What is NIL? Everything to know about the NCAA rule allowing college athletes to get paid

What is NIL? Everything to know about the NCAA rule allowing college athletes to get paid

Caroline Bynum3 months
Aritcle written by:Caroline BynumCaroline Bynum

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On3 NIL U

NIL legislation has transformed the college sports landscape. But what is NIL? The Supreme Court, NCAA, and student-athletes all played a role in the new compensation rules.

Student-athletes can be paid for their autograph, developing their own merchandise, promoting products or services, and event appearances due to their personal celebrity. Now, athletes are starting their own brands, endorsing brands, and becoming their own brands.

On3 Founder, Shannon Terry, understands the huge influence NIL now plays in the sports landscape, and the biggest impact it makes on student-athletes.

What Does NIL Mean?

NIL stands for name, image, and likeness. The definition of NIL is simple: It is the possibility of compensation paid to NCAA student-athletes to promote, partner, or represent brands.

The mutually beneficial relationship is built off the athlete’s fame in order to grow a business. Previously, NCAA athletes were forbidden to profit off of their celebrity and fame.

NIL Timeline: How Did We Get Here?

September 30, 2019

  • California legislation is introduced that will prohibit schools from punishing student-athletes who profit from endorsements, beginning in 2023. The NCAA considers this a threat to amateurism.

October 29, 2019

  • The three NCAA divisions are directed to modernize their NIL rules by January 2021.

April 29, 2020

  • Group is appointed NCAA to give rule change suggestions.

June 12, 2020

  • Florida passes state NIL law that will go in effect July 1, 2021.

July 22, 2020

  • The NCAA president requests (again) for help creating a federal NIL law. Senators encourge the NCAA to increase their reform if they want aid.

September 24, 2020

  • A bipartisan federal NIL bill is introduced, co-authored by Anthony Gonzalez and Emanuel Cleavor. The proposed law provides restrictions on types of endorsements college athletes may participate in.

December 10, 2020

  • Senator Roger Wicker introduces legislation that allows some NIL deals and antitrust exemption. The exemption could protect the NCAA from some future lawsuits.

December 16, 2020

  • Supreme Court agrees to hear the NCAA’s appeal of the Alston v. NCAA antitrust lawsuit.

December 17, 2020

  • Senator Cory Booker and Richard Blumenthal call for overhaul of NCAA rules, in the hope that revenue sharing and further changes would be implemented.

January 11, 2021

  • The NCAA delays its vote on NIL rules for an indefinite amount of time.

February 4, 2021

  • Senator Chris Murphy and Lori Trahan introduce federal legislation that would create an unrestricted market.

March 31, 2021

  • The Supreme Court hears arguments in the NCAA v. Alston lawsuit.

June 18, 2021

  • Six conferences propose individual schools become responsible for NIL policies. In a letter obtained by ESPN, the conference heads declare that previous NCAA proposal changes would cause “inevitable confusion, uncertainty and likely litigation against the NCAA and its member conferences and institutions.”

June 21, 2021

  • The Supreme Court rules against the NCAA in the Alston Decision, in a unanimous 9-0 vote. The decision opens up further ways for student athletes to be compensated. Justice Neil Gorsuch, who delivered the court’s opinion, explained the NCAA was violating antitrust law.

June 30, 2021

  • The NCAA board of directors adopts a temporary change to allow NIL activity to occur legally. Schools and insitutions are instructed to create policies to explain specific guidelines to college athletes.

July 1, 2021

  • NCAA new rules go into affect and as the clock strikes midnight, student-athletes start signing NIL deals, beginning to profit on their name, image, and likeness.

Supreme Court and the NCAA: The Alston Decision

The Supreme Court decision in the National Collegiate Athletic Association v. Alston et al. case determined that the NCAA was violating antitrust laws by restricting athlete compensation. The lawsuit, heard on March 31 and decided on June 21, 2021, opened up opportunities for student-athletes to profit on their name, image, and likeness.

In the court’s decision, Judge Gorsuch discusses the history of previous complications in detail. “From the start, American colleges and universities have had a complicated relationship with sports and money.”

The court scrunitized the justifications for the restraints NCAA placed on student-athletes, in particular.

A common argument in collegiate athletics in the discourse of amateurism versus professional play. In brief, amateurs are understood as those who do not profit off of their athletic performance. NCAA long argued that college sports fans and consumers demanded amateur play on the collegiate level. The court, though, noted that the NCAA “nowhere defines the nature of the amateurism they claim consumers insist upon.”A

The NCAA claimed to “maintain amateurism in college sports as part of serving [the] societally important non-commercial objective” was denied. But due to the NCAA institutions aim to maximize revenue, that argument was denied.

The Supreme Court states it is in agreeance with the Ninth Circuit. “The national debate about amateurism in college sports is important. But our task as appellate judges is not to resolve it. Nor could we. Our task is simply to review the district court judgment through the appropriate lens of antitrust law.”

In addition, Judge Kavanaugh filed a concuring opinion, stating, “Price-fixing labor is price-fixing labor. And price-fixing labor is ordinarily a textbook antitrust problem because it extinguishes the free market in which individuals can otherwise obtain fair compensation for their work.” He finishes the statement: “The NCAA is not above the law.”

State and School Rules Around NIL Vary: What to Know

While the Supreme Court and NCAA passed Name, Image, and Likeness into affect, schools still have their own specificities around the new rule.

One of the most important hurdles for student-athletes now is to use these guidelines properly. That is to say athletes must understand how the state they play in or school they attend may affect the way they can utilize now-legal NIL rules. Rules on school logo restrictions, what products may or may not be sponsored, as well as other guidelines, differ from state and school.

Athletes are also expected to inform universities of NIL deals and contracts they decide to engage in.

Read further about the rules and policies in your state.

What is next?

Following the decision, potential action has been passed to the hands of student-athletes. How will you use this new legislation in your best interest? What is NIL going to do for your brand, and how do you intend to best sell yourself, now that the options are available?

While everyone continues to explore this new world of potential profit, many student-athletes are finding unique ways to stand apart from the pack. Social media and personal branding are now more important than ever. And this is just the beginning. NIL is undeniably a fast-track to entrepreneurial growth for young student-athletes. NIL U is here to help give you the tools to best navigate NIL and, of course, win the brand deals.