Name, Image and Likeness: A Guide to College Athlete NIL Deals, Compensation

It wasn’t very long ago that any sort of compensation for college athletes was strictly prohibited—as it was for decades—by the restraints of amateurism. That’s why athletes weren’t allowed to monetize their name, image and likeness. But in July 2021, that changed when the NCAA took a hands-off approach and implemented surprisingly loose guidelines in its interim policy.

The practices and players involved in NIL, though, have changed since its introduction. As the market continues to evolve, Sportico answers key questions about this era of college athletics.

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1. What is NIL? The NCAA Rule, explained.

College athletes from all sports and backgrounds are now licensing their NIL for use in commercial products—such as sneakers, apparel, trading cards and potentially video games—endorsing brands on social media as influencers or doing promotional public appearances, signing autographs, sponsoring camps and clinics, or even selling their own merchandise.

2. What is the current NIL situation for college athletes?

Athletes have now been profiting off their name, image and likeness or earning payment from a third party for use of their NIL since July 2021. There are college athletes who have earned as much as seven figures through NIL, though most have earned or are earning smaller sums. It’s worth noting that not all NIL deals have been tied to an athlete’s sport. Many have used the new freedom to monetize other passions or capitalize on social followings unrelated or not wholly attributable to their NCAA careers, which was not previously allowed.

3. Ed O’Bannon won his case against the NCAA several years ago, so why couldn’t college athletes profit from NIL before 2021?

Short answer: The remedy didn’t lead to that outcome. Long answer: The former UCLA basketball player’s class action lawsuit—which went to trial in 2014—ruled that the NCAA and its members unlawfully conspired under federal antitrust law to misappropriate players’ NIL in licensing contracts for video games, player jerseys, classic broadcasts and other products. To remedy this harm, Judge Claudia Wilken ordered the NCAA to allow schools to pay men’s basketball and football players up to $5,000 per year in deferred compensation. The U.S. Court of Appeals for the Ninth Circuit agreed on the law but revised the remedy. It instructed the NCAA to permit schools to provide the full cost of attendance, which incorporates cost of living and usually ranges between $3,000 and $6,000. The NCAA had already taken that step in the aftermath of O’Bannon filing his lawsuit.

4. What did the NCAA argue in court to justify denying NIL opportunities to players for so long?

The NCAA has championed four key arguments against NIL and, more broadly, in defense of amateurism in college sports.

Amateurism drives consumer demand for college sports. Under this logic, paying college athletes, including for NIL, would repel fans. This argument has failed in recent litigation, including in O’Bannon and most notably in the Supreme Court’s 2021 ruling in NCAA v. Alston which concerned payments to athletes for education-related expenses. Survey data doesn’t establish that consumers would become less interested in college sports if players are paid, particularly for their NIL. Judges have also observed that fans love college sports mainly because of college spirit and affinity for alma mater or region. Since NIL’s adoption in 2021, fan interest has remained high, if not increased.

The prohibition on athlete compensation promotes competitive balance in college sports. This line of reasoning has flopped as well. Generally, the same top programs remain top programs, year after year. Also, schools spend vastly different—and uncapped—amounts on coaches’ salaries, stadiums and training facilities. As argued in court, if the NCAA genuinely believed that restricting pay would promote competitive balance, schools would be restricted in other types of spending. NIL has not meaningfully altered competitive balance.

Preventing athlete pay helps to integrate academic and athletic goals and thus promotes education. Judges have acknowledged education is a worthy goal but have stressed that other, non-compensation NCAA rules already advance it. For instance, the NCAA limits the number of weekly hours athletes can spend on athletics and mandates these athletes attend class.

Schools join DI because of restraints on athlete compensation and might leave DI—and take away opportunities for athletes—if those restraints were lifted. This argument has also been largely debunked. As courts have noted, DI schools have advocated that they gain greater, not less, ability to compensate athletes. Also, DII and DIII use the same basic restraints, so schools wouldn’t have joined DI on account of restraints that other divisions also use.

5. What is the NCAA’s latest position on NIL?

The NCAA has updated its guidelines, initially adopted on June 30, 2021, to clarify things including booster and third-party involvement, the roles of collectives and “how the current rules relate to Division I member schools’ involvement in NIL activities.”

The policy essentially allows athletes to do NIL deals consistent with the law of the state where their schools are located. Though it’s worth noting that some states, such as Alabama, have repealed or loosened the restrictions in their laws since NIL went into effect.

The NCAA also allows athletes who attend a school in a state without an NIL law to engage in NIL activities without violating NCAA rules and greenlights hiring agents or professional services providers in the process. The guidelines also say athletes should report NIL deals to their schools, but that’s ultimately up to their state, school or conference rules.

The update clarified that school personnel, including coaches or administrators, can assist an “NIL entity” with fundraising or direct donors toward those collectives, though they can’t donate directly to or be employed/invested in those NIL promoters.

At the end of the day, this is still an “interim” policy that will stand until the Congress passes federal NIL legislation or the NCAA adopts permanent NIL rules.

6. Speaking of Congress, there have been several national NIL-related bills put forth by lawmakers. Will any of them become law?

