The NCAA on Thursday announced it has accepted recommendations on how best to update its rules on name, image and likeness (NIL) compensation.
The announcement has been expected for some time, even as individual states passed their own legislation allowing for NCAA student-athletes to profit off their NIL. That said, the organization only accepted the recommendations from a working group — headed by Big East commissioner Val Ackerman and Ohio State athletic director Gene Smith — on how to implement these updates.
The final rules, which have yet to be defined and were left nebulous in Thursday’s announcement, are not expected to go into effect in the 2020-21 academic career.
Those are just a few of the hurdles remaining before the NCAA will finally allow its student-athletes to profit off their NIL. Here’s what Thursday’s announcement means for those players, and what happens next in that process:
When do NCAA NIL rules go into effect?
As of Thursday, the NCAA only accepted recommendations that it update its current NIL rules. In its comprehensive report, however, it listed several key milestone left to achieve (and the expected date they’re to be completed) before NIL updates go into effect:
- Aug. 30, 2020: Each of the three NCAA divisions (Divisions I, II and III) are expected to have drafted NIL legislative proposals.
- Oct. 31, 2020: Each of the respective divisional governing bodies are expected to have revised NIL legislation.
- Jan. 31, 2021: Divisional bodies are expected to enact all NIL legislative proposals, which would go into effect “no later than the start of the 2021-22 academic year.”
What is covered under recommended NIL rule updates?
The NCAA’s comprehensive report only stipulates rules changes be made for two categories: “third-party endorsements” and “compensation for student-athlete work product or business activities” — two areas that cover a lot of ground.
Basically, any proposed rules changes would allow student-athletes to do business with third parties for promotional activities and for them to receive compensation for outside business ventures. That also includes any potential compensation generated as a social media creator or influencer, assuming fair market value is in play.
That said, there are several proposed “guardrails” and areas of regulation that will determine whether a student-athlete’s NIL compensation would receive the NCAA’s blessing:
Proposed guardrails for NIL compensation
Below are potential guardrails the NCAA listed as to help monitor and regulate any potential student-athlete NIL earnings:
- Any compensation received by student-athletes for NIL activities represents a genuine payment for use of their NIL, and is not simply a disguised form of pay for athletics participation.
- Schools and conferences play no role in a student-athlete’s NIL activities.
- Student-athletes are not being compensated for uses of their NIL in situations in which they have no legal right to demand such compensation.
- Schools or boosters are not using NIL opportunities as a recruiting inducement.
- The role of third parties in student-athlete NIL activities is regulated.
- Modernization of NIL rules does not interfere with NCAA members’ efforts in the areas of diversity, inclusion or gender equity.
Assuming those precursors are met, schools and conferences must then ensure they do not make endorsement payments themselves; help locate, arrange or facilitate endorsement opportunities; or allow boosters to use such opportunities as a “recruiting inducement or a means of paying for athletics participation.”
Potential areas of NIL rules regulations
Apart from NIL guardrails, the working committee also included several areas that might consider further regulation or outright exclusion (based on the NCAA’s guiding principles):
- Whether alcohol, tobacco and sports gambling should be precluded.
- Whether athletics shoe and apparel companies should be excluded or have limited participation in newly permitted activities, “due to their history of encouraging or facilitating recruiting and other rules infractions.”
- What adjustments should be made to NCAA rules regarding NIL rights of athletes prior to enrollment at an NCAA institution.
- How best to implement safeguards that don’t impose “undue” burdens on student-athlete time.
- How to keep boosters from circumventing NCAA rules.
- Creating a framework to permit student-athletes to engage and consult with professional services providers in connection with their NIL and business activities.
- Creating resources on campus to educate student-athletes about the newly permitted activities and in a manner consistent with gender equity.
NIL rules and the ‘NCAA Football’ franchise
Unfortunately for fans of the “NCAA Football” franchise, the committee did not recommend any changes to its NIL rules as it relates to group licensing, which would be required in order for the video game franchise to return.
Per the NCAA’s report:
“One of the critical lessons learned by the working group during its review of these materials was that the group licensing programs that currently exist in professional sports or the Olympics all benefit from legal structures not available to the NCAA or its member institutions, namely the presence of a player’s association to serve as a bargaining unit for the athletes (in the case of the NFL and MLB group licensing plans) or the presence of federal legislation conferring antitrust immunity related to sports marketing (in the case of the United States Olympic Committee). … The absence of similar legal structures in intercollegiate athletics greatly complicates the NCAA’s ability to pursue a group licensing approach similar to the models used in the professional context.”
A glimmer of hope: The committee did recommend that the divisions continue to research whether it’s possible to support group licensing.
Other areas not included in proposed NIL rules updates
Generally, any NIL compensation facilitated by universities or their governing conferences would be considered invalid under proposed NCAA NIL rules.
Moreover, the NCAA has determined that NIL rights will not extend to news reporting, commentary, entertainment, works of fiction or nonfiction or in incidental advertising, except in cases where the images are used to promote something other than the broadcast itself. That also includes issues where a person owns the copyright to a photo or image of a specific student-athlete. In that scenario, the Copyright Act would preempt any rights said athlete would have under publicity laws, determined state by state.
How do boosters fit into NIL rules?
As noted, one of the biggest areas of feedback regarding recommended NIL rules is how boosters will fit into that framework.
To that point, the committee recommended that outright banning boosters from meeting with student-athletes to be “unnecessarily restrictive.” To that end, the committee recommended possibly integrating a tier system when determining how to monitor boosters and whether any third-party compensation they might offer fits within NCAA rules.
The rules might require divisions to draw distinctions between types of boosters when evaluating participation in NIL activities. For example, a booster who has a long-standing association with the athletics department would have monitored more closely than would someone without such an affiliation.
“That is one of the big issues, of course, that the membership needs to develop guardrails around and determine if they’re engaged, and how, and make sure we have a process to monitor and enforce,” Smith told Sporting News’ Mike DeCourcy. “That has to go to the membership, and ultimately legislation will be developed around that. Their involvement will be defined.”
Potential impediments to enacting new NIL rules
The NCAA report listed several potential hurdles left to clear before it could enact updated NIL rules. Chief among them are current state laws which would supersede any NCAA rules — potentially endangering institutions’ NCAA eligibility in those states — and the potential of future antitrust litigation.
To date, California and Colorado are the only two states to have passed NIL legislation.
To that end, the NCAA Board of Governors also formed a Presidential Subcommittee on Congressional Action to guide the NCAA on how to seek Congressional help enacting any new NIL rules.
The Presidential committee, per the NCAA’s report, recommended the NCAA take the following action in asking for Congressional help:
- Ensure federal preemption over state name, image and likeness laws.
- Establish an antitrust exemption for the (NCAA).
- Safeguard the nonemployment status of student-athletes.
- Maintain the distinction between students-athletes and professional athletes.
- Uphold the NCAA’s values including diversity, inclusion and gender equity.
The subcommittee also advised the NCAA seek exemption from federal and state antitrust laws.
Seeking Congressional help at this time may be difficult for the NCAA, however, as Congress remains effected by the coronavirus (COVID-19) pandemic.