The FTC Gets Into the College Athlete NIL Game

Beginning on July 1, 2021, NCAA athletes were able to start making money from deals that include their Name, Image, and Likeness (NIL). This was a major change. Previously, athletes who wanted to play for teams in the NCAA could not profit from their NIL without losing amateur status, and thus their opportunity to play. This change came about after states began passing NIL legislation and the NCAA lost 9-0 at the Supreme Court in the Alston case. NCAA v. Alston, 141 S. Ct. 2141, 2153 (2021). While the Alston case dealt with the NCAA's restrictions of education-related-benefits on an antitrust basis, and not specifically NIL, the opinion and concurrence broadly signaled that any subsequent cases dealing with the NCAA's restrictions of student compensation would be unlikely to end in the NCAA's favor. Thirty states have NIL legislation currently in effect, with six more bills set to go into effect by 2025. The laws and policies around monetizing NIL vary by state and school, and have left a patchwork for student athletes to navigate going forward.

As a result, the NCAA adopted an "interim" policy in late June 2021 in response to these laws going into effect, a lack of federal legislative action, and the outcome of Alston. The policy allows college athletes to profit from their NIL while maintaining their amateur status under the NCAA bylaws. This policy will stay in effect until federal legislation or new NCAA rules are adopted. But, it seems unlikely that a federal framework will be in place anytime soon. Though lawmakers have introduced six different NIL bills on a federal level over the last two years, most dying in committee, Congress has been unable to reach a compromise on the scope of such a bill. With this in mind, brands need to be aware of both the state laws and school rules that govern before entering into an agreement.