In late July 2020, the governor of Nebraska signed Legislative Bill 646 (i.e., the Nebraska Fair Pay to Play Act”) into law permitting student-athletes enrolled in an institution of higher education in Nebraska to be paid for the use of their names, images, and likenesses, to hire representatives to represent student-athletes’ interests, and declaring that a student-athlete may not be compelled to forfeit his/her rights in order to participate in intercollegiate athletics.  Nebraska becomes the fourth state to enact legislation that permits student-athletes to accept compensation for their names, images, and likenesses (following California, Colorado, and Florida).  The law takes effect on July 1, 2023.

In most respects, the Nebraska act is similar to predecessor acts enacted in California, Colorado, and Florida.  In pertinent part, the act provides as follows:

• No postsecondary institution shall uphold any rule, requirement, standard or limitation that prevents a student-athlete from fully participating in an intercollegiate sport for such postsecondary institution because such student-athlete earns compensation for the use of such student-athlete’s name, image, or likeness rights or athletic reputation.
• No collegiate athletic association shall penalize a student-athlete or prevent a student-athlete from fully participating in an intercollegiate sport because such student-athlete earns compensation for the use of such student-athlete’s name, image, or likeness rights or athletic reputation.
• No collegiate athletic association shall penalize a postsecondary institution or prevent a postsecondary institution from fully participating in an intercollegiate sport because a student-athlete participating in an intercollegiate sport for such postsecondary institution earns compensation for the use of such student-athlete’s name, image, or likeness rights or athletic reputation.
• No postsecondary institution shall allow compensation earned by a student-athlete for use of such student-athlete’s name, image or likeness rights or athletic reputation to affect the duration, amount, or eligibility for or renewal of any athletic grant-in-aid or other institutional scholarship, except that compensation earned by a student-athlete for the use of such student-athlete’s name, image, or likeness rights or athletic reputation may be used for the calculation of income for determining eligibility for need-based financial aid.

In turn, student-athletes are required to or prohibited from do the following:

• Student-athletes must disclose a copy of his/her contract for the use of his/her name, image, or likeness or athletic reputation to his/her postsecondary institution.
• Student-athlete may not enter into a contract for the use of his/her name, image, or likeness or athletic reputation that requires him/her to display or advertise the sponsor during official team activities and compliance with such contract would conflict with a team contract. Nothing shall restrict the student-athlete from being compensated for times when he/she is not involved in team activities.

Student-athletes may seek and obtain representation for the purposes of marketing his/her name, image, and likeness and the use of legal services associated therewith.  Agency agreements must contain the following:

• Amount and method of calculating consideration paid for such services;
• Names of individuals compensated under the terms of the agreement;
• A description of expenses reimbursed by the student-athlete;
• A description of the services provided to the student-athlete;
• The duration of the contract;
• The date of execution of the contract; and
• In conspicuous boldface type in capital letters state:

WARNING TO STUDENT-ATHLETE

(1) IF YOU ENTER INTO NEGOTIATIONS FOR, OR SIGN, A PROFESSIONAL SPORTS-SERVICES CONTRACT, YOU MAY LOSE YOUR ELIGIBILITY TO COMPETE AS A STUDENT-ATHLETE IN YOUR SPORT;

(2) IF YOU HAVE AN ATHLETIC DIRECTOR, WITHIN 72 HOURS AFTER ENTERING INTO THIS CONTRACT, BOTH YOU AND YOUR ATHLETE AGENT MUST NOTIFY YOUR ATHLETIC DIRECTOR; AND

(3)  YOU MAY CANCEL THIS CONTRACT WITHIN 14 DAYS AFTER SIGNING IT.

A student-athlete or postsecondary institution aggrieved by a violation of the act may bring a civil action against the postsecondary institution or collegiate athletic association committing such violation.  A prevailing plaintiff may recover actual damages, equitable or declaratory relief, and reasonable attorney’s fees and other litigation costs.  Such actions must be brought within one (1) year of accrual.  A public postsecondary institution may be sued upon claims arising under the act only to the extent allowed by the State Tort Claims Act, the State Contract Claims Act, or the State Miscellaneous Claims Act.

For any questions, feel free to contact Christian Dennie at cdennie@bgsfirm.com.