On June 12, Florida Governor Ron DeSantis signed a name, image and likeness (“NIL”) bill into law, moving up the deadline for the NCAA to complete ongoing efforts to modernize its NIL rules. Unlike California’s Fair Pay to Play Act and Colorado’s NIL bill, which have both been previously signed with effective dates in 2023, the Florida NIL bill would allow student-athletes to profit off their NIL in Florida beginning July 1, 2021. More than 30 additional states have pending NIL legislation moving through the legislative process.
While the NCAA has dealt with a myriad of issues in 2020, NIL modernization efforts continue to press forward, and the Florida law sets a tighter timeline for either the NCAA or the federal government to put forward a national standard to avoid a state-by-state approach to NIL issues. While the specific form the NIL rule changes will take is not yet clear, it seems near certain that student-athletes will be allowed to profit off their NIL rights in the very near future.
On April 17, 2020, the NCAA’s Board of Governors Federal and State Legislation Working Group issued its Final Report and Recommendations (the “Report”), which set forth the following timeline for the NCAA’s Divisions 1, 2 and 3 to propose and pass modernized NIL rules:
- By August 30, 2020: Divisions shall have drafted NIL legislative proposals for consideration, having solicited membership (schools) suggestions regarding permissible NIL activities and appropriate regulation.
- By October 31, 2020: Divisional governance bodies shall revise NIL proposals and recommend legislation that meets the divisional needs of student-athletes for commercial or promotional use of their NIL in situations that are related to athletics, or that involve endorsements of commercial products or services.
- By January 31, 2021: Divisions shall enact NIL legislative proposals, with effective dates no later than the start of the 2021-22 academic year.
The Report includes a renewed call for federal legislation to pre-empt the various state legislative proposals, including the already passed California, Colorado and Florida NIL bills. In mid-June, Senator Marco Rubio (R-Florida) introduced the “Fairness in Collegiate Athletics Act,” which allows student-athletes to receive NIL compensation; however, such bill was not a byproduct of a working committee and does not seem likely to receive congressional approval.
The Power Five (“Power 5”) collegiate conferences are also pushing for federal NIL guidance “that would protect student-athletes, provide economic opportunity, and promote academics.” The Power Five (also called as the “Autonomy Five”) college athletic conferences include the (1) Atlantic Coast Conference (“ACC”), (2) Big 12, (3) Big Ten, (4) Pac-12, and (5) Southeastern Conference (“SEC”). In a May letter to federal House and Senate leadership, the Power 5 conferences urged elected officials to act so that a uniform federal standard would preempt state laws governing NIL licensing. The Power 5 conferences letter seems to have worked, as a summary of the proposed legislation – Student-Athlete Equity Act of 2020 – was obtained by multiple media outlets on July 17, 2020, and congressional hearings on “Protecting the Integrity of College Athletics” are scheduled in the coming weeks. Lawmakers working on the NIL bill include Sen. Lindsey Graham (R-S.C.), Sen. Richard Blumenthal (D-Conn.), Sen. Jerry Moran (R-Kansas), Sen. Cory Booker (D-New Jersey), Rep. Anthony Gonzalez (R-Ohio) and Rep. Emanuel Cleaver (D-Missouri).
The Report recommends areas of NIL modernization to the NCAA rules, hinting at future intellectual property issues the changes may implicate. Among the areas highlighted for modernization are: i) permitting student-athlete compensation for third party use of NIL rights, clearing the way for endorsement deals using student-athlete IP, and ii) permitting student-athlete compensation for business or work activities, which could include student-athlete’s own content creation ventures.
Anticipating one potential licensing issue, the Report recommends prohibiting schools from paying student-athletes for their NIL in the school’s own promotional efforts, and recommends that student-athletes not be able to profit off photos, broadcasts, clips or other recordings of their athletic activities associated with their school. Schools would also be prohibited from facilitating endorsements between student-athletes and third parties.
The Report recommends areas for additional regulation, which will affect how student-athlete’s IP, can be used. Similar to the policy of some professional leagues, student-athletes will be barred from promotional activity involving alcohol, tobacco and sports gambling. Interestingly, the Report singled out certain other businesses with a history of recruiting violations as a target for additional regulation, in particular, shoe and apparel companies.
Novel issues will undoubtedly arise as state and federal lawmakers continue to develop NIL legislation across the country. Absent federal legislation, NIL laws from California to Florida will soon create new opportunities for sponsors and student-athletes alike to profit through endorsements and business activities, making change in this space inevitable. As student-athlete IP issues continue to develop, our team will continue to be up-to-date on the changing NIL landscape.