NCAA Division I Board Updates Guidance on School Involvement in NIL Activities

Client Alert

The NCAA Division I Board of Directors issued updated guidance for the NCAA Interim Name, Image and Likeness (NIL) Policy to clarify certain permissible and impermissible activities by institutions that are involved in the NIL activities of their currently enrolled student-athletes. The guidance provides some certainty that schools may directly engage in the NIL activities of student-athletes and collectives in key areas, which further opens the door to enhanced opportunities for student-athletes, schools, collectives and brands. However, important issues remain subject to interpretation, and schools may need to re-examine current involvement in a number of important areas, most notably revenue sharing from NIL-related product sales and collective arrangements, to make sure they are compliant going forward.

NIL Education

The updated guidance underlines the importance of NIL-related education for all stakeholders. Schools are permitted to provide NIL-related educational sessions for student-athletes, “NIL entities (e.g. Collectives),” boosters and prospective student-athletes. Permitted educational sessions for student-athletes expressly include financial literacy, taxes, entrepreneurship and social media.

Institutional Support for Student-Athlete NIL Activity

Schools are allowed to play an active role in facilitating and supporting their enrolled students’ NIL activities, such as by referring NIL activities to their student-athletes, engaging third parties (including collectives) to administer an NIL marketplace or inform student-athletes of NIL opportunities, providing student-athletes information about NIL leads, and introducing student-athletes to NIL entities.

Schools may provide stock photos, video and graphics to student-athletes and NIL entities. This appears to allow student-athletes to use content that includes school logos and uniforms in NIL deals, which enhances the value of endorsement engagements.  

Additionally, schools are allowed to actively promote student-athlete NIL content, such as by retweeting or liking social media posts. Schools may also display or promote NIL content on a “paid platform,” such as an advertisement on a “video board,” provided that the student-athlete or NIL entity pays the “going rate” for the promotion. Schools also may purchase NIL-related items that are de minimis in value and available to the general public at the same cost.

However, schools are not permitted to proactively assist in the development of NIL content or the implementation or execution of NIL campaigns, or to communicate with an NIL entity regarding a student-athlete’s compensation request or demand. Schools also may not provide support services (other than education) or access to equipment unless the same opportunity is afforded to nonathletes.

Institutional Support for NIL Entity/Collective

Schools are allowed to perform certain direct fundraising activities for an NIL entity, including facilitating donor meetings, requesting donations (but not for a specific sport or student-athlete), providing donor information, and selling sponsorship assets to the NIL entity at market rates. Schools may not, however, directly donate to or subscribe to the NIL entity, or provide assets to donors as inducement for donations.

Negotiating, Revenue Sharing and Compensating

Schools are not permitted to represent student-athletes or negotiate or secure NIL deals, or engage third parties to do so. Also, notably, institutions may not contract with a student-athlete for the sale of products related to a student-athlete’s NIL. This appears to restrict schools and student-athletes from offering codeveloped products and sharing revenues.

Enforcement for Past Activities

This updated guidance is effective as of the date of issuance, October 26, 2022. Schools will largely get a pass for past noncompliant activities. The guidance states that NCAA enforcement staff will only investigate past school conduct that is “clearly contrary” to the published interim policy, including the “most severe violations of pay for play.”

Going forward, the presumption will be that a school violated the NCAA Interim Policy if enforcement staff has information that indicates “impermissible conduct” occurred. To rebut the presumption, the school will need to clearly demonstrate that its actions were in compliance with the NCAA rules and Interim Policy.

The updated guidance provides important clarifications regarding certain current practices that might have been questioned under the NCAA Interim Policy, such as affiliations between schools and collectives and direct school support and promotion of student-athlete NIL activities. However, many key considerations remain open to interpretation or unaddressed, especially in a rapidly evolving marketplace. Schools should take into account the guidance and any applicable state NIL law as they re-examine current practices and develop future plans.

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