NCAA Expands Interim NIL Policy

Written By Logan Hughes – On October 26, 2022, the NCAA expanded its interim Name, Image, and Likeness (NIL) policy. The NCAA divided the new policy into 4 sections: (1) The Universities Educating and Monitoring Role (2) The Universities Role in Supporting Student Athletes with NIL Activity (3) The Universities Supporting NIL Entities and Collectives and (4) Specific Violations Regarding Negotiations.

NCAA Expands Interim NIL Policy

On July 1, 2021, the NCAA introduced their interim NIL policy allowing student-athletes to be compensated for their NIL by third parties (individuals or businesses other than universities, university staff, or professional teams in their sports). The NCAA stated student-athletes and universities must follow the laws created by the state where the university is located. If that state has not created any NIL laws, then universities and student-athletes must follow the NCAA interim NIL policy.

In May 2022, the NCAA furthered the original policy. There was a concern that boosters (individuals or entities that promote athletic programs by providing benefits to student-athletes or their families) were abusing the new NIL policy. The NCAA stated that boosters cannot participate in recruiting, and universities cannot facilitate relationships between boosters and student-athletes. Student-athlete NIL deals cannot compensate the athlete for enrollment at a university, athletic performance, or membership on the team.

The October 2022 Expansion of the Policy

Universities’ Educating and Monitoring Role

The NCAA wants to allow universities to educate student-athletes, NIL entities or collectives, boosters, and future student-athletes. Student-athletes must report NIL activity to the university unless state law says otherwise.

Universities Supporting Student Athletes with NIL Activities

Permissible Acts by Universities

  • Universities can hire service providers (e.g., Opendorse) to inform athletes of potential NIL opportunities.
  • Universities can provide stock photos or graphics to athletes, NIL entities, and collectives, as well as provide a space for these parties to meet.

Impermissible Acts by Universities

  • Athletic departments of the university cannot assist in the execution of any NIL activity of the student-athlete.
  • Universities in general cannot provide free services like legal and tax to student-athletes for free unless those services are offered to all students (applicable to law school clinics).

Universities Supporting NIL Entities or Collectives

Permissible Acts by Universities

  • Staff members (e.g., coaches) can assist NIL entities in raising money for the entity, such as an appearance at a fundraiser, or a donated autographed item.
  • Universities can provide things like free tickets and suites to NIL entities in a sponsorship agreement, as long as the NIL entity is treated as any other sponsor.
  • Universities can request donations be made to collectives or other NIL entities as long as they do not request them for a specific sport or athlete.
  • Universities can give donor information and facilitate meetings between donors and collectives or other NIL entities.

Impermissible Act by Universities

  • Staff members cannot donate cash directly to a collective or NIL entity, nor be employed by or have any ownership in an outside NIL entity.

Violations Regarding Negotiations

  • Individuals or entities that represent the university or its athletics, cannot also represent any student-athletes.
  • Universities cannot enter into contracts with athletes for the sale of a product related to their NIL (the athlete needs a third party to purchase the athlete’s product, then sell it to the university).
  • Staff members cannot use a personally owned business to contract with student-athletes. Athletes cannot be paid to promote a coach’s camp.
  • Athletes cannot receive compensation directly or indirectly for promoting an athletic competition they participate in.

Enforcement of the New Policy

The standard of review when the NCAA is investigating a potential NIL rule violation is a presumption that a violation occurred unless the university can clearly demonstrate that there was not a violation. With a difficult standard to defend against and with additional guidance in the near future on the horizon, it is essential that universities, NIL entities, and especially student-athletes obtain legal counsel to avoid problems that can have life-changing implications.

Learn more about Name, Image, Likeness (NIL)

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