Recent Changes in State Nil Law

Recent “name image and likeness” (“NIL”) legislation created a new market for goods and services that have never existed before in college athletics. College athletes now have unlimited potential to capitalize upon their NIL and develop their brands on their terms. Am understanding of the changes to state NIL law is needed to understand the future and risks associated with the current NIL landscape. 

• What is NIL?

From a legal perspective, the term “NIL” generally refers to an individual’s legal right to control the usage of their name, image, or likeness. NIL includes any trait of a person that serves to identify that person to an ordinary viewer or listener, including their name, signature, photograph, image, likeness, voice, or a substantially similar copy of any of the foregoing. Individuals have a legal right to protect their NIL from others who attempt to publish, print, display or otherwise publicly use a person’s NIL for trade, commercial, or advertising purposes, without consent.

• Changes in State NIL Law and Athlete Compensation
• Florida NIL Statute 

Following the United States Supreme Court decision in Alston, § 1006.74, Florida Statutes, became effective on July 1, 2021 and defined the scope of NIL for Florida institutions. Florida’s NIL Statute provides that participation in intercollegiate athletics should not infringe upon an intercollegiate athlete’s ability to earn compensation for her or his name, image, or likeness. An intercollegiate athlete must have an equal opportunity to control and profit from the commercial use of her or his name, image, or likeness, and be protected from unauthorized appropriation and commercial exploitation of her or his right to publicity, including her or his name, image, or likeness. 

•  Applicability of Florida’s NIL statute. 

The term “intercollegiate athlete” is a key term used frequently in Florida’s NIL statute. “Intercollegiate athlete” means a student who participates in an intercollegiate athletic program at a postsecondary educational institution. a state university, a Florida College System institution, or a private college or university receiving aid under chapter 1009. Thus, Florida’s NIL statue only applies to athletes who attend Florida colleges or universities. 

• Athlete Right to Usage of NIL in Florida
• 1006.74(2)(a), Florida Statutes, provides that an intercollegiate athlete at a postsecondary educational institution may earn compensation for the use of her or his name, image, or likeness. Such compensation must be commensurate with the market value of the authorized use of the athlete’s name, image, or likeness. Additionally, to preserve the integrity, quality, character, and amateur nature of intercollegiate athletics and to maintain a clear separation between amateur intercollegiate athletics and professional sports, such compensation may not be provided in exchange for athletic performance or attendance at a particular institution and may only be provided by a third party unaffiliated with the intercollegiate athlete’s postsecondary educational institution.
• School Limitations on NIL in Florida
• 1006.74(2)(b), Florida Statutes, provides that a postsecondary educational institution may not adopt or maintain a contract, rule, regulation, standard, or other requirement that prevents or unduly restricts an intercollegiate athlete from earning compensation for the use of her or his name, image, or likeness. 
• 1006.74(2)(c) provides that an entity whose purpose includes supporting or benefiting the institution or its athletic programs; or an officer, director, or employee of such institution or entity may not compensate or cause compensation to be directed to a current or prospective intercollegiate athlete for her or his name, image, or likeness
• Minors and NIL in Florida
• 1006.74(2)(f) provides that intercollegiate athlete under 18 years of age must have any contract for compensation for the use of her or his name, image, or likeness approved under ss. 743.08 and 743.09. § 743.08 and § 743.09 will require the NIL contract made by an intercollegiate athlete under 18 years of age to be approved by the probate division of the circuit court or any other division of the circuit court that has guardianship jurisdiction. 
• Athlete Limitations on NIL in Florida
• 1006.74(2)(g) provides an intercollegiate athlete’s contract for compensation for the use of her or his name, image, or likeness may not violate this subsection. To the extent the athlete were to enter into an NIL contract that did not comply with Florida’s NIL statute, the contract would be subject to all NCAA restrictions provided in its bylaws. 
• 1006.74(2)(h) prevents an intercollegiate athlete from entering into a contract for compensation for the use of her or his name, image, or likeness if a term of the contract conflicts with a term of the intercollegiate athlete’s team contract. 
• 1006.74(2)(i) requires an intercollegiate athlete who enters into a contract for compensation for the use of her or his name, image, or likeness shall disclose the contract to the postsecondary educational institution at which she or he is enrolled, in a manner designated by the institution. 
• 1006.74(2)(j) limits the duration of a contract for representation of an intercollegiate athlete or compensation for the use of an intercollegiate athlete’s name, image, or likeness may not extend beyond her or his participation in an athletic program at a postsecondary educational institution. 
• Georgia NIL Statute

Following Alston, O.C.G.A § 20-3-681 became effective on July 1, 2021 and defined the scope of NIL for Georgia institutions. Georgia’s NIL statute provides that intercollegiate athletic programs provide student athletes with significant educational opportunities. However, participation in intercollegiate athletics should not infringe upon the rights of student athletes to have control over and profit from the commercial use of their name, image, or likeness.

• Applicability of Georgia’s NIL statute

“Student athlete” is a key term used frequently in Georgia’s NIL statute. “Student athlete”  means a student enrolled at a school which is: (A) A unit of the University System of Georgia; (B) A unit of the Technical College System of Georgia; or (C) An independent or private college or university located in Georgia and eligible to be deemed an ‘approved school’ (pursuant to paragraph (2) of Code Section 20-3-411), who participates in or is eligible to participate in any intercollegiate athletic program at such institution. A person who is permanently ineligible to participate in a particular intercollegiate athletic program is not a student athlete for the purposes of such athletic program. Thus, Georgia’s NIL statue only applies to athletes who attend Georgia colleges or universities.

