Name, Image and Likeness Rights in College Sports
The pressure ratcheted up on the NCAA Board of Governors recently when Colorado Gov. Jared Polis signed a bill into law giving college athletes rights to profit off of their names, images, and likenesses starting in 2023. It is the third name-image-likeness (NIL) law passed by a state legislature, joining California which passed a law that takes effect in 2023 and Florida where a proposed law to take effect in 2021 awaits the governor’s signature. According to Sports Illustrated, 20 plus other state legislatures have taken up similar laws for consideration.
New NIL laws across America are a ticking time bomb for the NCAA, because NIL rights have taken center stage. The debate over whether and how to pay elite student-athletes for services that generate billions in revenue for colleges and universities is on. By passing laws at the state level to give athletes the right to profit off of their names, images, and likenesses, legislators have created the prospect of schools in those states enjoying massive recruiting advantages over schools in states that have not yet gotten on board with granting athletes NIL rights.
Unfortunately, the newly passed or proposed variations between the laws in different states may create chaos for athletes and recruiters, who will navigate a patchwork of inconsistent rules.
As things currently stand, if Florida’s current proposed law takes effect, the University of Florida and Florida State University recruiting staffs would have at least a two-year head start on their peers in enticing top prospects with the promise of benefiting from NIL rights. California and Colorado schools would then join the scrum in 2023. A classic race to the bottom could inevitably follow as states compete to offer the most permissive and attractive student-athlete compensation rights.
It is shaping up to be organized chaos.
There is a method to the looming madness as NIL rights could prove extremely valuable for some elite athletes. In addition to capitalizing on traditional product endorsements, students who control their own NIL rights would enjoy amazing opportunities to monetize their popularity on social media and e-sports platforms. A top high-school prospect could transform his or her financial fortunes overnight by signing with a college program that permits athletes to sell NIL rights to video game designers or to leverage a social media account as a highly paid influencer.
Because of how valuable NIL rights could become for elite athletes, the race to the bottom outcome seems unlikely. Instead, the practical effect of the passage of NIL laws at the state level could push the NCAA to institute a nationwide policy—driven by filed legislation—governing student-athlete NIL rights. As such, each state’s NIL law represents less of a solution than a means of pressuring the NCAA to finally create a uniform standard.
Flooding state by state legislatures with favorable NIL bills is a strategy that has worked. California passed the first of the NIL laws, and despite predicting that courts would find the law unconstitutional, the NCAA immediately formed a working group to study how to loosen the noose on its NIL restrictions. In October 2019, that working group issued broad recommendations to the NCAA’s Board of Governors that supported modification of rules to allow athletes to control and profit from NIL rights.
In April 2020, the NCAA announced an openness to allowing at least a limited form of NIL benefits in subsequent rule changes, barring any structure wherein a college or university pays the athlete in question directly, meaning it would only permit third-party agreements with athletes. The mantra was essentially “no pay for playing or for on field performance.”
In testimony before the U.S. Senate, NCAA president Mark Emmert articulated the delicate balance the organization hopes to strike through these reforms:
On the one hand, we want to allow opportunities for students to benefit from their NILs. On the other hand, we want to preserve the character and quality of the uniquely American phenomenon of college sports. And with ongoing serial litigation and NIL legislation pending in over half the states, we may need your help to accomplish this on a nationwide basis.
Unfortunately, this NIL landscape needs changing now and given Emmert’s insistence, in the same testimony, that the NCAA would refuse to “consider any concepts that could be construed as payment for athletic play” this is going to be an uphill swim.
To that end, Emmert reiterated the NCAA’s insistence on drawing “a clear line of demarcation between college and professional sports” by barring the use of NIL rights as a “substitute for or vehicle to deliver pay for athletic performance” or as “an inducement for a prospective or current student-athlete to select or remain at a particular NCAA school.”
What Mr. Emmert suggests will require quite a balancing act. Elite athletes in big-money football and basketball programs could be forgiven for feeling less than charitable about the NCAA toeing a “clear line of demarcation” when, for those athletes, the only clear distinction they might perceive between their student-athlete lives and life in the pros is that they do not get paid for their blood, sweat, tears, and toil. The NCAA, meanwhile, is hardly a charity—it operates on revenues of almost $1 billion a year all on the backs of its college athletes.
The NCAA has a point, of course, in repeatedly reminding the public that the vast majority of college athletes do not go pro, nor do they have lucrative NIL rights to sell. One could certainly imagine rule changes that upended the economic model of college athletics without delivering any material benefit for most athletes, while causing collateral consequences that undermine the student-athlete experience.
Our two cents is that the NIL rule-making process the NCAA has promised to conduct could not reach resolution soon enough, in fact it is 80 years overdue. State legislatures will continue to pass laws that push the timeline and define the terms and parameters of the debate and the NCAA will either put up what it should have decades ago or watch as each state dismantles the NCAA model.
We also can’t resist feeling cynical about the NCAA tying itself in logical knots to explain how NIL rights do not constitute compensation. To paraphrase Warren Buffet’s famous observation about stock options, if NIL rights aren’t compensation, then what are they? If enabling an athlete to monetize his or her name, image, and likeness, all of which gain value from the athlete’s participation in a marquee college sport, is not payment for the athlete’s performance and an inducement for the athlete to come to or remain at the school, then what is it?
The notion of a divided federal Senate and House of Representatives getting together and passing legislation on such a contentious topic during an election year, and in the midst of a public health crisis, seems less remote than when California passed its own NIL law. Also, unlike the NCAA, legislators have no qualms about defining their efforts as directed at “compensating” athletes. Rather than play tricky word games, the NCAA might well benefit from dropping the pretense and engaging in meaningful debate with all deliberate speed and candor.