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A Playbook for Success: 10 Things Coaches Should Know in the NIL Era
What is NIL?
Numerous states (along with the help of the NCAA and Congress) have adopted legislation called the NIL agreement that allows athletes to profit off their Name, Image and Likeness attributes. Effective July 1st, 2021, the day finally came where college athletes could start to make money based on their Names, Images, and Likenesses. Importantly, student athletes cannot make money for their performance on the field (called “pay for play”), nor can they receive financial incentives to sign with or remain at a program. Instead, qualifying athletes may secure deals with companies to profit from use of their own right of publicity (name, image, and likeness), including:
- Autograph
- Developing/modeling clothing apparel
- Promoting products & services
- Making personal appearances
Check Your Bright Side: NIL Can Help Student Athletes
NIL income means fewer daily struggles and financial stressors:
- Lack of money will cease to be an issue
- Able to put food on table for family
- Afford gear for practices
- Afford travel expenses for games
Gives student athletes a platform for leadership and business development skills:
- Opportunities to be a role model for young athletes everywhere
- Build a sustainable social presence early
Social Media Provides NIL Opportunities Off the Field (for Students & Programs)
- Nearly three-quarters of all name, image and likeness activity in the college space comes from social media posts and content creation
- The social media category (influencers, content creation, brand promotion) accounted for 72% of commercial activity by college athletes. Endorsements were second at 10%, followed by appearances at 7%, instruction at 5%, merchandise sales at 4% and autograph signings at 2%.
- A report from marketing firm Captiv8 found that NCAA athletes who are online content creators with NIL deals are 12x more popular than their peer influencers.
- Advertisers, brands, universities, working with student athletes can get their messages out via student athletes social media accounts.
- Student Athletes’ social media presence = an organizational asset.
NIL Can Help High School & College Programs on the field
- Exposure for programs that have athletes executing NIL deals
- Talented athletes will want to attend schools with developed NIL networks to tap into same opportunities, resulting in more talent
NIL Is Reshaping Amateur Play (the Negatives)
Consequences of NIL in Youth Sports:
- Missing out being a kid, Not for the love of the game but for only monetary value;
- Not understanding the value of money until later in life, while parents are exploiting kids at young ages;
- NIL deals will only impact small percentage of talented athletes who are capable of learning business and marketing skills at an early age
- Coaches will cater to small percentage of families who have NIL deals so they can market themselves: Example (Coach puts NIL athlete that they trained on scouting brochures to bring in NIL athletes exclusively)
NIL Is Reshaping Amateur Play (the Positives)
Case study: Alyssa and Gisele Thompson
- Sister soccer players who attend Harvard-Westlake high school in LA were the first high schoolers to sign an NIL deal with Nike, which is a multi-year partnership
- Both players are committed to Stanford
- Both have expressed the true benefit of the deal is “having a platform for young girls to look up to and seeing girls closer to their age.”
Other Positives:
- Student athletes are using their NILs for social good, such as nonprofits, GoFundMe campaigns, philanthropy, etc.
Coaches Play an Important Role in NIL Era
- Coaches will step into the role of supporting athletes under increased pressure from parents (since money is involved earlier in the student’s sports career)
- Coaches should NOT negotiate NIL agreements for student athletes enrolled at the same school
- However, coaches have opportunity to (1) know what their support athletes and advise on who student athletes should reach out to for NIL help
Check Your Blind Side for Restrictive Regulations
Patchwork of Laws/Regulations
There are many different players in regulating NIL. You have (1) states passing laws, (2) college/university/conferences promulgating policies, and (3) regulatory bodies (like NCAA) issuing guidance. This means that student athletes (and coaches) should be aware of the NIL rules in the state where the school is located and know any school and conference-specific rules to understand what limitations they will have on NIL. Roughly half of U.S. states specifically allow NIL deals at the high school level. (See also NIL State Laws https://www.nilnetwork.com/nil-laws-by-state/); see also High School NIL: State-By-State Regulations https://biz.opendorse.com/blog/nil-high-school/ (highlighting the amateurism rules)
To help combat the patchwork of laws, here are some generally accepted principles:
- “Student-athletes can receive professional representation by an agent acting as a registered agent in the state or an attorney licensed to practice law in the state.
