Weekly Column: A New State of NIL Management

In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column about The Ohio State University's new NIL structure that will help their college athletes secure deals.

You can read the full column below.

Name, image, and likeness (NIL) was supposed to be about college athletes ability to compete in the open marketplace for endorsement services to make additional money and potentially a living. NIL has indeed, in less than a year in action, done just that. Payments for posting information about brands and services by athletes has delivered in the millions.

Several models for NIL schemes have been presented. The first was state legislatures passing NIL laws that allowed athletes in school to profit by using their athlete-celebrity status to advertise products and/or create new ones through various business adventures. State laws then forced the NCAA’s hand to remove the prohibition against college athletes making a profit while in school. Once the NIL laws went live, in many states on July 1, 2021, college athletes immediately began to utilize their NIL to make money.

Non-college businesses then entered the NIL space to provide education and financial guidance. Agents, attorneys, and business managers were already in the athlete representation space as were social media companies acting as influencer platforms ready to welcome the new group of college athletes as creators and businesses. Then technology companies in the data and information space got involved to help broker deals, organize, and provide analytics on NIL deals.

However, questions remain as to how the NCAA will respond to NIL laws and whether a national set of rules will guide NIL policy as Power Five coaches have voiced concern over competition issues related to athlete recruitment and profit-making across these United States. College athletic departments have hired new compliance employees and purchased or created data collection and processing programs to monitor NIL dealmaking with the hope of avoiding pay-to-pay schemes, while streamlining the ability of college athletes to make money for providing an endorsement service. NIL continues to grow and as brands and college athletes obtain more experience and standards of doing business, the market share and industry will grow.

States still have limits when it comes to sin industry products and services like sports betting and alcohol and surely college programs individually have or will have prohibitions against such athlete endorsements while in school. There are still some calls from industry businesspersons that want to see a federal law for NIL that sets a standard or minimum thresholds. However, a federal law is unlikely considering the state rights focus in this constitutional republic and the vast state law already existing.

The last vestige, or maybe the latest twist, is whether college athletic departments would get into managing their student NIL accounts beyond compliance. That has now indeed occurred at The Ohio State University (OSU). The new athletic department employee(s) will be tasked with surveying and securing NIL deals for OSU college athletes while enrolled in school and playing sports.

The question going forward: will universities take a percentage of their college athlete NIL deals? An administrative fee of sorts? The aforementioned of course raises a host of questions. Is OSU now acting as an agent for their college athletes? Are their impropriety, legal, or ethical issues involved in universities securing profit-making endeavors for student athletes? Is this now pay-to-play? Are there employment or misclassification concerns or will there be a renewed call for unionization by college athletes? Lastly, will the university’s direct involvement with college athlete dealmaking bring the university back into a situation that California’s Fair Pay to Play Act sought to avoid—institutional control over athlete money-making ability off the field?

Compliance and institutional oversight is important, but there are clearly concerns with this new model, particularly in recruitment efforts as seemingly other university athletic departments will rush to hire similar NIL personnel as a marketing tool and incentive to enroll. There may indeed be a rush to the bottom (or top) versus what was meant to be an open market to help give college athletes the opportunity to learn business and make a profit. OSU’s efforts could indeed be setting a dangerous precedent in college athletics if lost in the move are the principles of NIL: give athletes the freedom to make choices, the experience to learn and gain wisdom, and an opportunity to make a profit. It could also provide needed oversight, but there will clearly be new legal issues in pay-to-play.

About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clientele in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.