The NCAA has shared its proposed legislative changes related to the ability of student athletes to monetize their name, image and likeness. The legislation will be voted on at the NCAA Division I Council’s convention in January 2021 and would go into effect on August 1, 2021, although conferences can propose amendments until December 15.
The legislation includes significant changes that will allow student athletes to monetize their name, image and likeness either through one-off opportunities or through developing their own businesses.
First, a quick review of current NCAA regulations governing name, image and likeness.
Current NCAA Regulations Governing Name, Image and Likeness
In Division I, student athletes are prohibited from promoting or endorsing a commercial product or service, even if they are not paid for their activity. However, student athletes may use their image for nonathletically-related promotional activities they were engaged in prior to college enrollment.
In Divisions II and III, student athletes may participate in promotional activities if they are not related to athletics, including promoting or endorsing commercial products or services. Student athletes may be paid for these activities under specific conditions, chief among those being that the payment is not based on the individual’s involvement in athletics.
In all three divisions, there are exceptions that allow student athletes to use their name, image and likeness in promotional activities that are charitable, educational or part of nonprofit promotions, media activities, national governing body promotions and camp and congratulatory advertisements.
NCAA Waivers For Monetization of Name, Image and Likeness
Under the current NCAA regulations, student athletes can apply for a waiver if they have an outside venture they’d like to monetize. Since 2015, 98% of all waivers have been approved for student athletes who want to promote their own business or product, totaling more than 200. The key criteria for most of the approved waivers was that the product or service was unrelated to athletics or was tied to education.
Proposed NCAA Governing Name, Image and Likeness for 2021 and Beyond
Proposed legislation has been proposed to be voted upon at the NCAA’s annual meeting in January 2021. Although it is still subject to change, below is a current outline of the proposal. These rules would apply to both current and prospective student athletes.
Student athletes can:
- Receive compensation based on their value as a student athlete, including any value gained as a result of their exposure as a student athlete
- Establish their own business or engage in business activities and receive compensation from those activities
- Use their name, image or likeness to promote athletically or nonathletically-related business activities, including products, services and personal appearances
- Reference the institution they attend consistent with the same policies that apply to any student (however, see below for restriction against using institutional marks)
- Post or repost content created by the institution or one of its vendors to social media, however, the institution retains the rights to the content and the content is not used in any activities for which the student athlete is compensated
- Sell items provided by the institution that are properly retained by the student athlete at the end of the season, such as awards and apparel, but not until they have exhausted eligibility or have become permanently ineligible for competition, however, student athletes may sell institutional merchandise they have purchased subject only to institutional restrictions related to the resale of items including institutional marks
- Be compensated for their autograph, however, a student athlete is not permitted to receive compensation for signing an autograph while participating in a required athletically-related activity or otherwise representing the institution and no institutional marks can be used in conjunction with the sale of the autograph
- Receive compensation for teaching or coaching sport skills or techniques in their sport on a fee-for-lesson basis and use their name, picture or appearance to promote or advertise the lessons, subject to the following conditions: i) if institutional facilities are used, they must follow the same rental processes as the general public; ii) playing lessons are prohibited; iii) compensation is paid by the lesson recipient (or the recipient’s family member) and not any other individual or entity, and iv) the instruction is comparable to what would be provided during a private lesson when the instruction involves more than one individual at a time
- Use their name, image or likeness through a crowdfunding service to raise funds for educational expenses not included in cost of attendance (such as mission trips or internships), as long as there is no institutional involvement
- Sell equipment related to their sport, even if their name, image or likeness is used
- Hire an agent or other adviser, unless it’s to secure an opportunity as a professional athlete
Student athletes cannot:
- Receive pay, or promise of pay, for participation or performance in their sport
- Receive compensation as an inducement for enrollment
- Involve the institution or any institutional staff member in the development, operation or promotion of the student athlete’s business activity, unless it is developed as part of a student athlete’s coursework
- Sell any product or service to an institution or institutional staff member
- Use institutional facilities in the development, operation or promotion of their business activity
- Conflict with existing NCAA legislation, such as rules on sports wagering and banned substances
- Allow their name, image and likeness to be used by an athletic equipment company or manufacturer to publicize that the institution’s athletics program uses its equipment
- Engage in activities that conflict with existing institutional sponsorship arrangements or institutional values (as defined by the institution)
- Receive professional services from an institutional staff member related to the student athlete’s name, image and likeness activities
NIL Disclosure Requirement
Under the new regulations, student athletes are required to disclose their activities that involve use of their name, image and likeness, including details of any relationship with other individuals or entities such as names, contact information and compensation arrangements. These disclosures need to be made in advance of any arrangements or agreements and updates must be provided within 14 days of any changes to the arrangements.
Currently, the NCAA plans to engage a third-party administrator to manage these disclosures.
Institutions are permitted to set forth their own policies related to the name, image and likeness activities in which a student athlete may or may not engage. However, these policies must be provided to prospective student athletes by the point in which an offer of financial aid and/or admission is provided.
Professional Service Providers
The new regulations allow student athletes to engage agents or other advisers in monetizing their name, image and likeness. However, there are some parameters around engaging such advisors.
Key guidelines for use of professional service providers:
- Can be used for advice regarding name, image and likeness
- Can provide representation in contract negotiations related to name, image and likeness
- Cannot be an employee or independent contractor of the institution, with the exception of an entity that contracts primarily to provide product (not services) to the institution
- Fees must be typical by industry standards and must be disclosed in a written agreement
- Student athletes may receive the same de minimis benefits (meals, copies, mailing) a non-student athlete would receive
Institutions can provide information and education related to name, image and likeness and may assist student athletes with evaluating professional service providers but may not make the selection or pay for the services.
One interesting acknowledgement in the proposal states, “…boosters may be the most likely sources of opportunities for student-athletes to engage in name, image and likeness activities. Student-athletes should be permitted take advantage of legitimate opportunities, even if the source of the opportunity comes from a booster of the institution.”
You can view the full Division I proposal here.
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