Navigating the Brave New World of Name, Image, and Likeness with NCAA Athletes

It's no secret every business wants to increase their brand recognition and generate more revenue. But being a "business" isn't always what you think of in a “brick and mortar" sense. Take celebrities, influencers, and athletes, for instance, using their name, image, and likeness (NIL) to generate income. In many communities, especially college towns, some of the most recognizable members are NCAA student athletes. However, up until recently, these student athletes were not permitted to monetize their NIL and instead solely relied on scholarships from their respective schools.

But on July 1, 2021, the NCAA made the decision to grant student athletes the right to monetize their NIL -- a decision that created a new industry, new marketing opportunities, and new legal agreements to navigate.

How do they work? NIL agreements allow businesses to capitalize on the name recognition of student athletes while also allowing student athletes to profit in the process. While these deals are akin to having a professional athlete or celebrity endorse a company, the athlete's affiliation with the NCAA presents unique challenges that require careful navigation from an experienced attorney.

Below are a few key points that businesses and athletes should be aware of before entering into an NIL deal without legal guidance:

1. Athletes and businesses absolutely cannot create a pay to play deal. In other words, a business cannot pay an athlete to play for the school of their choice under the guise of an NIL deal. The athlete will lose their eligibility.
2. Athletes cannot agree to any deals with “immoral” businesses, including, but not limited to; companies that sell alcohol, tobacco, have a gambling affiliation, etc.
3. Compensation cannot be based off the athletic performance of the athlete. Athletes may be paid any amount of money, but their performance cannot be a factor in their compensation.
4. Most schools require athletes to preemptively report their NIL deals to the school or another entity, so the school may have the authority to block the deal.
5. Most schools will not allow the athlete to wear apparel or University branding of any type as a part of the deal. Also, most schools will not allow the athlete to use their facilities in performance of the deal.

Additionally, it's worth noting that most schools have created their own guidelines for student athletes and the businesses in with which they work. Keep in mind, however, these are guidelines are not black letter laws and can change at any time. Therefore, it's important to consult an attorney with experience in this field before entering into any agreement.

Recently, our team created an NIL deal between our client, DeFouw Chevrolet, and Purdue standout, George Karlaftis, that led to an increase in brand recognition for DeFouw and more notoriety for George Karlaftis. A true win-win situation that supported a young student athlete and a local business. You can watch the video series here: https://www.youtube.com/c/DefouwAutoGroup/videos

Ready to pursue an NIL agreement for your business or simply have questions about the process? Please give us a call at 765.423.7900 or shoot us an email at info@gutweinlaw.com.