NIL After Year 1: Is the NCAA Still in Control of Collegiate Athletics?
By: Ryan Willen, Law Clerk, and Jim Juliano, Member
Has the NCAA lost control of student-athletes and college athletics? Has the coming of NIL compensation marked the end of amateur athletics as we know it?
Largely in reaction to the U.S. Supreme Court decision in the Alston case, the NCAA adopted an interim name, image, and likeness (“NIL”) policy in July 2021. This policy modified NCAA legislation and permitted student-athletes to profit from their name, image, and likeness for the first time in history.
The stated purpose of this policy was to allow NCAA athletes to engage in endorsement deals and profit from their marketability. With minimal guidance provided, the NIL landscape became the “wild west,” with students inking deals with entities ranging from nationally recognizable brands to local car dealerships. Student-athletes and universities were still barred from engaging in direct pay-for-play models, but university boosters began establishing collectives associated with universities effectively to engage in a gray area of pay-for-play activity.
NIL collectives are stand-alone start-up companies that were created to provide financial opportunities for athletes by providing a centralized organization for boosters and companies interested in promoting a specific school. These collectives were quickly established as back-door channels to entice prospective student-athletes to attend certain schools by the lure of guaranteed financial compensation. Growing concerns as to the power of these collectives were on full display when Coach Nick Saban of NCAA Football powerhouse Alabama accused competing universities of ‘buying’ their players. The NCAA responded to these concerns by issuing new NIL guidance to address compliance for universities in their dealings with affiliated collectives. But is it too little, too late?
The latest guidance regarding third-party involvement, issued in May 2022, recognizes that many student-athletes benefit from NIL deals. However, the fear of inadequate representation amongst student-athletes and university-affiliated collectives taking advantage of both prospective and current student-athletes has forced the NCAA to issue further guidance.
In the May, 2022 guidance, the NCAA concentrates on these collectives. Because these collectives appear to have the overall mission of supporting specific NCAA institutions and making NIL opportunities available to both prospective and current students, they are considered to be boosters and are bound by NCAA booster legislation. See the full guidance here. By establishing these NIL collectives as boosters, the NCAA attempts to regain control over the recruiting process by imposing penalties against member institutions for actions conducted by these collectives.
The rapidly changing landscape of the NCAA and its handling of NIL activity has left stakeholders in collegiate athletics with more questions than answers. 29 states have passed NIL legislation, but no federal legislation appears to be passing anytime soon. NCAA President Mark Emmert is hopeful Congress could pass a bill, but that has yet to occur. Many legal challenges will continue to develop in this “wild west” period of the NIL development.
If you are a student with questions about an NIL benefit, or if you are supporting a collective trying to interpret the NCAA guidance, let us know.