The Division I Council (the “Council”) unanimously voted to introduce four new proposals on Wednesday, October 4, 2023, with the goal of providing further guidance and regulation to the name, image and likeness (“NIL”) space. These proposals come after the NCAA Division I Board of Directors requested, in August, that the Council introduce the next round of plans for NIL. Support comes from college athletes themselves, service providers and campus administrators.
“After watching the NIL landscape develop, NCAA members have identified additional resources for student-athletes so they can make informed decisions about their NIL activities,” said Lynda Tealer, chair of the Council and working group. “Division I members support college athletes benefiting from the use of their NIL to the fullest extent, and in no way intend to limit their potential. It is our hope that these changes improve outcomes for student-athletes and help campus leaders navigate this issue with greater clarity.”
The proposals could be adopted as soon as January and consist of a voluntary registry for NIL service providers, disclosure of NIL deals, and standardized contracts and education programs for athletes and others affected in the space.
Registration of NIL Service Providers
Service providers supporting student-athletes in NIL initiatives, such as agents, financial advisors and others, would have the opportunity to register with the NCAA. This would create an information database with the business and educational backgrounds of these service providers, service descriptions and fee structures for student-athletes to then make informed decisions as to who is representing them. Additionally, through this database, student athletes could rate their personal experience, which would provide more transparency to other student-athletes looking to engage with NIL service providers.
The database may also include a dispute resolution system, which would allow student-athletes to express concerns if they are experiencing issues with their service provider. The ultimate goal of this initiative is to provide student-athletes with the best representatives and weed out any bad actors.
Disclosure and Transparency of NIL Agrements
For any NIL agreements exceeding a certain value, still to be determined, student-athletes would be required to report specific information to their school within 30 days of entering into or signing an agreement. Examples could include a description of the arrangement, compensation received, services rendered, term length, etc. If a representative is involved in arranging an NIL deal, the name of the provider and nature of the agreement would be disclosed as well.
For prospective student-athletes, this would require all current or previous NIL arrangements to be disclosed to the school prior to issuing a National Letter of Intent or written offer of athletic aid. All information would then be reported to the national office (or a third-party designee) at least twice per year in an attempt to better equip the NCAA to create updated policies and regulations.
Standardized NIL Contract Terms
The NCAA would lay out a recommended use of specific contractual terms and information for NIL agreements. Possible terms/information would include: 1) description of services to be performed; 2) payment structure; 3) duration of the contract; 4) termination clause for breach of the contract; 5) student-athlete right to terminate the contract at conclusion of NCAA eligibility; 6) attestation of acknowledgment pay is being provided for work performed and not athletics participation; and 7) attestation the compensation provided is not a recruiting inducement. The goal of these boilerplate terms and information is to protect the student athlete, their families and provide transparency as to what is expected from the transaction.
Student-athlete Education on NILs
The final proposal to be considered is a comprehensive plan to produce educational resources. Among the concepts for education are: 1) regulatory environment in federal, state, and local laws and their intersection with NCAA rules; 2) overview of NIL opportunities available for college athletes; 3) education on elements of NIL agreements, including how to read contracts, arbitration provisions, taxable income, selection of service providers, and more; 4) generating marketing opportunities through personal branding and social media; and 5) balancing sports, self-care and NIL opportunities. These resources would be reevaluated regularly to ensure they are up to date with the current NIL landscape.
All of this comes after a summer where no federal legislation was put in place. With these new proposals, the NIL space may have more guidance and regulation as early as the NCAA convention in January. These proposals have the potential to bring much-needed transparency and oversight to the transactions and those who work with student-athletes.
Harris Beach’s Higher Education Industry Team is following this and related matters. To review your school’s NIL policy or approach, or if you have any NIL related questions, please contact attorney Emma G. Powlin at (585) 419-8641 and email@example.com or the Harris Beach attorney with whom you most frequently work.
Harris Beach law clerk Michael Perlo contributed to this report.
This alert is not a substitute for advice of counsel on specific legal issues.
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