New lines off the field: Further NCAA guidance on Name, Image, and Likeness
As the confetti falls on the 2022 NCAA college football season and the sports world looks forward to 2023, universities and student-athletes must look to evolving NCAA guidelines to stay within bounds.
The NCAA Division I Board unanimously approved new guidance on how NCAA member institutions can and cannot be involved in NIL activities under the NCAA’s interim policy. These clarifying guidelines, released in late October 2022, address Division I universities’ interactions with the NIL activities of their currently enrolled student-athletes, as well as with collectives and other NIL entities. Broadly, the guidelines allow institutions to help facilitate student-athletes’ NIL opportunities while restricting them from directly participating in them. The guidance also contains a change to the standards for assessing NIL policy violations that may lead to enforcement actions by the NCAA.
Under the new guidelines, a member school can connect student-athletes and donors with NIL entities but cannot directly participate in NIL activity itself. For example, institutions can introduce student-athletes to representatives of NIL entities and provide space on campus for NIL entities and student-athletes to meet. They can also facilitate meetings between donors and NIL entities and may even request that donors provide funds to the NIL entity (without directing those funds to a specific sport or student-athlete). A member school can also share stock photos, stored videos and graphics with a student-athlete or an NIL entity. Further, they may provide services or equipment, like tax advice or graphics software, to support NIL activities, but only if those services or equipment are also generally available to the larger student population.
Beyond those limited areas, a member school cannot engage with student-athlete NIL activities, which instead are frequently handled by an NIL entity. Institutions are permitted to engage NIL entities, such as marketplaces or collectives, that match student-athletes with NIL opportunities independent of the member school. Those entities can solicit funds from donors and help student-athletes ensure they complete their NIL responsibilities.
NIL entities must be independent of member schools to prevent universities’ direct involvement in NIL activity. This means that no individual can be employed by both the member school’s athletic department and an NIL entity, and athletic department staff cannot represent student-athletes in negotiating NIL deals. An institution cannot communicate with an NIL entity regarding a student-athlete’s compensation request, nor can it request that a donor direct funds through the NIL entity to a certain sport or student-athlete. Likewise, the member school may not donate cash to an NIL entity and it cannot provide assets to a donor (e.g., tickets, stadium suite) to incentivize funding an NIL entity. Member schools also cannot help a student-athlete with their NIL activity, even to ensure they are following through with their contract, unless the same benefit is generally available to other students. Furthermore, member schools and their conferences may not share their broadcast revenue with student-athletes. Finally, do not look for NIL merchandise at the campus bookstore: member schools are banned from entering into a contract with a student-athlete for the sale of products related to the student-athlete’s NIL.
New Standards for Violations
In addition to the new guidelines, the Division I Board also unanimously adopted new allegation and conclusion standards for violations of NIL policy. For conduct that takes place prior to the enactment of these new guidelines, the NCAA’s enforcement staff may only pursue those cases that are “clearly contrary” to the interim policy, such as “pay for play” or other improper inducements to recruits. Moving forward, however, when “information available to the enforcement staff indicates impermissible conduct,” they and the Committee on Infractions will presume a violation has occurred unless the member school clearly demonstrates the activity at issue was in line with NCAA rules and the interim policy. This change in posture strongly suggests that the era of the NCAA’s non-enforcement of its interim NIL policy may be ending.
There have to date been no enforcement actions against any member schools or student-athletes for violations of the NCAA’s NIL policy. One reason for that caution: Justice Kavanaugh’s concurring opinion in NCAA v. Alston, 141 S. Ct. 2141 (2021) (see our previous post here), which underscored the possibility that it is more than just the NCAA’s limits on student-athlete’s education-related benefits that violate antitrust laws, but also the NCAA’s other compensation rules, potentially including NIL policy. In doing so, the Alston decision may have written a guide for antitrust challenges to any NCAA enforcement actions that attempt to limit student-athletes’ ability to profit from their NIL rights.
With the adoption of these new standards, a showdown between the NCAA and its antitrust critics may well be on the horizon in 2023. Until that or other federal action occurs, the NIL landscape will continue to evolve quickly and most likely unexpectedly. And with increasing NCAA guidance, a robust compliance framework is more critical than ever, since history suggests that enforcement actions are likely to follow.