NIL: Considerations for Student-Athletes
11/3/2021
Approximately six months into the
Name, Image, and Likeness (“NIL”) era of the NCAA, we now have a snapshot of
what NIL agreements between NCAA athletes and third-parties will look like and
the legal concerns surrounding those deals.
We have seen agreements ranging from autograph
signings at local businesses and apparel
and merchandise sales to non-fungible
token (“NFT”) artwork auctions and the launch
of a cryptocurrency. Regardless of
the route taken, athletes who intend to profit from their NIL must carefully
consider the personal and professional ramifications of these newfound
opportunities, including the risk to their amateur status (and thus
eligibility), the possibility of personal liability, and the protection of
their brands.
Maintaining Amateur Status
Possibly the most important
consideration for college athletes contemplating NIL agreements is to protect
their amateur status and eligibility by complying with state laws and NCAA
regulations. In May 2021, Tennessee passed NIL
legislation with a web of requirements that untrained entrepreneurs may not
be equipped to navigate given their hectic athletic and educational
obligations. Further, while the NCAA has
stated it will not destroy the eligibility of athletes complying with state
law, this is a temporary policy that could be altered at any moment. Athletes
seeking NIL endorsements need to constantly monitor the rules and regulations
in place to ensure compliance and maintain their amateur status.
Liabilities
Another important consideration
for student-athletes seeking NIL endorsements is the possibility of personal
liability for certain business ventures.
Athletes may want to consider forming an entity to manage their business
ventures in order to shield themselves from liability. For instance, an athlete hosting a training
camp may be sued for any injury incurred at that camp, but having the camp run
by the athlete’s company can protect the athlete from personal liability.
Intellectual Property
Finally, as athletes begin to
build their brand and profit from their NIL, it is vital to protect that brand
by shrewdly negotiating contracts to limit their liability and risk, as well as to retain as much control of the NIL rights as possible. Athletes can further protect
their brand and increase their ability to profit therefrom by acquiring legal
protection of their intellectual property. Many athletes have begun selling
merchandise bearing their NIL and logos. As an athlete’s popularity increases,
so too does the likelihood that a third-party will try to capitalize on that
popularity by selling counterfeit goods bearing an athlete’s intellectual
property. Athletes who fail to put the
proper protections in place before their intellectual property is stolen
may drastically reduce the value of their brand and their ability to protect
it.
Don't Be Afraid To Seek Guidance
Given the web of requirements surrounding NIL
laws and the demanding schedule of student-athletes, seeking guidance from
legal professionals concerning the nuances of the law, the implications of NIL
agreements, and strategies to protect and grow a brand is a prudent decision. Kennerly, Montgomery & Finley, P.C. is
here to offer invaluable guidance to student-athletes navigating the uncharted
realm of NIL.