College athletes in Georgia are now allowed to collect endorsements and sponsorships. And their schools can take a significant cut of that money if they want.
Georgia Gov. Brian Kemp (R) signed the state's new bill regulating athletes' name, image and likeness rights on Thursday. Kemp held his signing ceremony at the University of Georgia with a Bulldog backdrop in the athletic department's recruiting lounge. The symbolism was meant to be obvious for a law ostensibly designed to let athletes profit off their own image rights starting on July 1.
— Steve Gehlbach (@SteveGWSB) May 6, 2021
But there's a provision in the law that allows colleges to have significant control over athletes' endorsement money.
The bill that Kemp signed into law allows schools across the state to take up to 75% of an athlete's endorsement income. That cut would be deposited into a pool for all athletes at the school and then redistributed upon athletes' graduation.
Anyone else read the Georgia #NIL bill? GA schools can require athletes to contribute up to 74.99% of their NIL earnings to a fund for all athletes to be dolled out at graduation/withdrawal from school. SCHOOLS should set up such a fund with proceeds from their $million contracts pic.twitter.com/Sbzw1uzadK
— Maddie Salamone (@madsal15) May 5, 2021
How would that provision work? If the University of Georgia decided to implement the provision and take 70% of each athlete's endorsement to redistribute, a player like J.T. Daniels would only make $30,000 on a $100,000 endorsement agreement.
How many schools will actually redistribute athletes' money?
The provision in the bill is restrictive and gives schools the right to have far too much control over an athlete's money. But it's fair to wonder just how many schools across the state will decide to exercise their rights to pool players' money.
A school like Georgia or Georgia Tech exercising its right to take a cut of endorsement money will immediately prove to be a disadvantage in recruiting. Schools in other states recruiting the same football and basketball players can simply tell an athlete that he or she will be able to keep all of their endorsement money. And that's a pretty persuasive argument.
You can bet a coach like Georgia's Kirby Smart won't want to be putting himself at an immediate disadvantage.
Federal NIL law still in the works
Georgia is now one of many states that have moved ahead with a law allowing college athletes to get endorsements in contrast with longstanding NCAA rules. The NCAA has asked the federal government to provide a nationwide framework for athlete endorsements though no federal law governing athletes' image rights is imminent.
The NCAA wants a federal law in lieu of myriad state laws that it would have to navigate. But those state laws have popped up because of the NCAA's continued procrastination regarding athlete endorsements. While the NCAA has said that it wants to modernize its current rules, it hasn't offered much in the way of specifics and it delayed a January vote on NIL changes.
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