The outlook for Congressional action on NIL is unfavorable. The NCAA seeks a national, uniform NIL standard that would preempt application of varying NIL statutes in each state. It also wants a declaration that college athletes are not employees and an exemption from antitrust scrutiny. An antitrust exemption would mollify NCAA worries that enforcement of NIL restrictions would generate an antitrust problem—namely, the NCAA and its member schools (which are competing businesses) joining hands to limit competition in the NIL market and price-fix what athletes can earn.

No NIL-related bill introduced in Congress has advanced out of committee, let alone received a vote. While some members of Congress are open to a federal NIL standard, there is less support for an antitrust exemption or a declaration that college athletes are not employees.

Also, some members of Congress are only willing to pass a NIL-related statute if it contains additional and more controversial reforms, such as recognition of college athletes as employees who can form unions and requirements that colleges share revenue with athletes and guarantee them health care beyond college. There are also reasons to believe that any federal college sports law would present unintended conflicts with state laws, particularly states’ rights of publicity.

7. Why is Congress unlikely to extend the NCAA an antitrust exemption?

There are several reasons. First, antitrust law permits reasonable restrictions—if the NCAA and its members devise reasonable NIL restrictions, they ought not to worry. If the NCAA and its members can only design unreasonable NIL restrictions, then it’s not clear why they should be granted an exemption. Second, antitrust claims are difficult to win, unless the defendant is clearly engaged in anticompetitive conduct. Most antitrust lawsuits fail. Third, antitrust exemptions are unpopular these days with both Republicans and Democrats. Both parties have placed pressure on Major League Baseball to justify its exemption and warned they could seek to rescind it.

8. Do any state NIL statutes conflict with the NCAA or a potential federal law?

The NCAA had the opportunity to seek restraining orders that could have blocked the adoption of state NIL statutes before they went into effect on July 1, 2021. The NCAA could have insisted those statutes unreasonably interfere with interstate commerce. States are generally forbidden from enacting statutes that unduly impact the economies of other states. The NCAA could have argued that a state statute which imposes a different set of NIL rules for schools and athletes than those prescribed by national NCAA rules would lead to conflict and disruption within the college sports industry.

In NCAA v. Miller, the NCAA successfully invoked an interstate commerce argument in defeating requirements adopted by the state of Nevada for athletic disciplinary hearings. Those requirements conflicted with NCAA rules. But the NCAA declined this strategy, most likely because it would have to “run the table” and secure restraining orders in every state with an NIL statute.

As to conflict with a possible federal NIL statute, the language of a state statute would be key. The NCAA would prefer preemption be part of any federal NIL law. The power of the federal government to preempt states, however, is a complicated legal topic—as seen in the multiyear effort to overturn a federal ban on state sports betting—and could attract litigation.

9. Doesn’t NIL mostly benefit football and men’s basketball players and big stars—what about women or Olympic sport athletes?

Football and men’s basketball players have cashed in big time—they’re on TV more and there are billion-dollar economies around both sports, which give those athletes more exposure and typically result in bigger followings. But they haven’t been the only ones to capitalize. While it’s safe to say male college athletes are doing the most NIL deals by volume, some of the biggest NIL earners are in women’s or Olympic sports, according to information published by several NIL facilitators.

The upside of NIL is that any athlete with a significant social following, regardless of whether that is connected to their performance or popularity in their sport, has a chance to capitalize. For example, twins Haley and Hanna Cavinder, who now play basketball at Miami, have reportedly earned millions from NIL—much of which they banked while playing for Fresno State as underclassmen during the first year of NIL. LSU gymnast Olivia Dunne capitalized on her huge social following (more than 7 million followers on TikTok and almost 4 million more on Instagram, as of early 2023) as an influencer.

It is worth noting that most NIL dollars have gone toward Division I athletes, though deals at the Division II and even Division III level have happened.

10. How many college athletes are using their NIL as influencers?

Many—Dunne is certainly not the only influencer to monetize her following in the early NIL era. Given the prevalence of social media and the popularity of many athletes on various platforms, influencing has been one of the most common and lucrative opportunities for athletes, including many who have significant social followings that are largely unrelated to their athletic pursuits. Athletes use their platforms to announce various partnerships and, as they can and often do, to promote brands or products online, with some even earning commissions on sales.

11. How does on-field performance play into NIL deals?

NIL contracts are not allowed to connect compensation to on-field or sport performance. That provides some security for athletes but also creates risk for brand partners. Former Oklahoma quarterback Spencer Rattler was one of the earliest examples of this. The Sooners’ QB1 entered the 2021 football season as a Heisman Trophy favorite and inked six-figures worth of endorsement deals in the earliest months of NIL. But within a few weeks of the season opener, he’d lost his starting slot to true freshman Caleb Williams. While he sat on the bench, his checks continued to roll in. (Rattler eventually transferred to South Carolina and added fresh NIL partners to his portfolio in Columbia.)

