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What is NIL and how has it transformed College Sports?

The collegiate athletics landscape is constantly evolving. In an era sometimes referred to as “the wild west of college sports”, the “transfer portal” and “NIL” have become the name of the game for high revenue sports. As you might expect with a monumental change, institutions were eager to take advantage and ensure they weren’t left behind. What is NIL though, and how has it managed to transform college sports in only a couple years?

For those not familiar with the term, “NIL” is simply an acronym for name, image, and likeness. NIL makes it possible for NCAA student athletes to earn compensation for promotion, partnership, and representation of brands. This was previously forbidden for student athletes and could be met with disciplinary action from the NCAA. Prior to NIL, there were frequent debates about the fairness of prohibiting athletes from profiting off their athletic success. Top tier athletes were generating millions of dollars for their schools but were strictly prohibited from earning any financial compensation. However, starting in 2019, a series of events took place that permanently changed NCAA athletics.

On September 30, 2019, California legislation was introduced that prevented schools from punishing student athletes for profiting from endorsements. The new legislation was set to go into effect in 2023. For a couple years following California’s initial move, discussion about altering the NCAA’s long-standing policies continued to ramp up. As the NCAA worked towards modernizing their rules, there was another major break in the NIL movement. On June 21, 2021, the Supreme Court unanimously ruled against the NCAA in the NCAA vs. Alston lawsuit. The Supreme Court decision opened new avenues for student athletes to receive compensation. According to Justice Neil Gorsuch, it was the court’s opinion that the NCAA was violating antitrust laws. Later that week, Kentucky Governor Andy Beshear issued the first executive order to allow student athletes to profit from their name, image, and likeness (NIL) while in college. The order was set take effect on July 1, 2021.

Kentucky’s Executive Order was popular, and other states soon followed. Governor Beshear’s goal was to ensure the states universities were not put at a competitive disadvantage, while also claiming a person’s name, image, and likeness, is their own. As uncertainty and confusion about NIL plagued the nation, Kentucky made their stance clear. On March 9, 2022, Senate Bill 6 was signed into Kentucky law by Governor Beshear. Senate Bill 6, also known as the “Pay to Portray Act”, builds on Governor Beshears earlier executive order. It allowed student athletes to be compensated for their name, image, and likeness while enrolled at a university or from obtaining an agent. The bill goes a step further by not limiting the amount of money an athlete can earn. Individual universities may hold stricter views, but it is not shared by the Kentucky legislature.

While NIL laws have progressed a lot in the last few years, they are still not uniform throughout the country. NIL policies are continually being developed and voted on. As recent as January 10, 2024, the NCAA convened to vote on new policies dealing with agents, contracts, and disclosure details. Indications point to the NCAA wanting to find a happy medium, where student athletes are fairly compensated, and the rich traditions and values of collegiate athletics are preserved. This may not be easy to achieve, but numerous resources have been dedicated.

Name, Image, and Likeness has just recently come to the forefront of college athletics. Kentucky has established itself as a frontrunner in the campaign for student athlete compensation. NIL is here to stay, and as universities know, you can either embrace change or be left behind. Our attorneys at Strause Law Group are here to help navigate these new waters for both students and businesses. Contact us today with your questions about NIL.