School is starting. That means new textbooks, new clothes — and maybe some new name, image and likeness deals for college and high school athletes eager to make some cash.
Whether it’s social media posts, personal appearances, organizing sports camps (or even fishing tournaments), the ability to earn money is still relatively new for athletes. Here’s what you need to know as the era of athlete compensation heads into its second full sports season.
WHAT IMPACTS COLLEGE SPORTS?
To hear coaches tell it, NIL deals have either helped bring them the players they’ve been looking for or it’s just another level of competition to get the most elite athletes. Recall the matchup in May between Nick Saban, the coach of perennial national title contender Alabama, and rival Jimbo Fisher at Texas A&M — with Saban attacking criticism of HBCU standout Jackson State and its celebrity coach, Deion Sanders.
Many athletes have become entrepreneurs, and some have agents. The NIL has also allowed athletes to enter the transfer portal looking not only for another team but also for a better shot at more money from companies, brands or through the many collectives that are sprouting up everywhere from the start of July 2021. NIL era.
FILE – Alabama coach Nick Saban, left, yells on the sideline during the first half of the NCAA college football game at Alabama, Saturday, April 16, 2022, in Tuscaloosa, Ala. Texas A&M coach Jimbo Fisher, right, reacts to an official’s call during the second half of the team’s NCAA college football game against Mississippi, Saturday, Nov. 13, 2021, in Oxford, Miss. To hear the coaches tell it, the NIL deals either helped bring them the players they were looking for or it’s just another level of competition to bring in the most elite athletes. (Photo/AP File)
Photo: ASSOCIATED PRESS
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WHY DID HE CHOOSE THAT?
The NIL’s burgeoning began with a seed: a 2009 lawsuit filed by former UCLA basketball player Ed O’Bannon that argued the NCAA shouldn’t be allowed to use the likeness of male football and basketball players — past and present – to earn money. O’Bannon won on the antitrust component.
In June 2021, the U.S. Supreme Court said schools cannot limit education-related benefits for athletes, effectively striking down NCAA rules that prevented students from being paid or financially supported beyond full scholarships.
Awaiting the ruling, California led the U.S. in passing a NIL bill in 2019, forcing the NCAA to open the way on July 1, 2021, for athletes to earn money to pass and starting a rush from other states.
WHAT ARE NIL BIDS?
Social media posts are the top activity for which athletes are paid, followed by licensing rights, autographs/appearances, and camps or lessons. Money comes from brands, fans and donors. In many states, athletes are not allowed to endorse alcoholic beverages, tobacco or sports betting.
WHO RULES THE NO DALES?
This is a state by state situation, and while the laws are largely the same, there are variations.
Many states allow a third party to connect businesses with athletes for NIL arrangements.
In Georgia, schools can ask athletes to pool up to 75% of their NIL money to share with other athletes, but it’s not a requirement. In Connecticut, athletes can use their school’s logo if the school agrees. And the NIL contracts that Louisiana athletes report to their universities are considered confidential.
Some states, including Indiana, Kansas, Minnesota, New Hampshire, North Dakota, and South Dakota, have no NIL laws for college athletes. In those cases, college athletes must adhere to the NCAA’s interim guidelines and policy. The NCAA says schools cannot engage in “pay-to-play” nor violate recruiting laws, meaning athletes cannot receive NIL money to play for a school or for their athletic performance.
The NCAA does not oversee compliance with the reporting of NIL agreements or compliance with state laws. This is either at the school or at the athlete, depending on the rules in that state. But the NCAA recently required member schools to assist in any investigation into potential violations.
WHY IS THERE NO NATIONAL NIL LAW?
It’s not for lack of trying. The NCAA and some Power Five conference executives have called for federal legislation. Two members of the U.S. Senate — Republican Tommy Tuberville, the former Auburn coach, and Democrat Joe Manchin — are drafting a bill and want to hear from the SEC commissioner and others on how to change the NIL laws. But there has been no actual movement in Washington.
Some states have “right of publicity” laws, which allow an individual to decide whether their name or likeness can be used for commercial gain. There is no such federal law.
The NCAA itself could establish a national NIL policy for its three divisions, though the organization has pushed for federal legislation instead.
WHO BENEFITS FROM NIL?
Male athletes lead the way in NIL activities – 62.7% versus 37.3% for women, according to the NIL platform Opendorse. Men’s football and basketball players received the highest percentage of offers when looking at the full list of college sports (from data reported by Opendorse and other NIL INFLCR and Athliance platforms).
Some women’s sports tend to follow these two, especially basketball, volleyball, softball, and gymnastics.
The money is primarily focused on Division I athletics, although DII, DIII and NAIA players have been able to get deals.
The more convenient the sport, the less likely it is to produce successful deals; think tennis, field hockey, ice hockey and rowing. But there are exceptions, as water skiing and rifles see average deals of around $1,400 and $6,000, respectively.
CAN LAME SCHOOL ATHLETES UNITE ON THE GOLDEN SHORT?
It depends on where they live. More than a dozen states are OK with high school students making NIL deals, and others have considered it.
WHAT’S NEXT FOR NIL?
More money and maybe more fixes.
Opendorse projects NIL deals worth $1.14 billion in 2022-23, with Power Five conference schools having the bulk of that and, by region, the Southeast. The collegiates will play a major role in the growth of the NIL as they seek to organize and raise funds for the athletes of specific schools. Look for states with NIL laws to add laws – and for states with laws to continue to intervene.
The NCAA also faces another lawsuit, currently in the 3rd U.S. Circuit Court of Appeals, that argues that athletes should be recognized as employees of their schools.
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