This is an excerpt from Introduction to Sport Law With Case Studies in Sport Law-3rd Edition by John O. Spengler,Paul M. Anderson,Daniel P. Connaughton & Thomas A. Baker III.
Perhaps in response to these decisions and the inability of college student-athletes to assert a right of publicity, in September 2019 California enacted the Fair Pay to Play Act, allowing college athletes to seek compensation for the use of their name, image, and likeness rights (SB 206). Since that time, 27 states have passed similar NIL legislation, and the governors in Kentucky and Ohio signed executive orders enacting NIL rights for student-athletes. As of July 2021, 12 other states have proposed NIL bills, and 9 states have not considered the issue yet (see table 9.2 for a list of all bills by state). The main feature of most of these laws is that they permit college athletes in these states to receive compensation for the use of their name, image, and likenesses but do not allow these athletes to receive any non-NIL-related compensation.
A few of these laws go further. For example, New York’s law requires schools to establish a “Sports Injury Health Savings Account” and a “Wage Fund” from revenue earned in the college’s athletic program (NY 6722B). The former fund provides compensation to athletes who suffer career-ending injuries, and the latter provides that at the end of each school year the funds will be distributed evenly to all athletes at the school.
California’s law will not go into effect until 2023, but several states passed laws that went into effect on July 1, 2021, including Alabama, Florida, Georgia, Mississippi, New Mexico, and Texas. Because of these inconsistencies and inaction from the federal government in creating a national NIL law, on June 30, 2021 the NCAA adopted interim guidance that allowed student-athletes to profit from their NIL rights following the state laws currently in place or without restriction in states without NIL laws (Brutlag Hosick, 2021, June 30). The NCAA made clear that all other amateurism-related rules remain in place. At the same time, the Uniform Law Commission has proposed a Uniform College Athlete Name, Image, or Likeness Act that could promote uniformity among all the states in their NIL laws in the absence of a federal law, but the uniform law has yet to be completed (ULC, 2021, July 12).
Because of the NCAA’s interim guidance and the state NIL laws that took effect on July 1, 2021, the NIL market opened up and athletes began to sign deals immediately. For example, Fresno State basketball players Hanna and Hayley Cavinder, who already had a large following on social media platforms like TikTok, immediately became spokeswomen for Boost Mobile and Six Star Pro Nutrition for an undisclosed amount. Other examples include Kentucky basketball player Dontae Allen, who signed a merchandise deal with Players Trunk; Auburn quarterback Bo Nix, who announced a partnership with Milo’s Tea; and Miami quarterback D’Eriq King signed endorsement deals with College Hunks Hauling Junk and Moving and Murphy Auto Group that will total around $20,000 (Bender, 2021). King and other athletes like Wisconsin quarterback Graham Mertz have created websites and personalized logos that they have trademarked and can then sell on merchandise.
Although many athletes were quick to jump into the NIL market and profit from this new form of compensation, confusion remains. Although the NCAA has relaxed its rules, state laws are not consistent and athletes in different states are allowed to profit from their NIL rights in different ways. In fact, athletes in states without an NIL law may be in the best position because they are now virtually unregulated. In addition, most of the state laws intentionally leave the athlete’s athletic department out of the equation so that the department cannot interfere with the NIL process. These departments are left with little guidance on how to help their student-athletes avoid running afoul of other NCAA amateurism rules because athletes still cannot receive compensation to participate. Some still expect Congress to jump in with some sort of federal NIL bill, and the uniform law may be passed in the near future, but for now athletes are left mainly on their own in this new market.
Still unclear is whether all or even many athletes will be able to profit from use of their NIL rights, and the impact that this sort of inequity may have on teams and athletic departments remains to be seen. Alabama football coach Nick Saban revealed this inequity when he announced on July 20, 2021, that sophomore quarterback Bryce Young has already earned almost $1 million in endorsement deals (Rodak, 2021). If high-profile athletes in the SEC earn this type of NIL compensation, it is unclear how smaller schools in smaller conferences will be able to compete.