Name, Image and Likeness Scouting Report, Week 3: What’s Next for the NCAA?

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Throughout the history of college sports, the National Collegiate Athletic Association (NCAA) has remained the national governing and rulemaking body for collegiate athletics, with a commitment to the principle of amateurism. The basis for amateur athletics was reflected in the original NCAA Bylaws, which stated “[n]o student shall represent a College or University in any intercollegiate game or contest who is paid or receives, directly or indirectly, any money, or financial concession.” NCAA By-Laws, Art. VII, §3 (1906). The principle of amateurism and the historical opposition to compensation of any form has restricted college athletes from commercially promoting or endorsing any product or service for fear of forfeiting their athletic eligibility. While the NCAA has permitted certain limited exceptions for charitable, educational or nonprofit promotions and media activities, the commitment to amateurism has remained the cornerstone of the NCAA rules.

Like sports in general, societal attitudes toward the benefits to which college athletes should be entitled have changed over time — and recently at an accelerated pace. Today, those ongoing changes, including those exemplified by the Supreme Court’s recent Alston decision,1 have moved the NCAA to balance its long-held commitment to amateurism with the now-accepted right of college athletes to financially profit from their names, images and likenesses (NIL).

A Changing Approach to NCAA NIL Rulemaking

Facing a changing landscape with member institutions, their respective athletic conferences and state lawmakers all seeking to allow their student athletes to exercise their publicity rights for real compensation (but often in conflicting ways), the NCAA has issued an “interim” NIL policy which suspends previous NIL rules enforcement in all three NCAA member divisions.2 As a result, effective July 1, 2021, all student athletes of member institutions and high schools are permitted to participate in NIL activities consistent with the state law where their school is located without risk to their eligibility — even if their state law conflicts with the NCAA interim policy. Athletes at schools without applicable state laws remain governed only by the NCAA interim policy, which can actually be beneficial to athletes in those states. In a fundamental change, athletes are now permitted to use a “professional services provider” (including an agent) to assist with their NIL activities, although athletes are still generally prohibited from using agents to represent them in sports-related capacities.3

At the same time, however, the NCAA has retained as part of its NIL policy two important restrictions which prohibit “pay-for-play” (a restriction on compensation for athletic participation or achievement) and “impermissible inducements” (compensation tied to enrollment at a particular school). These prohibitions are especially important because the NCAA’s interim rule does not seek to define the “fair market value” of NIL compensation.

What’s Next For NCAA Rulemaking?

With an interim policy, the NCAA has arrived at halftime in the NIL contest. How long will halftime last? The NCAA has publicly stated that halftime will last until such time that either federal legislation or new NCAA rules are adopted.4

Meanwhile, the interested parties remain in their locker rooms considering possible scenarios for the second half of the NIL evolution. Among the issues being discussed are the following:

  • What will Congress do? Is a comprehensive federal approach a needed response to individual and potentially conflicting or inconsistent state laws? Will Congress take any unified action?
  • What is the future of amateurism? Will NIL compensation result in the death of college sports amateurism? Will NIL payments show that compensating college athletes does not hurt college sports in the current world? Does NIL move college athletes closer to eventually receiving “pay-for-play” from member schools or schools outside the NCAA?
  • What can be done to maintain a “competitive playing field”? Will athletes who attend schools located in major markets, divisions or schools enjoy more NIL opportunities than athletes attending schools in smaller markets? If so, how is a competitive playing field maintained when big market boosters offer greater NIL opportunities that cannot be matched in smaller market locations? Does a coveted basketball recruit consider NIL opportunities at Villanova vs. Gonzaga before signing his letter of intent?
  • Will a new organization regulate sports NIL? If Congress enacts federal legislation regulating college athletes’ names, images, and likenesses, is a federal agency needed to govern the operation of the law? When recently polled, 85% of college athletic directors questioned the ability and resources of the NCAA to be able to enforce NIL compensation rules.5 And 75% of the same NCAA member administrators were in favor of creating a third-party board that would oversee the NIL marketplace for athletes. If a “super conference” of former Power 5 schools were to be formed and leave the NCAA, would it not be apparent that a new organization — government or otherwise — be necessary to regulate NIL?

These questions and more add to the complexity and nuances of the issues facing the NCAA’s NIL initiatives going forward. For the immediate future, the NCAA, like all of us, will have to wait for future developments to unfold.

With the historical foundation set for the current collegiate NIL framework over our last three bulletins, our next series of bulletins will take a detailed look at the NCAA Interim Policy and the intersection of state laws, and then the policies of athletic conferences and member schools.

FOOTNOTES

  1. Supreme Court Decides National Collegiate Athletic Association v. Alston | Publications | Insights | Faegre Drinker Biddle & Reath LLP
  2. NCAA adopts interim name, image and likeness policy
  3. NCAA Eligibility Center: Representation or Marketing by a Professional Sports Agent
  4. NCAA adopts interim name, image and likeness policy
  5. ESPN article (June 4, 2020)

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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