The NCAA Releases New Installment of NIL guidance Aimed at Institutional Support
On Wednesday, October 26, 2022, the NCAA released more guidance on NIL, focusing on Division I institutional involvement in current-athlete NIL activities. For the past year and a half, most Division I universities have attempted to keep up with their athletes in the NIL space by developing internal teams and services to assist their athletes on this journey. However, in light of this new guidance, these athletic departments may need to reevaluate the types of services they are providing to athletes to ensure they remain compliant.
The guidance severely curbed institutional support of athletes, but there is still room for institutions to provide well-needed and well-intended support. For example, universities are still permitted to work with third-party marketplaces and collectives that help athletes find NIL opportunities and can provide educational sessions to their athletes, but universities are not permitted to communicate with an NIL entity regarding a specific athlete’s request/demand for compensation.
The guidance clarifies that universities are not permitted to proactively assist in the development/creation, execution or implementation of a SA’s NIL activity unless the same benefit is generally available to the institution’s students. Further, while universities are permitted to give stock photos/videos/graphics to an athlete or NIL entity, they are not permitted provide services, like a graphic designer, or access to equipment, like graphics software, unless the same benefit is generally available to the institution’s students.
The guidance also addresses the issue of when athletes can benefit from NIL – and universities are not permitted to allow athletes promote their NIL activities while participating in athletic related activities (e.g., practice, pre- and post-game, press conferences). Universities are also allowed to promote athletes' NIL activities, provided the student-athlete or NIL entity pays the going rate for that advertisement or it is free (e.g., retweet).
With regard to involvement with collectives, universities are permitted to have staff members assist collectives by raising money and can ask donors to donate to collectives, so long as the request is not to a specific sport or athlete. Universities are also permitted to provide assets (e.g., tickets, suits) to collectives under a sponsorship agreement that is consistent with other sponsors, but are not permitted to provide tickets or suites to a donor as an incentive for providing funds to the NIL entity.
One particularly noteworthy takeaway from the new guidance is that athletics department staff or any individual acting on behalf of the athletics department are not allowed to represent, negotiate, or secure NIL deals for enrolled athletes. This, alone, is sure to lead to questions and gray area. And although this has not happened yet, the NCAA stated that revenue sharing between conferences and athletes is not allowed.
The NCAA did not take action with regard to using an independent, third party administrator to collect athlete disclosures of NIL activities, so individual universities are still responsible for collecting and maintaining those disclosures (if they choose or are required to do so by state law).
Though this guidance is likely still being processed, early impressions appear to be split. Some believe that it levels the playing field for those universities who might not have enough resources to compete with more resource-rich schools. Others believe that this approach will further stifle earnings opportunities for athletes, particularly now that institutional support has been curtailed to some degree.
Nevertheless, the NCAA guidance provides athletic departments some sense of direction – and maybe some sense of where the NCAA is willing to still put up a fight over its rule-making abilities
This is for informational purposes only. It is not intended to be legal advice and does not create or imply an attorney-client relationship.Download PDF