Mere hours before NIL laws in eight (8) states becomes effective and permits student-athletes to accept compensation for their NIL, the NCAA announced an interim name, image, and likeness policy.  The wording of NCAA Bylaw 12 has not yet changed, by the governing bodies of Division I, II, and III adopted policies that provide the following guidance to athletes:

• Individuals can engage in NIL activities that are consistent with the law of the state where the school is located. Colleges and universities may be a resource for state law questions.
• College athletes who attend a school in a state without an NIL law can engage in this type of activity without violating NCAA rules related to name, image and likeness.
• Individuals can use a professional services provider for NIL activities.
• Student-athletes should report NIL activities consistent with state law or school and conference requirements to their school.

In addition, the NCAA issued a Q&A document that addresses the information set forth below.  The Q&A document is buried in the NCAA NIL pages, so I have reproduced the questions and answers verbatim below:

1. What is a name, image and likeness activity?

It is an activity that involves the use of an individual’s name, image and likeness for commercial or promotional purposes.

2. What is the effective date of the interim NIL policy?

The effective date is July 1, 2021.

3. How long will the interim NIL policy remain in effect?

Until such time that either federal legislation or new NCAA rules are adopted.

4. What is the impact of the interim NIL policy on prospective student-athletes?

Prospective student-athletes may engage in the same types of NIL opportunities available to current student-athletes under the interim NIL policy without impacting their NCAA eligibility. NIL opportunities may not be used as a recruiting inducement or as a substitute for pay-for-play. Individuals are encouraged to consider state laws, if applicable, and the rules of any relevant amateur governing bodies.

5. Will compensation for NIL activities jeopardize a prospective student-athlete’s high school eligibility?

Given that rules vary by state, prospective student-athletes should consult their state high school athletics association regarding questions pertaining to high school eligibility.

6. Who is a professional service provider?

A professional service provider is an individual who provides third-party services to a prospective or current student-athlete. It includes, but is not limited to, an agent, tax advisor, marketing consultant, attorney, brand management company or anyone who is employed or associated with such persons.

7. Does the NIL interim policy permit individuals to use professional service providers in connection with their name, image and likeness activities?

Use of a professional services provider for NIL activities is permissible.

8. Are institutions permitted to arrange NIL opportunities for student-athletes?

A number of factors are relevant when institutions consider their possible involvement in arranging NIL transactions. During the interim NIL policy, the expectation is that schools and student-athletes will not use NIL transactions to compensate for athletic participation or achievement or as an improper inducement. Beyond NCAA principles related to pay-for-play and impermissible inducements, such involvement may also raise other issues—including potential application of state NIL laws, claims for contractual non-performance, Title IX issues, and employment issues—as to which campus compliance, Title IX, and general counsel staff can be consulted.

9. May an individual enter into an agreement regarding NIL with a professional service provider prior to July 1, 2021?

No. If an individual enters into an agreement regarding NIL with a professional service provider prior to July 1, 2021, they will jeopardize their amateur status and eligibility for intercollegiate participation in a particular sport and will be subject to student-athlete reinstatement.

10. Which state law is applicable to prospective student-athletes prior to enrollment?

The NCAA cannot provide guidance on issues of state law. The state you live in and the states where a prospective student-athlete may wish to enroll may have NIL laws with which you will want to be familiar. A prospective student-athlete may consult a professional services provider, contact the athletics compliance office of NCAA schools they may choose to attend, or research state law compliance requirements where they may wish to enroll. NCAA schools may also have specific NIL policies that should be considered.

11. What is prohibited under the new policy?

Subject to state law, the following is prohibited under the new interim policy:

• NIL agreement without quid pro quo (e.g., compensation for work not performed).
• NIL compensation contingent upon enrollment at a particular school.
• Compensation for athletic participation or achievement. Athletic performance may enhance a student-athlete’s NIL value, but athletic performance may not be the “consideration” for NIL compensation.
• Institutions providing compensation in exchange for the use of a student-athlete’s name, image or likeness.

12. Can individuals enter into NIL agreements with boosters?

Yes, provided the activity is in accordance with state laws and school policy, is not an impermissible inducement and it does not constitute pay-for-play.

13. Do other sections of NCAA Bylaw 12 outside of NIL still apply under the interim policy?

Individuals and institutions in states with NIL laws or executive actions with the force of law in effect: NCAA rules, including prohibitions on pay-for-play and improper recruiting inducements, remain in effect, but NIL activities protected by state law will not impact eligibility.

Individuals where there is no state law or executive actions: If an individual chooses to engage in an NIL activity, eligibility will not be impacted by NCAA amateurism and athletics eligibility bylaws, but other NCAA rules, including prohibitions on pay-for-play and improper recruiting inducements remain in effect.

14. Will an individual be required to report name, image and likeness activities to

their school?

The NCAA’s interim policy does not address this issue, but state laws and institutional policies may impose reporting requirements.

15. Can international student-athletes benefit from name, image and likeness activities?

Yes. International individuals are covered by the interim NIL policy; however, they may consider consulting with government agencies for guidance related to visa and tax implications.

16. How do I report NIL compensation for tax purposes?

Individuals should follow all applicable tax laws for reporting NIL compensation. Requirements may vary based on state and/or country.

17. How does the interim NIL policy impact a SAs athletic financial aid?

The interim NIL policy does not impact a student-athlete’s financial aid. Compensation, including NIL compensation, remains excluded from NCAA financial aid limitations.

18. Where can I go for questions regarding a specific NIL activity?

General information regarding NIL can be found here. Prospective and current student-athletes with additional questions should consult with the athletics compliance department at the NCAA school they attend or plan to attend. NCAA member schools with additional questions should submit an interpretation request in Requests/Self-Reports Online. Note: NCAA prohibitions on pay-for-play and improper recruiting inducements remain in effect; however, the national office will not interpret state or federal laws or institutional policies.

Pay special attention to Question No. 5 addressing prospective student-athletes.  Some of the state NIL laws address this issue (and some don’t).  The Texas law, for example, expressly states that high school athletes are not to be paid under the legislation.  State high school associations will govern legislation pertaining to high school student-athletes.

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