On Tuesday, the NCAA Board of Governors supported a rule change proposal that would allow student-athletes to receive compensation for their “name, image, and likeness” (NILs). As a result, student-athletes could soon be paid for social media endorsements, commercial appearances, autograph sales, and more without losing their athletic eligibility. The NCAA plans to draft the specific language of rule by October 31 and vote on the proposal before January 31, 2021. Under this timeline, these rule changes could be in effect as soon as the 2021-2022 athletic season.
This comes as a major role reversal for the NCAA who famously claimed NILs were an “existential threat” to college sports just last year. However, as the number of states who were passing legislation creating a pathway for student-athlete compensation began piling up, the NCAA was pressured into swiftly changing course. Just mere weeks after hinting that NILs could be a doomsday for college athletics as we know it, the NCAA released a statement near the end of 2019 vowing to “immediately consider” the issue as long as a modernization would not negatively impact “the collegiate model.” The wordy, non-committal statement was certainly not a ringing endorsement of NILs compensation but read like a delay tactic boiling down to “eh, we’ll think about it.”
Thus, Tuesday’s announcement marks a decisive change and a monumental step toward player rights in college sports. While the proposal still has to be voted on down the road, the fact that the NCAA has thrown their support behind the potential rule change is a major victory for student-athletes.
The recent press release lacks some specifics about the proposal, as many of the details still have to be ironed out. However, it does lay out a basic overview of potential payment opportunities and outline some potential restrictions.
Let’s take a closer look at the proposal.
Opportunities for athletes to be paid:
– Third-party endorsementss (promotions via TV, radio, or ads)
– Social media influencing (product placements, modeling, and endorsements via Instagram, TikTok, Twitter, etc.)
– Personal businesses and content creation (including podcasts, YouTube channels, videogame streaming, clothing brands, music/art performances, and content behind paywalls such as fitness training videos that can be purchased by consumers)
– Personal promotions (autographs, meet and greets)
Most notably, the proposal highlights that there will be no cap on endorsement earnings. Early in the process, there were some rumors that endorsement earnings might be limited to a certain amount; however, this not the case.
The NCAA has noted that the emergence of technology as a moneymaking tool is a large reason for their decision to update their rules. It’s now easier than ever to make money on the Internet; yet, student-athletes have been unable to capitalize off of their name while their schools rake in the profits.
Take former USC wide receiver Michael Pittman. As a student-athlete, Pittman created a YouTube channel with his girlfriend called “Michael and Kiana.” From detailing life as a student-athlete to college apartment tours to a Q&A, they amassed a large following partially build off of his prominence on the field. After only a few videos posted, they had already accumulated 30,000 subscribers. Unfortunately, with tens of thousands of subscribers and views, the two could not make any profit off of the channel because of NCAA rules. Now, just days after he was drafted by the Indianapolis Colts, the channel has risen to over 96,000 subscribers, providing what now can be an additional revenue stream that was previously untapped because of amateurism rules. If this proposal is passed, those who follow in Pittman’s footsteps could use YouTube to earn tens of thousands of dollars per year while still in school.
There is also the famous case of former Tennessee receiver Josh Smith and his girlfriend Breanna Dodd. In 2016, Dodd was paid to do a product placement of Jolly Rancher on Instagram shortly after being voted the “hottest college football girlfriend of the season” by Barstool Sports. Using her Internet fame, she was able to get paid to promote a product to her then-23,000 Instagram followers while her boyfriend was prohibited from using his football fame for a similar purpose.
Today, the prevalence of Instagram has only made endorsements more valuable as the social media site is ubiquitous in society. Former Marshall volleyball player Kayla Simmons used her Instagram during college to highlight her love for fitness, swimwear, and modeling. Unfortunately, not only was she unable to profit off of her venture, but she was reportedly condemned by the University for her posts and Marshall even allegedly requested that she shut down her account. After graduation, she has built-up her following to over 423,000 Instagram followers and makes a living off of social media endorsements.
Restrictions under the proposal:
– While student-athletes are allowed to identify themselves as participants of a particular sport at a particular school, student-athletes cannot use any intellectual property (logos, copyrights, trademarks) from their school or conference
– Schools or conferences cannot make endorsement payments themselves
– Schools or conferences cannot facilitate or help student-athletes find endorsements
– Schools cannot use endorsements as a means of paying for enrollment or participation in athletics
– Schools cannot allow boosters to use endorsements as a means for paying for enrollment or participation in athletics
– Endorsements received must be a genuine payment for use of NILs, not a disguised payment for participation or selecting a certain school (in other words, endorsements must be independent of athletic performance rather than payment for athletic performance)
– Student-athletes cannot request to be compensated for NILs in situations in which they have no legal right for such compensation
These restrictions are obvious safeguards protecting the rights of the NCAA’s member institutions and ensuring that payments to student-athletes are not compensation for play, as to maintain the NCAA’s staunch adherence to their favorite word: “amateurism.”
Other items under consideration:
– Regulations for third parties, such as marketing agencies or financial advisors
– Potentially prohibiting endorsements from certain areas that are in conflict with the NCAA’s membership values (including potentially alcohol, tobacco, and sports gambling)
– Potentially prohibiting endorsements from athletic apparel and shoe companies because of previous incidents across history where these companies have, according to the NCAA, encouraged and facilitated “rules infractions”
– Potentially attempting to assess fair market value of endorsements to ensure all of the regulations are properly followed
Many of these areas under consideration are similar to state legislative initiatives already working their way through governments. However, there are a few specific holes that the NCAA has not yet addressed that state governments have.
For example, California’s revolutionary SB 206 Bill that was signed into law last fall (but has yet to take effect) requires specific disclosures from student-athletes to their universities detailing their endorsement compensation. What red tape must a student-athlete go through when disclosing an endorsement? If the endorsement has to be approved by the school, how long will the process take?
California’s bill and Florida’s proposed HB 251 also state that student-athletes must not enter into a contract that is in direct conflict to a university athletic team’s contract. in other words, since Indiana is an Adidas school, student-athletes could not have a deal with Nike. The NCAA is considering preventing all athletic shoe/apparel company endorsements for student-athletes, which would eliminate this particular scenario, but how far is the NCAA willing to go? If a school’s athletic department has a contract with Dunkin’ Donuts, does that prevent a student-athlete from doing a paid Starbucks product placement on TikTok?
Either way, it seems that athletic departments across the country will have to go through an overhaul as compliance departments will be more important than ever.
The NCAA’s legislative efforts
Part of the proposal also includes the NCAA continuing its legislative efforts. The NCAA hopes to converse with Congress to create federal legislation regarding name, image, and likeness in order to preempt state laws that have already passed to get all of the country under the same umbrella of rules. Similarly, the NCAA is pushing for a “safe harbor” provision to protect against lawsuits and to specify that student-athletes will still be considered non-employees, distinct from professional athletes.
For more on what defines NILs, read our recap: here.
For more details on state NILs legislation, check out our breakdown: here.
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