Developing a NIL policy: Five foundational pillars (Part 1)

Bricker & Eckler LLP

Bricker & Eckler LLP

[co-author: Kasey Nielsen]

As the NIL landscape continues to take shape, a spotlight is beginning to narrow on the importance of institutions’ NIL policies and procedures. While NIL was on the horizon for a while before it came to campus doorsteps, the NCAA’s sudden decision to leave it to states (or its own sparse guidance) left institutions little time to go through a normal, thorough policy-making process. As a result, we have developed a series of checklists to assist institutions either in drafting a policy or procedure of its own, or cross-checking to ensure that nothing is missed. While a one-stop shop checklist would make for quick work, given the intricacies of how NIL impacts campus, we are offering these as a series in the hope that it sparks conversation at a more practical level.

Before using this checklist, please note that the intricacies of NIL all but mandate that you consult with your policy team and counsel, as our checklist may not reflect your institution’s priorities or approach to this complex issue. Additionally, while we recognize that the majority of existing state NIL laws share considerable similarities, our focus is on Ohio Executive Order 2021-10D.

  1. Identify your institution’s key NIL stakeholders.
    Good policy follows good process. Since NIL will reach far beyond your athletic department, identify those business and academic units on campus that should be involved in the drafting process. Consider identifying representatives from athletics, financial aid, international student offices, student conduct, intellectual property and facilities management. The earlier stakeholders are brought into the process, the greater the buy-in and smoother the implementation. We are already seeing a number of policies that are being tested because the right people weren’t brought in early enough and a scramble ensues.
  2. Start with your state’s NIL law or executive order.
    Ohio’s executive order contains a rather pithy recitation of an institution’s obligations with respect to permitting an athlete to monetize their NIL. However, packed into its 10 or so substantive paragraphs are a number of lofty considerations that an institution must explore before it reduces its position to writing. If your team is already assembled, now is the time to ask your stakeholders to review your applicable NIL law and evaluate how it can be operationalized across campus.

    For example, Ohio’s NIL executive order allows (but does not require) colleges and universities to prohibit athletes from using their institution’s marks and logos. We will explore intellectual property-related issues in a later checklist, but consider here how your institution approaches its IP portfolio and how it would like to do so with its athletes. Remember, institutions must balance the importance of protecting its brand with its athletes’ right to capitalize on their NIL.

  3. Review your athletic association’s NIL policy.
    Beyond the specifics of your state’s NIL law, it is critical to review where your athletic association falls on NIL and NIL-related issues. Despite NIL’s impact, a number of principles of amateurism remain: pay-for-play is prohibited, as is using NIL as a recruiting inducement.

    The NCAA currently has an Interim NIL Policy and other resources, including an Interim NIL Policy Question and Answer document. The National Junior College Athletic Association (NJCAA) issued a new bylaw to inform its member schools of the association’s expectations. Colleges and universities should also consult their respective athletic conferences for additional guidance.

  4. Identify any policy or procedure already in place that may be impacted by NIL.
    Returning to the internal team that you formed, it is critical that institutions understand where NIL policies and procedures will intersect with already existing policies and procedures. In the short time since NIL rights have been in place, we are noticing that many institutions that were quick to draft a NIL policy are now beginning to see the gaps that were created by haste.

    For instance, Ohio’s NIL executive order states that athletes intending to enter into a NIL deal must first disclose the proposed contract to the institution “for review.” What happens if an athlete fails to do so? Or, if an athlete discloses but signs before your review is complete? Does your existing disciplinary framework – within the team, the department or the institution – capture such activity? If so, what process must follow?

    It’s far easier to manage changes proactively, even if there is a process by which formal policy change must occur, rather than reactively when incongruities are flagged in the midst of decision making.

  5. Consider developing a NIL-related education program on campus.
    Ohio’s NIL executive order does not contain a specific training requirement for any of those that will undoubtedly be impacted by the NIL process. Nevertheless, the educational component may well be more important than the policy itself. Campus-based education programs, whether done in-house or with a third-party, should be customized for all who may come into the NIL orbit. For athletes, the education should focus on brand building, financial responsibility and contracting basics. For athletic department staff, the education should focus on the particulars of the institution’s policy, drawing sharp lines around permissible and impermissible conduct.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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