains. Be prepared to provide contact information for all people involved and proof of activities and compensation.
4. What can I NOT do with my NIL?
- Engage in any NIL activities that conflict with an existing contract/sponsor agreement with your university or your university’s student honor code.
- Use your university’s trademarks in NIL activities. Engage in any NIL activity in a business prohibited under state law. This includes:
- Alcohol, tobacco, e-cigarettes, or any other type of nicotine delivery device;
- Anabolic steroids;
- Casino gambling or sports wagering;
- A firearm you cannot legally purchase; or
- A sexually oriented business as defined in Section 243.002, Local Government Code
- NIL cannot be conditioned or offered in exchange for athletic performance or continued enrollment/participation at the university or any other school.
- NIL activity cannot occur during organized team activities as defined in your athletic contract.
5. What happens if there is a conflict with an existing contract/sponsorship agreement with your university or your university’s honor code?
After a disclosure of an NIL activity your university shall promptly disclose the conflict to the student athlete and the student athlete is then responsible for resolving the conflict not later than the 10th day after the date of the disclosure. How you should cure the conflict or what happens to the athlete if the conflict is not cured will vary depending on the school and how the specific contract/sponsorship agreement is worded. It will be important to have an experienced lawyer who can ensure the athletes eligibility to continue to play in the NCAA be protected in the event the school states there is a conflict.
6. What can you wear during NIL activities?
You cannot wear anything with your university logo or marks during the NIL activity. You may reference athletics participation at your school in NIL activities but are still prohibited from the use of protected trademarks in such activities. For example, a commercial photoshoot identifying you as a University student-athlete without using protected marks would be permissible.
7. What can I post on my Instagram, Facebook, or Twitter?
You cannot use content (photo, video, audio) provided by your school, or featuring university marks in a NIL post. You CAN have a co-sponsored Instagram post followed by a non-sponsored post of you in a University uniform.
8. Can I sell Merchandise?
You can sell anything you have purchased. However, your school may restrict the resale of items with university marks. You will need to review your NIL school policy to determine whether the resale of items with university marks is allowed.
9. Can I sell memorabilia?
You cannot sell team-issued gear or items (unless you purchase it from your school) until you exhaust your eligibility.
10. What can I not Say?
Per some school policies, you cannot use any official university phrases in NIL activities. Avoid using cheers and slogans you would hear fans cheering at sporting events. This rule also varies based on what school you are attending, in what state you are attending school, and with which conference you are in (i.e. Big 12, SEC, ACC).
Conclusion:
Each Texas school has adopted new policies and rules on how their players are expected to disclose their NIL activity, restrictions on NIL activity, and resources to help their players market their NIL. It will be extremely important for college athletes to understand what they can and cannot do with their NIL as one wrong move can impact their eligibility in college athletics. Schools across the country are adopting, implementing, and changing their rules around NIL. Some schools will have more favorable policies than other and therefore may be the leading contender for a prospective college athlete. If you have questions about Texas’ NIL law or how you can use your NIL to further your career, please contact Albin Oldner Law, PLLC.
