The doors to a new era of college sports officially opened Thursday. For the first time, all NCAA athletes are now able to make money from a wide variety of business ventures without losing their eligibility.
A mixture of state laws and NCAA rule changes have removed prohibitions that prevented athletes from selling the rights to their names, images and likenesses (NIL). The transformative shift comes after more than a decade of legal, political and public pressure to give athletes access to a bigger piece of the billions of dollars generated by college sports each year.
The new opportunities in front of athletes are abundant, but they also can quickly become murky amid a confusing, complex and sometimes conflicting set of guidelines for the types of deals athletes can strike and the types of products they can endorse. This beginner's guide to understanding NIL should get you up to speed with everything you need to know about how the new rules will impact college sports.
What is NIL?
Name, image and likeness rights are also frequently called an individual's right to publicity. NCAA athletes will be able to accept money from businesses in exchange for allowing the business to feature them in advertisements or products. Athletes also will be allowed to use their own status as a college athlete to promote their own public appearances or companies for the first time.
All Americans have the right to sell their NIL. Previously, athletes forfeited those rights as part of the terms of signing their scholarship agreements. That will no longer be the case.
Who is making the rules?
There are roughly a dozen states that have laws in effect that dictate how college athletes can profit from their name, image and likeness. The NCAA has instructed individual schools in states that do not have a law in effect yet to craft their own policies based on loose guidelines that are designed to prevent pay-for-play deals and payments that are used as recruiting inducements.
Will schools be allowed to pay athletes directly?
No. Most new state laws and the NCAA rules explicitly prohibit schools from paying athletes directly for the use of their NIL or for any other purposes.
Can athletes hire agents to help with all this?
Yes. All state laws and NCAA rules allow athletes to hire professional help in the form of lawyers, agents and tax professionals and others. Those new relationships come with a major caveat, though. Agents can help with NIL deals. Their contracts can't stipulate that the agents would represent the athlete in future negotiations if they turn pro. The NFLPA warned professional sports agents in a statement Thursday to heed those restrictions.
Can athletes enter into NIL agreements with boosters?
The NCAA does not have any rules that restrict boosters from paying athletes as long as those payments are not directly for their athletic performance or an inducement for recruiting purposes. Some new state laws address booster involvement in different ways, and some might need further interpretation before it's clear how involved boosters can be in paying athletes in those states.
Are schools allowed to arrange NIL opportunities for student-athletes?
Some state laws restrict schools from arranging deals for their athletes. The NCAA rules leave that decision up to individual schools, but it warns that schools need to be careful that they don't cross any lines into an area that could be considered paying the players or using NIL payments as a recruiting tool.
Are there other restrictions on how athletes can make money?
Yes. State laws and policies crafted by individual schools create an inconsistent variety of restrictions for athletes depending on where they attend school. In some places, athletes can't endorse alcohol, tobacco or gambling products. Others have some restrictions on whether athletes are allowed to use school logos and other copyright material in any paid opportunities.
Most states and schools also prohibit athletes from signing any deals that conflict with the school's sponsorship agreements. For example, a basketball player on a team sponsored by Nike would not be allowed to wear Adidas shoes during games. However, in most cases, that athlete could promote a non-Nike shoe company during times when not playing games or participating in other team activities.
Will an individual be required to report name, image and likeness activities to their school?
Most state laws provide a time frame in which athletes need to share the details of any potential NIL deals with the school. In some states, the school needs to approve of deals ahead of time. The NCAA rules don't specifically require that athletes report their deals to schools, but it's likely that most schools will create policies that require some form of disclosure.
Why isn't there one universal set of rules for all college athletes?
The push for NIL rights gathered steam in 2019, when California passed a state law making it illegal for its schools to ban athletes from making money. During the past two years, lawmakers in roughly two dozen other states have passed similar laws to make sure their schools weren't at a disadvantage in recruiting top talent. Due to lobbying from local schools and the depth of understanding each state legislature has about the nature of college sports, those lawmakers took different approaches to regulating the new marketplace.
The NCAA hoped Congress would help it pass a federal law that would create one consistent standard for all college athletes, but members of Congress have yet to agree on what should be included in a national law. The NCAA is concerned that the organization would face legal challenges due to antitrust violations if it creates its own set of NIL restrictions without the backing of a federal law. So for now, any school located in a state without a law going into effect is responsible for making and enforcing its own NIL policy.
Will there be a universal set of rules in the future?
It's likely that Congress will pass some sort of legislation that allows for a uniform NIL standard for all college athletes across the country. Democrats and Republicans are divided for now on the scope of reform they want to include in a Congressional law. Republicans are pushing for a narrow law that only addresses NIL rights. Democrats want to make schools provide increased medical coverage, academic benefits and the right for athletes to collectively bargain in the future.
NCAA leaders emphasized that the rule changes put into place for July 1 were a temporary solution while they attempt to find ways to provide more guidance in the future.
What kind of things will college athletes be doing now to make money?
Athletes are anticipated to appear in national advertising campaigns; partner with brands to advertise through social media channels; start their own youth sports camps or teach lessons; launch their own businesses; sell memorabilia; make paid public appearances for speaking events or autograph signings; and use their NIL rights in a variety of other creative ways.
Who stands to benefit?
The top stars in college sports will have the opportunity to use their fame to sign deals worth hundreds of thousands of dollars, if not more. Others who have built a massive social media following also stand to make considerable amounts of money. But all college athletes will have opportunities for smaller amounts of money or to receive items or free meals in exchange for promoting local businesses. Experts are unsure exactly how much demand there will be for college athletes moving forward, but this previous story estimates the value of the types of opportunities that are now available for college athletes.
Does this mean college sports video games are returning with players in them?
Maybe. Video games rely on group licensing deals to negotiate with large groups of athletes for their NIL rights. College sports still do not have unions, which typically negotiate group deals for athletes. While current NCAA restrictions don't expressly prohibit group licensing, it's unclear if future rules might try to prevent those kinds of arrangements. There are some companies that are working to find ways to form group licenses with college athletes without needing a union, and EA Sports has committed to bring back its popular college football video game at some point in the next few years with or without players being directly involved.
EA Sports issued this statement after the new NIL rules went into effect: "We are watching the recent developments regarding student-athlete name, image and likeness very closely. It's still very early stages at this point, and we plan to explore the possibility of including players in EA SPORTS College Football. For now, our development team is focused on working with our partners at CLC to ensure the game authentically showcases the great sport of college football and the more than 100 institutions signed on to be featured in our game."
How will this change things for fans?
It won't really. You will start to see athletes from your favorite schools in local and national commercials. You might see some disputes develop between athletes and schools as both groups try to sort through gray area created by the new rules. Many athletes and their advocates believe new NIL opportunities will provide increased opportunity for fans to interact with their favorite players and to learn more about who they are and what they are passionate about beyond their sport.
ESPN reporter David M. Hale contributed to this story.