April 22, 2024
The college sports landscape has undergone significant changes since the NCAA introduced Name, Image, and Likeness (NIL) rights for student-athletes. Granting NIL rights to college athletes not only redefined dynamics within college athletics but also introduced a complex legal framework into unknown territory. On Troutman Pepper’s Highway to NIL podcast, Temple alum Patrick Zancolli and colleagues discuss recent NIL developments in college sports and predictions for what will unfold in the rest of 2024.
2023 was pivotal in shaping collegiate NIL rights. One reason was the NCAA’s policies coming up against a mosaic of state laws, each with a unique stance on NIL. This regulation “patchwork” (see this state legislation tracker) has sparked a call for federal legislation to bring uniformity and clarity to NIL. The October 17 U.S. Senate Judiciary Committee hearing on Name, Image, and Likeness, and the Future of College Sports highlighted the need for consistent NIL regulations and the challenges that institutions, student-athletes, and legal practitioners face in adhering to divergent state laws.
As outlined in the hearing, institutions, students, and their lawyers have several critical areas to address in this evolving landscape.
- Compliance: With the NCAA gearing up to increase enforcement, universities must reassess their compliance strategies to mitigate the risk of NIL violations. Legal advisors must guide institutions, ensuring adherence to both state and NCAA policies.
- Contractual Implications: The surge in student-athlete transfers, fueled by NIL opportunities, introduces complex contractual issues. Students, often understandably untrained in NIL’s business and legal issues, require strategic advice on scholarship agreements, endorsement contracts, and potential disputes.
- Employment Law: The next debate may be whether student-athletes should be considered employees of their institutions subject to the Fair Labor Standards Act, which would have far-reaching effects on regulations, benefits, and taxation. Current litigation in this area like Johnson v. NCAA could deeply affect not only the 2% of NCAA schools that make money off their sports programs but also much smaller schools. It could also call into question schools’ Olympic pipelines.
- International Students: International student-athletes face unique challenges within the current NIL framework, particularly visa restrictions on the ability to earn from their NIL. Students on F-1 visas cannot earn active income in the US but can receive passive income outside the country. Proposed legislation aims to offer more flexibility, but until these developments bear fruit, legal professionals must help ensure international athletes can maximize their NIL potential without jeopardizing their visa status. What, for example, should students on F-1 visas do if recategorized as employees?
- Title IX compliance: The involvement of NIL collectives (where several donors pool funds to create NIL opportunities for a school’s athletes) raises critical questions about Title IX compliance. Because collectives are not subject to Title IX, a disproportionate amount of funds finds its way to male athletes, so institutions must tread carefully regarding how intertwined they become with the collectives to avoid Title IX violations and ensure equitable treatment across genders.
Looking ahead, the Highway to NIL hosts also anticipate several developments in collegiate NIL law:
- Increased Enforcement: The NCAA has been “bulking up” its enforcement of NIL violations—armed with new, more lenient charging standards and new resources, including an Associate Director of Enforcement for NIL inquiries and new investigators and enforcement staff.
- Rising Student-Athlete Transfers: NIL opportunities will continue to influence transfer decisions, reshaping team compositions and competitive balance. While offering NIL opportunities to induce transfer remains prohibited, increased transfers could lead to increased investigatory action.
- Supreme Court to Weigh in on Employment Status: Legal decisions involving USC and Dartmouth, among others, could prompt the Supreme Court to clarify student-athletes’ employment status.
- Collectives: Recent NCAA rules could curb the influence of collectives and boosters over student NIL deals. In December, NCAA president Charlie Baker proposed changes that would give schools more control over student-athlete NIL opportunities, and in January, the NCAA’s D1 Council proposed similar rules. These changes could shift how collectives interact with student-athletes, diminishing their direct influence.
Most recently, however, NCAA NIL rules have been enjoined in a lawsuit that effectively put the NIL space on pause pending further developments in the case. Legal complexities and evolving regulation have already marked the young college sports NIL era. Staying ahead of the curve will mean not just understanding current legal frameworks but also anticipating future changes. The changing landscape presents opportunities and obstacles for all stakeholders—student-athletes, institutions, and the broader college sports world.
The original podcast episodes can be found here. The Senate hearing is available here.
Patrick Zancolli (LAW ’23) is an Associate in Troutman Pepper’s Construction practice.