- Student-athletes can exploit their NIL rights in compliance with the state law where their school is located.
- Student-athletes attending a school in a state that does not have an NIL law can also exploit their NIL rights without violating NCAA rules.
- Participating in NIL-related agreements and activities does not impact a student-athlete’s athletic or scholarship eligibility.
- Student-athletes should report their NIL-related agreements and activities to their school.
- NIL agreements cannot be in conflict with existing team contracts.
- Schools, conferences, and athletic associations cannot compensate a student-athlete for use of their NILs.
- Schools may restrict student-athletes from participating in certain industries.
- NIL deals cannot constitute pay-for-play or constitute improper recruiting inducements.”
Beware of Certain Products/Services
Frequently-Banned Products that Students Should Not Endorse in NIL Deals
Student athletes are often prohibited from endorsing certain products and services, including:
- Alcohol, Bars and/or Nightclubs
- Tobacco products
- E-cigarettes or any other type of nicotine delivery device
- Cannabis-related enterprises (e.g., dispensaries, grow suppliers, seed companies, etc.)
- Anabolic steroids, Recreational Drugs & other banned substances
- Casino gambling/sports wagering
- Assault weapons and/or other related firearms
- A sexually oriented business
- Deals that conflict with an existing contract of the institution
Each state and/or institution will issue its own guidance. See example banned products in policies for University of Oklahoma and University of Texas at Austin. Universities may require disclosure of an NIL deal to the institution and prohibit a deal that violates its policies.
While there is not specific evidence of school districts at the high school level punishing a student for an NIL deal that goes against its policies, that doesn’t mean it couldn’t happen in this new and shifting space.
Beware of IP Infringement
Some policies prohibit student athletes from earning NIL-compensation in exchange for property owned by a university, like intellectual property (think: school name, school logos, uniforms or insignias). Same goes for state NIL laws regarding high school deals.
For example, a student athlete could not film an endorsement while wearing a longhorn hat under University of Texas policy without entering into a licensing or join deal that allows for trademark use.
About Kevin Christopher
Kevin is the founder and principal of Rockridge®, a 4x B Corp Best For The World and Real Leaders Top 150 global impact company. He is annually recognized as a SuperLawyer, and has received numerous professional awards ranging from Conscious Company Magazine’s Top Business Leader to the Federal Lab Consortium’s technology license Deal of the Year. He has been profiled in B the Change, Forbes, the Los Angeles Times, Sustainable Brands, and many other media outlets highlighting sustainability and technology leaders and is widely recognized for his thought leadership and initiatives at the nexus of impact and innovation.
Impact + Innovation Credentials
An entrepreneur-attorney, Kevin’s recently founded Quantiscope, a BARDA DRIVe accelerator launched AI company advancing ML enterprise models for drug discovery, as well as climate tech Calliope Bio, a computational synthetic biology company launched from the Nucleate Activator and advanced through the Berkeley Skydeck accelerator. Kevin’s entrepreneurship career began with Resolute Therapeutics, a CARB-X awardee developing a novel class of broad spectrum antibiotics.
As an ESG leader, Kevin is a 2050 Fellow at the Yale Center for Business and Environment (CBEY), and select member of the World Economic Forum’s Crypto Sustainability Coalition. Kevin founded Tennessee’s local B Corp network B Tennessee and served as sponsoring counsel to B Academics.
With a background in public-private partnerships, Kevin is a National Institutes of Health (NIH) RadX faculty member, and National Science Foundation (NSF) program evaluator for the Center for Bioplastics and Biocomposites (CB2) as well as the Carnegie Mellon Center for Quantum Computing and Information Technologies (Q-CIT).
Practice Areas
. Kevin’s practice areas include:
- patent and trademark prosecution, licensing and litigation;
- corporate law, with an emphasis on benefit corporations, socially responsible businesses and high-growth emergent companies;
- government contracts, with an emphasis on innovation funding;
- corporate and investor financing; and,
- technology commercialization.
Contact
To meet with Kevin Christopher, schedule an appointment through Calendly or email him directly at kevin@rockridgelaw.com.
