Not every school is equal
The new NCAA interim NIL policy, which went into effect on July 1, 2021, allows college athletes to use their name, image and likeness to seek brand partnerships and endorsement deals, which was only previously available to athletes at the professional level. But the new laws are patchy, and there’s a lack of uniformity, prompting many schools to partner with outside agencies to make sure they aren’t stepping outside of bounds, or to discover any loopholes where they could benefit from the new laws.
Jason A. Setchen, an attorney in Florida who represents several professional athletes and has been speaking to colleges and athletes around the new NIL laws, explains that what the NIL laws did was effectively deferred the rights to conferences and universities to make their own rules and regulations around the use of student athletes’ name, image and likeness, but they first have to follow state laws on NIL. This complicates issues since there are only a handful of U.S. states that have active laws in place, and many are in the process of introducing new laws, making it difficult to keep track, he says. In Florida, for example, which introduced a new law on July 1, student athletes can only be paid market value for their services, and the agents they work with have to be registered sports agents in the state of Florida.
“States have certain restrictions and limitations and other states don’t even have laws on the books about NIL, so it’s purely being driven by the conferences and universities,” says Setchen. “It’s a very complex landscape right now, and until it gets some clarity, it’s going to be filled with landmines.”
Colleges and universities, he says, are all trying to find ways they can make the new NIL laws work for them. “It’s a climactic change in the way schools earn money off of merchandising and other things they’ve done historically to earn money,” says Setchen. “They have to address the name, image and likeness problem and they have to share in the revenues or they have to make student athletes part of the process, which they did not have to previously. It’s a learning curve.”
The question of whether schools can arrange or facilitate NIL opportunities for their athletes, such as through licensing deals, isn’t expressly addressed in the new interim policy, and might not be addressed by state NIL laws, says Baker. The Fair Play Act prohibits schools from compensating their athletes directly and from “caus[ing] compensation to be directed to” athletes.
“This language, which may also be in other states’ NIL laws, would seem to mean that there is a limit as to how involved schools can be in facilitating NIL deals for their athletes,” says Baker. “On the other hand, locating exactly where that limit is will be difficult, since these laws and this marketplace are so new.”
One opportunity schools are leaning towards, says Baker, is to work in collaboration with student athletes through licensing programs. For example, the use of jerseys are no longer permissible in a school’s marketing efforts because there is a name, image and likeness issue. But a school can still market those jerseys if it splits the profits with the students involved. This way, the schools can say they aren’t involved in securing deals themselves and are simply approving the use of their trademarks. Both the school and the athletes can benefit financially from these new arrangements. There are a number of schools that are already doing so. In August, for instance, the University of Texas partnered with The Brandr Group to launch a licensing program for its student athletes, allowing them to profit off opportunities using their name, image and likeness along with UT’s official trademarks and logos.
"Now fans can purchase Texas Longhorns items like jerseys and t-shirts and support their favorite players, which we have never been able to do before, and the student athletes are able to profit from those sales through their agreement with Brandr,” Chris Del Conte, VP and athletics director at UT said in a statement.