Virginia Will Allow Universities to Compensate Athletes Directly

Last Updated on April 19, 2024

Virginia Governor Glenn Youngkin signed a bill into law on Thursday that will allow the state’s colleges and universities to pay athletes directly through name, image, and likeness deals. 

The law states, in part, that no governing body with authority over college athletics shall “[p]revent an institution from compensating a student-athlete for the use of his name, image, or likeness” or “[p]revent an institution, its supporting foundations, or an entity acting on its behalf from identifying, creating, negotiating, facilitating, supporting, engaging with, assisting with, or otherwise enabling a name, image, or likeness opportunity for a student-athlete.”

The NCAA’s rules currently prohibit schools from signing NIL contracts with their players. Virginia’s law will be the first in any state to make it illegal for the NCAA to punish schools for directly facilitating NIL deals with their athletes. The new legislation is scheduled to take effect on July 1, 2024. 

Compensating students as ambassadors for the university is not a new idea. Marty Ludwig, Director of Trademarks and Licensing at University of Cincinnati, discussed it on the Business of College Sports podcast with host Kristi Dosh. Cincinnati, and many other universities, already work with other influencers on campus as ambassadors, so seemingly athletes could be brought into these existing programs fairly easily.

Former NCAA President Mark Emmert also discussed his idea for athletes as ambassadors with Dosh at an event in late 2022 (later published on the Business of College Sports podcast).

The new law also has potentially significant Title IX implications, which the schools will be forced to navigate. With regards to financial aid, Title IX requires that an institution must provide assistance to members of each sex that is substantially proportionate with their participation rate in athletics. For example, if 40% of an institution’s college athletes are women, then those women should receive approximately 40% of the school’s available athletic aid. However, it remains unclear as to whether this standard would also apply to endorsement deals. This is an issue that may have to be decided through litigation or through guidance from the Department of Education. 

Given the competitive nature of college sports, Virginia’s law may set the stage for broader changes in the industry as other states could decide to enact similar laws in an attempt to keep up with the competition. 

Moreover, the new law could put pressure on the NCAA to adopt similar rules allowing schools to compensate their athletes via NIL. NCAA President Charlie Baker has already expressed openness to this idea in a proposal that was released last December. Despite the media attention that it garnered, there have not been any noteworthy updates on the proposal since it was released.

For now, Virginia is the first and only state to push forward this new model of NIL in college sports.

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