This morning, the NCAA announced that its Board of Governors supports the proposed rule changes to allow college athletes to be compensated for their name, image and likeness. But, what does that actually mean? I spent the morning poring over the 31-page plan, which is chock full of legalese. In short, while the plan has good intentions, there are still a lot of very important details that need to be ironed out.
Here’s what you need to know.
No logos or uniforms in endorsements
Let’s start with the easy stuff. Players may be compensated for third-party endorsements (TV commercials, social media posts, billboards, etc.), but they will not be allowed to wear their school’s uniform or anything with the school’s logo on it. They will be allowed to identify themselves by their sport and school, but logos are off limits. Schools cannot have any involvement in the deals or pay players to appear in their own commercials.
Side businesses are now okay
Players will now be allowed to make money off autographs, personal appearances, sports camps/lessons, music, or art. For instance, Kentucky cornerback Kelvin Joseph, aka Bossman Fat, can now sell records and tickets to live shows at venues like KSBar and Grille. Again, UK can’t have any part in it and Joseph can’t wear his uniform or any piece of UK apparel.
Clothing lines, e.g. t-shirts bearing the name and face of the player, are now okay too, as long as there are no UK logos. Players will also be allowed to profit off their social media accounts as influencers. For instance, a sports drink company could pay a player to post a picture on Instagram holding their product, etc.
No NCAA Football video game (for now)
As Roush mentioned earlier, the current NIL legislation does not allow for the return of EA Sports’ NCAA Football video game. In the report, the working group writes that group licenses for video games are “unworkable in college sports” because there is no players’ union.
At this time, the working group is also not recommending any changes to NCAA rules to permit group licenses of student-athlete NIL in what are characterized as group products (like video games). There are legal hurdles to such activity that preclude it as a realistic option for implementation at this time. The working group recommends that the NCAA continue to explore whether those legal hurdles can be overcome through efforts described in Section VI, so that this issue can be revisited in 2021 or later.
How they’re going to regulate all of this is still undecided
All of the suggestions in the report are great, but how will the NCAA regulate them? Great question. There’s an entire section dedicated to “recommended areas of regulation,” which is now up to the individual divisions to figure out. Items include:
- Whether or not players can endorse alcohol, tobacco, or sports gambling
- Whether or not shoe or apparel companies should be included (ha!)
- Whether or not players can sign deals BEFORE they enroll at school, e.g., a booster luring a recruit in with a potential deal
- The involvement of boosters once players are enrolled at school
Also, what about agents? How much can they be involved? So, the biggest areas of concern still have a giant shrug emoji next to them.
How will fair market value be determined?
Another great question, and one the NCAA is still trying to figure out. In a conference call this morning, Ohio State athletic director and co-chair of the working group Gene Smith said there is no cap on how much players can earn from deals, but how do you prevent a company — say, one owned by a booster — from paying way over the fair market value for an endorsement?
“There will be some subjectivity there because that’s the market,” Smith said. “The reality is the reasonable and rational review of that activity will hopefully allow us to know if it’s appropriate. There’s no dollar amount. It’s just what’s appropriate for the activity that’s they’re compensated for.”
“It’s vitally important that we maintain some level of integrity and fairness,” Big East commissioner and co-chair Val Ackerman added. “We believe guardrails on boosters will help us mitigate the potential of recruiting inducements.”
Yeah, that’s going to be a problem.
The NCAA is asking for Congress’ support
All of these new rules will probably result in lawsuits left and right, so the NCAA is asking for Congress’ support to avoid issues with various state laws (e.g., California’s Fair Pay to Play Law) and antitrust litigation. One, that’s a big ask, and two, Congress doesn’t exactly move swiftly, so it could take forever. Ever since California’s Fair Pay to Play Act was signed into law, there’s been a call for federal legislation on the matter. The NCAA has joined the chorus.
When is all of this actually going to happen? The proposal has been sent to the three NCAA divisions for feedback, which is due on August 30, 2020. The legislation must be drafted by October 31, 2020, with a vote taking place by January 31, 2021 to go into effect for the 2021-22 school year. At the end of the report, the group reiterates that could be delayed if Congress doesn’t act.
As noted earlier, there currently are significant legal impediments to the NCAA adopting this kind of licensing structure; further exploration of these concepts will require clarity from Congress of the NCAA’s authority to enact rules or maintain oversight in this area.
Odds this is all figured out by the 2021-22 season? I’m not holding my breath.