12. When college athletes sign endorsement deals now, does that make them employees?

No, the school isn’t paying the athletes. The payer is a third party, such as a sneaker company, car dealership or summer camp. The athlete also does not become an employee of those endorsed companies. Endorsement deals are normally structured so that the endorser is an independent contractor, not an employee. Some collectives, however, which are technically third-party entities not directly linked to an athletic department, have put star athletes on what many argue amounts to payroll, blurring those lines a bit. (See Question 16 for more on collectives.)

That said, college athletes might gain recognition as employees through the courts, including via Johnson v. NCAA, or the National Labor Relations Board. In an interview with Sportico, New NCAA president Charlie Baker suggested that he is open to the possibility of redefining opportunities for college athletes in major programs to gain compensation.

13. Will college athletes be able to create a union or association to sign group licensing deals?

Unless and until college athletes establish under the law that they are employees of their schools, they can’t unionize under labor law. Only employees can unionize (and only certain employees can do so, depending on whether they are employed at private universities or at public universities and in the case of the latter, whether they work in a state that permits public university employee unions).

So far, the NCAA has been resistant to an alternative vehicle for college athletes to join hands: group licensing. Athletes could form a trade association along the lines discussed a few years ago by then-Clemson quarterback Trevor Lawrence and other star players. Trade associations can function in some ways as a union but don’t require employee recognition. A trade association could license college players’ likenesses for inclusion in video games.

14. Do college athletes sell directly to consumers, or do most use agents to do endorsement deals with a business?

Both. There is certainly a segment of athletes selling products, services or experiences directly to consumers, whether through social or other digital platforms, and negotiating deals with brands on their own or through many of the available athlete marketplaces. But several have also signed with agents or representatives to provide professional assistance for more complex deals. Big name agencies have even gotten involved in that side of the business.

15. Can college athletes sign endorsement deals that conflict with those of their school?

The initial thought was no—since this is up to the schools, it was widely expected that they wouldn’t allow such arrangements. Most state legislation gave universities discretionary rights to prohibit partnerships that conflict with their own commercial deals. For the first 18 months of NIL, athletes largely sidestepped the school-wide sponsorship deals that were in place at the athletic department level. But that’s changing. Basketball player Flau’jae Johnson, for example, signed a six-figure deal with Puma, despite playing at LSU, a Nike school.

LSU athletes must wear Nike for practices and games, which Johnson still does. She promotes Puma on her social media feed and when she’s not playing for LSU, showing that such a partnership is still possible despite school conflicts.

16. How are NIL deals disclosed?

Theoretically, athletes are responsible for disclosing any NIL deals to their schools. Some states, like Texas, also require disclosure of NIL contracts and values. But there’s no national tracking system or database where those deals are aggregated or made public, though some have tried to set up an overarching tracking system. Without a national or NCAA mandate, participation is voluntary. As a result, there’s a lot of uncertainty about how much college athletes are being paid, and by whom. NIL data is therefore both limited and fragmented.

That makes it hard to assess the landscape on a broader scale. Some coaches have thrown out numbers about how much their team has collectively earned or what individual players have made through NIL, but there’s no way to readily fact check any of what’s said—not even for a recruit. New NCAA president Charlie Baker, who took the helm from Mark Emmert on March 1, 2023, said one of his early priorities is to try to clean up the “incredibly opaque” NIL market.

Compliance officers are likely shouldering the bulk of the internal reporting and disclosure duties, though some athletic departments have started to appoint or hire NIL specific staff members to support their athletes in NIL endeavors. The same is true surrounding questions about whether a potential endorsement deal pays the athlete above market or is disguising pay-for-play.

17. How has NIL mutated?

To put it simply, NIL has rapidly changed from what many envisioned—athletes monetizing their commercial appeal and platforms—into territory closer to what many feared NIL would become. The second side of NIL is where the booster-funded collectives come into play and concerns about recruiting inducements and pay-for-play arise. Collectives are now offering deals to recruits and transfers while also putting a school’s top athletes on payroll, presumably to keep them from thinking about leaving or exploring other options.

Recently, the NCAA settled with the University of Miami over recruiting violations reportedly involving the Cavinders and billionaire Miami alumnus John Ruiz.

18. What exactly is a collective? Are they going away?

Collectives are one of the newer parts of NIL, but they took a fast and commanding hold across the country. In some cases, several collectives have popped up to support a single university.

A collective is a third-party entity that pools money from boosters to create NIL opportunities for athletes that their school cannot organize itself, typically while asking for little in return. Already, collectives at athletic departments across the country have raised millions of dollars in booster money to pay college athletes under the guise of NIL.

Though they are not operated by universities or athletic departments, some collectives have a close working relationship with their schools, while others still operate in opposition. They are technically prohibited from making any offers that could count as pay-to-play or unauthorized recruiting inducements, but there have already been reports about recruits being promised thousands, and sometimes even millions, from collectives and athletes rescinding commitments after deals offered by collectives fell through or failed to come to fruition. Most of the athletes on collective’s payrolls are among a school’s biggest stars, which some see as an incentive to stay.

Collectives likely aren’t going away, but not all will survive. Some have struggled to find or maintain momentum, while others have already shut down altogether (which is what happened with BLVD, a University of Southern California collective, which reportedly shut down in early 2023, less than a year after it launched).

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