College athletes may be able to begin cashing in on their name, image and likeness soon. A significant development occurred Tuesday as the NCAA Board of Governors supported proposed rule changes from a working group to allow athletes to take advantage of these rights. In other words, athletes could soon receive compensation for third-party endorsements, social media influence, personal appearances and their own businesses -- all for the first time.
When adopted in the future, the new rules will would drastically change the landscape of college sports. The recommendations will be considered by the NCAA's three divisions before legislation is drafted. Rules are expected to be written by Oct. 31 with a vote occuring no later than Jan. 31, 2021. Name, image and likeness rights would be in effect for the 2021-22 athletic season.
One catch to the new name, image and likeness rights is that athletes, while permitted to cash in personally and identify themselves as participants in their respective sports, would be unable to utilize conference or school logos or trademarks in promotions. It was also stressed by the NCAA board that member institutions do not need to pay athletes to utilize their name, image and likeness.
"Throughout our efforts to enhance support for college athletes, the NCAA has relied upon considerable feedback from and the engagement of our members, including numerous student-athletes, from all three divisions," said Michael V. Drake, chair of the board and president of Ohio State, in an NCAA statement. "Allowing promotions and third-party endorsements is uncharted territory."
How athletes could be paid
- Third-party endorsements, such as promoting a product or service on television, radio or in advertisements
- Social media influencing, such as modeling or promoting a product or service in exchange for samples or compensation through Twitter, Instagram, TikTok, Facebook, etc.
- Their own work product or business activities, including digital content creation (podcasts, YouTube videos, streaming video games with monetization via advertisements, paywalls, etc.), utilization of talents (athletic lessons), music, art, etc.
- Personal promotions like autograph signings or meet and greets
- There will be no cap on endorsement earnings for athletes
Key restrictions
- Athletes or third parties cannot use a intellectual property (logos, trademarks) from school or conferences in endorsements
- Schools or conferences cannot make endorsement payments themselves
- Schools or conferences cannot facilitate or help athletes locate or arrange endorsements
- Schools cannot use -- or allow boosters to use -- endorsements as a means of paying for enrollment or participation in athletics
In order to institute NIL rights, the NCAA aims to protect itself, its membership institutions and athletes themselves. As such, it has also created a number of guardrails and recommended regulations of these activities.
Guardrails and regulations
- Endorsement is a genuine payment for use of NIL, not a disguised form of pay for play with contingencies -- compensation for participation or inducement in recruiting to select a certain school
- Endorsement is for genuine use of NIL independent of athletic participation or performance rather than payment for participation or performance
- Athletes cannot request to be compensated for NIL in situations in which they have no legal right to demand such compensation
- Regulation of third parties, such as marketing agents and financial advisors
- Potentially attempting to determine "fair market value" for endorsements in order to ensure they meet within the outlined regulations
- Potentially limiting categories of promotion to be consistent with NCAA's membership values (no alcohol, tobacco, sports gambling)
- Potentially limiting categories of third-party endorsements (athletic shoe and apparel companies) due to a history of "encouraging or facilitating recruiting and other rules infractions"
- Potentially making changes to acceptable pre-enrollment activities for athletes
- Potentially ensuring any endorsements do not interfere with the NCAA's efforts towards diversity, inclusion or gender equality
Legal pressures have been mounting over the last decade as players began to realize how valuable their brands can be while they are still in college. The popularity of college football and college basketball -- specifically -- has turned star athletes into potential marketing machines who have been unable to profit off of their success due to NCAA rules.
Additional principles the NCAA is focusing on while allowing athletes to benefit from their stardom while maintaining their eligibility include "maintaining the priorities of education and the collegiate experience," ensuring that all rules careated are "transparent, focused and enforceable" while "facilitating fair and balanced competition," distinguishing between collegiate and professional opportunities, reaffirming that athletes are "students first and not employees of the university" and protecting the recruiting environment.
The NCAA also announced it plans to continue engaging Congress in the issue as it hopes to create federal name, image and likeness legislation in order to preempt state laws that have already been passed. This would include the NCAA having a "safe harbor" for protection against NIL lawsuits and college athletes still being considered non employees who are distinct from professional athletes.
"The evolving legal and legislative landscape around these issues not only could undermine college sports as a part of higher education but also significantly limit the NCAA's ability to meet the needs of college athletes moving forward," Drake said in a statement. "We must continue to engage with Congress in order to secure the appropriate legal and legislative framework to modernize our rules around name, image and likeness. We will do so in a way that underscores the Association's mission to oversee and protect college athletics and college athletes on a national scale."
The most obvious question is how NIL will be regulated, including preventing under-the-table payments beyond the registered endorsement deals. If the NCAA is going to allow marketing agents and advisors to participate, how does it intend to differentiate them from athletic agents that will be salivating for clients upon graduation? Sure, marking agencies might technically be different firms, but it would be naive to think they won't form partnerships with agencies and steer players to specific agents after college.
A massive overhaul will also be necessary inside the walls of athletic departments. Compliance departments around the country are well-staffed but changing their duties to include new marketing oversight rules and responsibilities will be a tall task considering how drastically the rule book will have to change in order to implement these recommendations.
There are a lot of questions on the horizon as the NCAA continues to look for answers.
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