What is NIL?
If you’re a fan of college sports, you’ve no doubt heard the acronym “NIL” floating around. NIL stands for “Name, Image and Likeness” as it relates to NCAA athletes.
Prior to a recent NCAA amendment, college athletes were not able to profit off of any sort of endorsement of any product, good or service. The punishment for such an act would be for the athlete to potentially lose his/her eligibility and/or the institution be fined or otherwise penalized.
Now, to most people, this change has happened extremely fast. However, the roots of this go all the way back to UCLA basketball player Ed O’Bannon’s landmark case against the NCAA in 2009. O’Bannon was the star of the 1995 UCLA team that won the NCAA championship and noticed in EA Sports’ “NCAA Basketball '09” that his likeness was attributed to a character that played on the representation of UCLA in the game.
His suit claimed that the NCAA (and EA Sports as well as other co-defendants) challenged the NCAA’s use of name, image and likeness rights for commercial purposes. The class-action lawsuit also argued that upon graduation, the athlete is entitled to compensation for the NCAA’s use of his or her name, image and likeness rights.
That case eventually was won against the NCAA (although other defendants settled out of court) but it was then reversed in the court of appeals in 2015 and again in a Supreme Court ruling in 2016. The case was essentially over, but the issue persisted.
This led to a groundswell of support as the rise of social media and video platforms such as YouTube afforded athletes a chance to build and sustain their own organic brands without compensation.
In September 2019, California passed legislation proposed by Sen. Nancy Skinner that prohibited the NCAA from punishing NCAA athletes who accept endorsement compensation while they attend college. A month later, the NCAA Board of Governors voted to update its approach to NIL as it pertains to college athletes.
In April 2020, the NCAA laid out suggestions for how and what those adjustments should be, but it was rendered almost moot by the state of Florida passing its own state law allowing for athletes to profit off of NIL by July 1, 2021.
There were several other developments — including individual athletes advocating for their rights by potentially boycotting upcoming seasons — but Florida’s position provided a framework by which other states and schools were inclined to follow. There is no federal legislation passed about NIL just yet as those wheels turn a bit slower, so individual states have taken to passing their own regulations.
The long and short of it is that right now a college athlete can use his or her likeness to sell, promote or otherwise market products for companies and be financially compensated for it without limit.
Now, that last part may change as several states — including Massachusetts — are still working at the state level to put bills through legislation that would address this as well as other potential concerns. In other cases, schools are scrambling to take the lead and allowing for full team sponsorships that benefit all of the players on the team.
With the advent and development of social media, athletes have bigger platforms than ever. Some of the most lucrative deals that have been signed have come as a result of those athletes using their pre-established organic brand. The power of an influencer on social platforms is undeniable, and highly sought-after by innumerable markets.
However, athletes cannot promote products while wearing their college or team gear unless that deal is made with the team and/or institution. So, as it pertains to hockey, if a player is on a team that is sponsored by company A, they cannot shoot a promo for their Instagram of them using a product from company B with any school logos present.
On the flip side of that, schools also cannot pay athletes directly for NIL contracts. Nor can boosters pay athletes based on their on-field performances or for recruiting purposes.
Athletes also can start and promote their own businesses, run camps and clinics, sell memorabilia and even hold their own autograph signing events. The earning potential that is accessible is now the same as nearly any other person with an elevated profile or level of fame.
This shift in NIL is ever-changing and evolving right before our eyes. Like almost anything involving marketing and compensation, there is potential for growth as well as exploitation. If you’re a college athlete or the parent of a college athlete, make sure to think through signing your first deal and know your worth.
— Kyle Devitte contributed to this report
