Key Takeaways

• The NCAA adopted four proposals aimed at addressing student-athlete protections in name, image, and likeness (“NIL”) deals, including the voluntary registration of service providers, required NIL agreement disclosures, the introduction of standardized contracts and the development of comprehensive NIL education.
• The adopted proposals will become effective August 1.
• The NCAA introduced new proposals aimed at providing guidelines and guardrails for school involvement in NIL agreements.
• The new proposals could be adopted as early as April, depending on member feedback.

This month, the NCAA Division I Council approved a proposal to address student-athlete protections related to name, image and likeness (NIL) deals. The proposal will become effective August 1.

The adopted protections include:

• Voluntary Registration: The adopted proposal establishes a plan to develop a voluntary registration for certain NIL service providers, including agents and financial advisers, to serve as a directory for student-athletes. The NCAA plans to finalize and monitor the directory via committee to ensure that the directory sufficiently meets the needs of student-athletes.
• Disclosure Requirements: The adopted proposal requires student-athletes to disclose the details of NIL agreements exceeding $600 in value no later than 30 days after entering into or signing an NIL agreement. Information that is required to be disclosed includes the contact information for parties involved, the terms of the arrangement and the applicable compensation. Twice a year, schools will be required to de-identify this information and provide it to the NCAA so that it may develop an “aggregate database” student-athletes can use to understand trends in NIL agreements and schools and administrators to use to make informed decisions related to NIL policy.[1]
• Standardized Contracts: The adopted proposal identifies a plan to work with schools to educate student-athletes on contractual obligations and to develop a standardized contract with recommended contract terms.
• Comprehensive NIL Education: Finally, the adopted proposal sets up the development of a comprehensive plan to provide ongoing educational resources to support student-athletes and other key stakeholders on policies and best practices pertaining to NIL agreements.

The council also introduced a new proposal that relates to school involvement in NIL activities. The proposal creates a framework for this involvement in four key ways. First, the proposal would remove national restrictions regarding the level of support provided by schools and their third-party providers, meaning that under the new proposal, schools could help identify potential NIL opportunities and facilitate these deals. Second, the proposal defines an NIL entity as “an individual, group of individuals, or any other entity (for example, a collective) organized to support the athletics interest of an NCAA school or group of schools by compensating student-athletes for NIL activities on behalf of itself or another third party.”[2] Third, the proposal eliminates regulations governing certain communications between schools and NIL entities regarding enrolled student-athletes. Finally, the proposal prohibits any NIL entity from engaging in any communication with (or providing any benefits to) a prospect or potential transfer until that prospect or potential transfer “signs a letter of intent, participates in summer activities[,] practices with the team, or enrolls at the school and attends classes.” According to a statement from the NCAA,[3] the proposal “should better support student-athlete decision-making and stabilize some of the current challenges associated with NIL activities.”

The proposal could be adopted as early as April and has the potential to pave the way for new opportunities as well as obstacles for athletes, administrators and advertisers.

[1] Press Release, NCAA, Division I Council Approves NIL Disclosure and Transparency Rules (Jan. 10, 2024), available at https://www.ncaa.org/news/2024/1/10/media-center-division-i-council-approves-nil-disclosure-and-transparency-rules.aspx.

[2] Id.

[3] Id.

[View source.]