What is Name, Image, Likeness (NIL)?

Right of Publicity

In the United States the right of publicity refers to an intellectual property right that protects a person (usually worthy of recognition) against the misappropriation of their name, likeness, or other indicia of personal identity for commercial benefit. This is why main athletes receive endorsement deals. A company will pay an athlete for the right to use the athlete’s image or likeness to help promote their product. 

Unfortunately, there is no actual “right of publicity” codified by a federal statute. The closest thing is the federal unfair competition law which protects against false endorsements, association, or affiliation. Because of this some states have created specific laws/statutes that directly recognize the right of publicity. In those states you will also find ample case law upholding that right. The problem with states codifying the right to publicity is that each of them differ.  Some states have a very limited scope of the right while others expand the right to survive posthumously and others make the right inheritable or assignable. Consequently, an athlete must consider which state will have jurisdiction over any contract disputes or law suits involving a violation of their right to publicity. To address the inconsistent legal protections of the right to publicity, some athletes decide to trademark their names and/or likeness. 

NIL in Collegiate Sports

For the last sixteen years collegiate athletes have been fighting for their right to publicity so that they can capitalize on anything that identifies them. Collegiate sports have been a huge business generating hundreds of millions of dollars to now over a billion dollars in revenue each year. That number does not include the even larger value of television broadcast rights to air these sporting events. For decades universities and the National Collegiate Athletic Association (NCAA) have been raking in all the profits while using the athletes name, image, and likeness. Yet the collegiate athletes were prohibited from sharing in the profits. The reason: collegiate athletes were considered amateurs and therefore prohibited by law from receiving monetary compensation for the athletic accomplishments. At most NCAA limited collegiate athlete compensation to a full-ride scholarship.

In June 2021, the U.S. Supreme Court issued a decision that changed the landscape of collegiate sports and compensation for student athletes. In the National Collegiate Athletic Association v. Alston, No. 20-512 (June 21, 2021), the U.S. Supreme Court issued a unanimous decision in favor of the claimant Alston. The Court found that the NCAA restrictions on NIL for athletes violated antitrust laws. As a result, the NCAA were required to modify their rules and open the door for athletes to protect their own NIL. A month later, the NCAA permanently changed their rules to allow for athletes to profit off their own NIL.

Changes to the NCAA rules on NIL

1. Athletes can engage in NIL activities in compliance with state laws, and colleges can be a resource for NIL legal questions.

2. Athletes can use professional service providers to help navigate NIL activities.

3. Student-athletes in states without NIL laws can still engage in such activities without violating NCAA rules.

4. States, individual colleges and athletic conferences may impose reporting requirements.

However, the following items are prohibited when collegiate athletes enter into brand partnerships, sponsorships, or other deals involving their NIL.

1. Endorsement deals for alcohol or gambling

2. Deals without a quid pro quo.

3. Deals tied to performance/accomplishments.

4. Deals structured to induce recruitment to a specific school.

5. Deals between a school and athlete. Instead, deals should be through athlete and third party such as brands.

With New NIL Opportunities for College Athletes Brings New Problems

This massive change in the law has opened up tremendous opportunities for young athletes and they can achieve their dream of financial freedom much sooner. With the invention of social media, it is common for collegiate athletes to achieve levels of fame and influence that can make their NIL valuation in the millions. This will no doubt increase the likelihood of the athlete obtaining brand and sponsorship deals. But with all of these exciting possibilities, the young athletes must also consider all the obligations that come with it.

Taxes, contract review, compliance issues, and hiring advisors are a necessary part of a collegiate athlete using their NIL for commercial benefit. A collegiate athlete would be doing a disservice to themselves if they did not consult with an attorney familiar with NIL to review their contracts and investigate the possibility of trademarking their name or likeness. An attorney or CPA could keep the athlete financially on track and off the radar of the IRS for back taxes.

And that is where our law office comes in. If you have any questions on how we can serve you as a collegiate athlete because you would like to take advantage of your NIL, we would be happy to help.