• Athlete Right to Usage of NIL in Georgia

O.C.G.A § 20-3-681(a) allows a student athlete at a Georgia colleges or universities to earn compensation for the use of his or her name, image, or likeness. Such compensation must be commensurate with the market value of the authorized use of the student athlete’s name, image, or likeness. Additionally, compensation may not be provided in exchange, in whole or in part, for a current or prospective student athlete to attend, participate, or perform at a particular postsecondary educational institution.

• Athlete Limitations on NIL in Georgia

O.C.G.A § 20-3-681(d)(1) A student athlete shall not enter into a contract providing compensation to the student athlete for use of the student athlete’s name, image, or likeness if a provision of such contract is in conflict with the student athlete’s team contract. “Team contract” means any written agreement between a student athlete and a Georgia colleges or universities, or a division, department, program, or team thereof, which includes goals and objectives, standards, prohibitions, rules, or expectations applicable to the student athlete.

O.C.G.A § 20-3-681(d)(2) requires a student athlete who enters into a contract providing compensation to the student athlete for use of the student athlete’s name, image, or likeness shall disclose such contract to an official of the student athlete’s postsecondary educational institution, to be designated by such institution. 

• School Limitations on NIL in Georgia

O.C.G.A § 20-3-681(c) prohibits Georgia colleges and universities from revoking a student athlete’s scholarship, or determining scholarship eligibility be adversely impacted, as a result of a student athlete earning compensation or obtaining representation as provided for in this article.

O.C.G.A § 20-3-681(f) prohibits Georgia colleges and universities, an entity whose purpose includes supporting or benefiting such institution or its intercollegiate athletic programs, or an officer, director, employee, or agent of such institution or entity from providing a current or prospective student athlete with compensation for the use of the student athlete’s name, image, or likeness. 

O.C.G.A § 20-3-681(g) prohibits Georgia colleges and universities from adopting or maintaining any policy, regulation, rule, standard, or other requirement that prevents a student athlete of such institution from earning compensation as a result of the use of such student’s name, image, or likeness.

O.C.G.A § 20-3-681(d)(4)(A) prohibits Georgia colleges and universities from having a team contract entered into on or after July 1, 2021, and required by a postsecondary educational institution, or a division, department, program, or team thereof, shall not include any provision which prevents or discourages a student athlete from receiving compensation for the use of his or her name, image, or likeness when the student is not engaged in official activities of the intercollegiate athletic program; provided, however, that such contract may provide for a pooling arrangement as provided for in subparagraph (B) of this paragraph (see below).

• NIL Pooling

O.C.G.A § 20-3-681(d)(4)(B) allows Georgia colleges and universities to have team contracts that may provide for a pooling arrangement whereby student athletes who receive compensation for the use of their name, image, or likeness agree to contribute a portion of the compensation they receive pursuant to such contract to a fund for the benefit of individuals previously enrolled as student athletes in the same postsecondary educational institution as such student athlete, provided that such pooling arrangement meets the following conditions: 

1. Student athletes shall not be required to contribute an amount equal to more than 75 percent of the compensation received for the use of their name, image, or likeness pursuant to this article; 
2. Each postsecondary educational institution shall establish only for the purposes of this paragraph an escrow account in any bank or lending institution subject to regulation by this state only;
3. All contributions from student athletes who receive compensation for the use of their name, image, or likeness shall be deposited in such escrow account by the athletic director of the postsecondary educational institution, or his or her designee;
4. Upon graduation or withdrawal for at least 12 months from the postsecondary educational institution, individuals who were student athletes prior to such graduation or withdrawal, shall be eligible to receive a pro rata share of the pooled contributions based on the number of months the individual was a student athlete; and

 

1. The postsecondary educational institution shall provide for the implementation of the provisions of this paragraph in a manner that does not discriminate against or treat differently individuals based upon race, gender, or other personal status protected by federal or state law. 

• Conference and NCAA Limitations on NIL in Georgia

O.C.G.A § 20-3-681(h)(1) prohibits any athletic association, athletic conference, or other similar organization which acts as an organizing, sanctioning, scheduling, or rule-making body for intercollegiate athletic events in which Georgia colleges and universities participate from preventing a Georgia student athlete from receiving compensation, or penalizing a Georgia student athlete for earning compensation, as a result of the student athlete earning compensation for the use of such student’s name, image, or likeness. 

 

O.C.G.A § 20-3-681(h)(2) further prohibits any athletic association, athletic conference, or other similar organization which acts as an organizing, sanctioning, scheduling, or rule-making body for intercollegiate athletic events in which Georgia colleges and universities participate from preventing a postsecondary educational institution from participating in intercollegiate athletics, or otherwise penalize a postsecondary educational institution, as a result of a student athlete earning compensation for the use of such student’s name, image, or likeness.

• Conclusion

Navigating the NIL landscape as an athlete, university, or school requires a careful understanding of the underlying legal authority spurring the recent NIL wave. State NIL laws have limited the prohibitions that can be placed on NIL compensation by schools or conferences, or NCAA. However, the NIL statutes passed by Georgia and Florida conflict with the United States Supreme Courts ruling in Alston with respect to the NCAA’s authority to regulate NIL compensation untethered to education. The potential still exists for the NCAA to potentially challenge state NIL law to reassert some control over the NIL marketplace that has developed recently.