State of SC has a new NIL law. What it means for USC, Clemson, other colleges

A bill intended to put Clemson, South Carolina and other colleges across the state on a “level playing field” with their competitors when it comes to assisting athletes with name, image and likeness deals is now law.

Gov. Henry McMaster signed H. 4957 on Tuesday after it was approved by state lawmakers earlier this year.

The bill, introduced in January in the state House, had widespread bipartisan support and even drew Clemson football coach Dabo Swinney, USC football coach Shane Beamer and both schools’ athletic directors to the state capitol to promote the legislation in February to a House panel.

The bill was widely viewed as a game-changer for schools in South Carolina when it comes to NIL, which has quickly emerged as a critical part of roster construction and championship contention in every college sport — especially in revenue-driving sports such as football, basketball and baseball.

But what does the law actually do, and how will it help the Tigers, the Gamecocks, Coastal Carolina and other colleges across South Carolina?

The State caught up with state Rep. Seth Rose, D-Richland, one of the co-sponsors of the legislation, for a breakdown.

What was the problem?

The NCAA — which for decades had insisted its athletes were “amateurs” who couldn’t financially benefit off their name, image and likeness — reversed course three years ago. Facing lawsuits, it cleared the way for athletes to make money through NIL deals starting in summer 2021.

Heading into that summer, Rose said, South Carolina legislators were eager to help name, image and likeness run smoothly in the state. Anticipating “very strict, very stringent restrictions” from the NCAA, they passed a law, S. 685, intended to streamline and assist NIL deals.

It ended up doing the opposite.

“It turns out, the NCAA basically did nothing and created the wild wild west,” Rose said. “Therefore, we had a state law on the books that was restricting colleges and universities in this state, in ways that other universities and colleges in other states were not being restricted, because of the NCAA’s failure to act.”

South Carolina’s previous law banned institutions from “directly or indirectly” creating or facilitating NIL opportunities for athletes — a far stricter standard than that of the NCAA, which offered minimal guidance or guardrails for schools.

After gathering input from schools, state legislators suspended the NIL law one year later through a proviso attached to the annual state budget. That suspension, effective July 2022, “alleviated the immediate problem,” Rose said.

But the state still needed a permanent fix.

What does the new law change?

In simplest terms, Clemson, South Carolina and other schools can now engage more directly with their athletes in the field of name, image and likeness without any confusion about whether or not their actions adhere to state law.

The new law is intentionally broad in its language but says that schools may “identify, create, solicit, facilitate and otherwise enable opportunities for a currently enrolled intercollegiate athlete to earn compensation” for the use of their name, image and likeness. Schools can do that “directly,” the law reads, or “through an agreement with a third party.”

School involvement, Rose emphasized, is 100% voluntary. No athlete competing in South Carolina is required to loop in their school on the inner workings of their NIL deals. But Clemson, USC and other colleges can now offer their expertise and resources to athletes in ways they never have before.

A school, for instance, could have one of its in-house lawyers review an NIL contract before an athlete signs it to make sure it’s fair. Or easily grant permission for an athlete to use its trademarks and/or facilities for an NIL deal (think a branded T-shirt with a school logo). Or reach out on behalf of athletes and leverage connections to facilitate potential deals.

“It empowers the student-athlete by empowering the institution to help them, to provide assistance and to provide services,” Rose said.

How does the law help schools?

The legal oversight provided to schools under the new law is critical, Rose said. He’s a former college athlete himself — an All-American tennis player at South Carolina — and recognizes how parents are “entrusting the well-being of their child with an institution” during the recruitment process.

Swinney, Beamer and other Clemson and USC representatives emphasized during their February visit to the State House how the new law would help them protect athletes from “bad actors” and agents who could trick young adults into unfair yet legally binding contracts.

Outside of that oversight, though, the new law is also a recruiting tool. By clearing the way for Clemson and South Carolina to further assist in NIL deals, this legislation puts the schools on a more level playing field with rival schools in other states — especially other states home to SEC schools, which USC competes against annually in the nation’s top football conference.

A stronger, clearer and more smoothly run name, image and likeness operation leads to better NIL deals and a better overall product — perks the Clemson and South Carolina football teams could pitch to prospective recruits in the same way they’ll pitch playing time, NFL development, facilities and academics.

The same thinking, of course, applies to any sport at any South Carolina college. USC women’s basketball coach Dawn Staley was another key figure in the creation of the law, and school representatives strongly emphasized the importance of NIL for smaller, non-revenue sports.

“This was everyone at the major institutions in our state holding hands, so to speak, asking for this fix,” Rose said.

What else is in the law?

The state’s new law allows schools to play a significant role in facilitating NIL deals. But they are explicitly banned from directly compensating their athletes.

All name, image and likeness compensation must come from third parties, which naturally includes university-approved NIL collectives such as the Garnet Trust at USC and Clemson’s 110 Society (who are increasingly operating more and more in conjunction with their respective schools).

One section gives schools the power to “prohibit” an athlete from making an NIL deal if the proposed use conflicts with a school’s “institutional values.” Another section directly bans athletes from earning NIL money for the endorsement of “tobacco, alcohol, illegal substances or activities, banned athletic substances or gambling,” which includes sports betting.

There’s also a stipulation that even if a university “collects, retains or maintains copies or summaries” of athletes’ NIL contracts with third parties, those documents are not obtainable under the state’s Freedom of Information Act unless the school itself is a party in the contract.

“Normally if a university or a public institution touches anything, it becomes FOIA-able,” Rose said. “But recognizing that it’s a private contract, and that the institution’s just assisting the student athlete, there is a provision that makes it exempt from FOIA.”

In all, Rose said, this new law is not a direct endorsement of the NCAA’s name, image and likeness policy by South Carolina or its state legislators.

“It’s more that the cat’s out of the bag and schools and universities within our state should be playing by the same rules as everyone else,” he said.