The Pluses and Perils of Profiting as an NCAA Athlete
A guide to help college students navigate the NIL sponsorships and NCAA ruling maze.
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After wrapping up your senior season as a stand-out high school cross-country runner, you committed to a D1 university program with a full ride. Then, over the summer before your first year, you sign an agreement with a gambling site, granting perpetual rights to your name, image and likeness in return for logoed sweatshirts and hats.
The gambling site announced you’re joining on social media and you posted pictures of you wearing their branded apparel and that gave you enough of a media boost to parlay your influencer status into a sponsorship with a local sub sandwich shop for up to five subs a week throughout your college career. A year into that collegiate career, however, you try to follow your coach, who is transferring to a new program. Unfortunately, it is in a state where student-athletes are legally barred from profiting from associations with gambling businesses.
While this isn’t an actual scenario, it certainly could be, given the nascent evolution of name, image and likeness (NIL) sponsorships, with both student-athletes and sponsors learning as they go along. Student-athletes are enticed by seemingly promising offers and trying to navigate these emerging opportunities with limited knowledge.
NIL Law Origins
In 2019, California passed Senate Bill No. 206, which prohibited California universities from restricting college athletes’ ability to profit off their name, image, and likeness, in direct conflict with NCAA rules. Several states followed, coupled with an onslaught of antitrust litigation brought by current and former NCAA athletes against the NCAA. This summer, the Supreme Court ruled in NCAA v. Alston that NCAA policies limiting education-related benefits were too restrictive, effectively striking down the antitrust arguments the NCAA has been making in courts for the past decade. As a result, the NCAA ceded to public pressure and passed an interim NIL policy that went into effect on July 1, 2021.
NIL refers to an individual’s right to publicity. Typically, this comes in the form of sponsorship and endorsement deals. To be clear, NIL is not the same as pay-for-play. The NCAA is clear that athletes still cannot be compensated for their athletic performance, nor can they receive money from their institutions. Rather, an athlete must provide a service in exchange for monetary or in-kind compensation. For example, a brand might send an athlete clothing, and the athlete posts in that clothing on their Instagram page and tags the brand.
Although the NCAA has passed its own policy, athletes are still subjected to NIL laws in their university’s state, if the state has passed one. State laws vary broadly on the activities they permit. Some do not allow athletes to obtain agents and others might prohibit athletes from signing deals with alcohol or gambling companies. In Colorado, for example, athletes are permitted to hire an agent or attorney to represent them in negotiations, but they are also required to disclose contracts to their school’s athletic department.
Athletes should also be aware of their university’s policies around NIL. Most schools do not permit an athlete to wear school gear or use any school branding in NIL partnerships, because schools own the trademark rights to their own logos. Some schools might prohibit athletes from signing a deal with a competitor of one of the school’s sponsors.
The Quickly-Evolving NIL World
NIL has already provided major opportunities across the board, from high-profile athletes in revenue sports to even walk-ons in non-revenue sports. The day that NIL went into effect, BoostMobile signed Hanna and Haley Cavinder, twin basketball players at Fresno State University. Some brands have even inked deals with entire teams. SmartyStreets, a location data intelligence company, signed agreements with all female athletes at Brigham Young University.
While the implementation of NIL has been overwhelmingly positive for college athletes, a few cases give rise to caution. One gaming company, YOKE, paid college athletes for posting about its app on Instagram, in exchange for perpetual, royalty-free, irrevocable rights to YOKE. Many athletes granted YOKE perpetual rights to their name, image, and likeness for as little as $20. Others have cautioned athletes from signing with Barstool, in part because Barstool may be classified as a gambling company by certain state laws.
Emily Sloan, 100-meter hurdler from the University of Oregon, says she always loved Barstool Sports and figured joining the gaming and media company “would definitely help her to build her personal brand.” Since joining, however, the only substantive communication Barstool sent was an email saying “they are trying to figure out what everything means and how to do this all since it is very new. They said they will keep us updated.” Sloan says that when they “posted about me being a part of Barstool Sports I gained about 100 followers on Instagram.”
“I was initially prompted to sign with Barstool because I thought it might be a good way to get some exposure, connections, and building my brand,” said University of Colorado 400-meter runner Tyler Williams. “I just recently heard from Dave Portnoy with some updates on the rewards card, merch, and the first Barstool athlete to who now has their own shirt for sale. He said they will promote it, fill all orders, and the athlete will receive 80% of the profit.” Williams said that since Barstool posted his photo he received “a few more followers but nothing drastic considering the sheer number of new athletes they post daily. Overall, the goal is to potentially grow with money-making opportunities and social influence. They have also let me know that they are open to new ideas but are just being slow and careful because they want to make sure our image is presented in the right way.”
Sports agent Merhawi Keflezighi, who represents some of the biggest names in running, doesn’t have any NIL athletes because there isn’t much flowing to runners yet, at least not enough to warrant a sports agent’s involvement. That said, Keflezighi cautions that student-athletes need to protect themselves and be wary of potential traps and hopes schools will provide legal representation to help the athletes. He has cautioned some athletes, “no deal is better than a bad deal.”
In trying to find your way in this new NIL landscape, here are some easy pointers:
- Read contracts and terms and conditions before signing, and ideally have an attorney review documents for you.
- Know your state’s law.
- Connect with school resources. Many schools have partnered with NIL companies to educate athletes on entrepreneurship and building a social media presence.
- Keep track of your income, because the compensation is taxable, including in-kind sponsorships.
- Recognize your personal brand and make sure sponsorships align with your values and beliefs.
- Accept money or in-kind benefits from a company, without providing a service in return.
- Use university trademarks in commercial deals.
- Contract with brands that might conflict with NCAA rules, like drug and gambling companies, or supplement companies that are not NCAA-approved.
- Sign a contract that covers categories, such as footwear or apparel, that is carved out by your school’s exclusivity in those areas.
The following resources and links should help in guiding you through the NIL maze: