On June 14, 2021, the governor of Texas signed Senate Bill 1385 into law amending Section 51.9246 of the Texas Education Code to permit student-athletes to be paid for the use of their names, images, and likenesses.  The law prohibits an institution from prohibiting a student-athlete from “earning compensation for the use of the student athlete’s name, image, or likeness when the student athlete is not engaging in official team activities….” An institution may not prescribe in a “team contract for an intercollegiate athletic program” that student-athletes are prohibited from using the student-athletes’ name, image, and likeness for “commercial purpose” when the student-athlete is not engaged in official team activities. Student-athletes may retain “professional representation” including “an attorney licensed to practice law in this state” relating to contracts and other legal matters relating to the use of the student-athletes’ names, images, and likenesses.

The Texas law, however, has certain restrictions.  Before entering into a contract, the student-athlete “shall disclose [the contract] to the institution”.  Additionally, student-athletes may not enter into contracts that 1) conflict with the student-athlete’s “team contract”, “institutional contract”, “policy of the athletic department”, or “provision of the honor code”; 2) in exchange for athletic performance or attendance at an institution; 3) compensation by the institution; 4) in exchange for property or intellectual property owned by the institution; and 5) endorse alcohol, tobacco products, e-cigarettes or other types of nicotine delivery, anabolic steroids, sports betting, casino gambling, a firearm the student-athlete cannot legally purchase, or sexually oriented business.  Any contract entered into by a student-athlete may not extend beyond the duration of the student-athlete’s participation in intercollegiate athletics.  If a contract submitted by a student-athlete is determined to be in conflict with a “team contract”, “institutional contract”, “policy of the athletic department”, or “provision of the honor code”, then the student-athlete (or his/her representative) shall “resolv[e] the conflict not later than the 10^th day after the date of the disclosure.”

Institutions shall require student-athletes to take a financial literacy and life skills workshop at the beginning of the first and third academic years at the institution that is at least five (5) hours in duration and includes information on “financial aid, debt management, time management, budgeting, and academic resources available to the student-athlete.”

The Texas law does not permit individuals, corporate entities, or other organizations to enter into contractual relationships relating to name, image, and likeness with a prospective student-athlete prior to enrollment at an institution.

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