If you’ve followed college sports over the last few years, you have no doubt heard commentators, coaches, or athletes refer to the term “NIL” when discussing certain athletes or teams. Those involved with college sports use this term frequently, but what is “NIL” and how does it affect businesses and collegiate athletes? “NIL” is an acronym standing for “Name, Image, and Likeness” and as you may have guessed, it applies to an NCAA athlete’s ability to monetize the commercial use of their names, images, and likenesses. This practice was almost entirely banned by the NCAA for decades before the approval of the NCAA’s NIL policy in 2021. These recent NIL developments have completely reshaped the collegiate sports world in a very short amount of time, and have brought with them significant considerations for collegiate athletes and businesses navigating the college sports market.
History of NIL
While the approval of the NCAA’s NIL policy is a fairly recent development, the body of law surrounding the NIL has existed for decades and is even codified in many states. This body of law is known as the “right of publicity” and it focuses on the right of a person to control the commercial use of one’s name, image, and likeness. You may be wondering, if this body of law has existed for so long, why are we just now hearing about it and why is the NCAA just now doing something about it?
Since its inception, the NCAA had restricted the use of athletes’ rights of publicity in a fairly unchecked manner, to the growing disdain of many athletes, coaches, and sports fans. As this disdain began to boil over, many states, including Virginia, began introducing and passing legislation that prohibited schools from punishing athletes for monetizing their names, images, and likenesses. Virginia law specifically provides a sweeping ban on collegiate institutions and affiliated organizations prohibiting an athlete’s ability to receive compensation for the use of his or her name, image, or likeness, subject to a few narrow exceptions. Legislation like this forced the NCAA to reevaluate its restrictions on NIL policies or risk substantial damage to its organization and integrity as a whole, ultimately leading to the decision to modernize the NCAA’s NIL policy.
Legal Implications of NIL
It may seem obvious that changes in right of publicity law will carry significant legal implications, but those implications are more far-reaching than one might expect. The immediate effect is that NCAA athletes can now land marketing and endorsement deals just like professionals. This can enable college athletes and businesses to form long-term relationships and build entire marketing campaigns around the athletes while they are still in college. Such relationships rely heavily on written contracts and various other areas of business law such as royalty payments, profit sharing, or even product endorsements. If you can think of a potential legal concern that a business would face, NIL probably touches it in some capacity.
Outside of recruiting and business relationships, NIL also affects the world of civil litigation. The most obvious scenario occurs when someone misappropriates an athlete’s NIL rights by using the athlete’s NIL in a commercial manner, such as advertising, without the athlete’s consent. In years past, athletes could only recover limited monetary damages from this scenario due to the prohibition on monetizing an athlete’s NIL. The modern landscape, however, removes this barrier, thus allowing much greater remedies to be available. These athletes can now recover significant monetary damages relating to not only the profits an infringer makes by virtue of the infringement, but also the athlete’s lost licensing fees that would not have been available before. These remedies also scale with the popularity and notoriety of the athlete, meaning that a Heisman candidate athlete may now have a multi-million dollar lawsuit on his hands if someone were to violate his NIL rights.
NIL Liability Traps
In addition to the business and litigation effects of NIL, there are also areas that are rife with liability that athletes may not foresee. Specifically, there is a high risk that, by commercializing an athlete’s NIL rights, the athlete may inadvertently infringe upon the rights of another. For example, if someone photographs an athlete during a game, the athlete would be able to control the commercial use of his or her image, however, simply being the subject of the photograph does not grant the athlete rights in the photograph itself. Ownership of the photograph remains with the photographer or the photographer’s employer. If the athlete were to then use the photograph in an advertisement as a part of a NIL arrangement, both the athlete and the affiliated business could then be liable for infringing the copyright of the photographer, despite the fact that the athlete is in the photograph.
Collegiate sports are already saturated with all types of intellectual property. Whether in the form of trademarked school logos, copyright protected logos, or simply an athlete’s name, intellectual property is everywhere and more often than not, it does not all have the same owner. With that in mind, there is an ever-growing chance that these new NIL developments will inevitably lead to an increase in right of publicity and intellectual property related litigation. Such an increase in litigation will also no doubt come with much heavier scrutiny on the use and commercialization of athletes’ NIL rights.
First Amendment Considerations
While the new NIL policies have opened up huge new areas of potential commercial gain and potential liability, these areas are not unrestricted. Right of publicity law and NIL policies allow and encourage athletes to use their NIL rights in a commercial manner, but they also border closely with the first amendment’s protection of free speech and press. This means that while a person can control their NIL rights only when it comes to things like advertising, the first amendment will not always allow them to control such rights when the use concerns non-commercial matters. Consider the scenario where a newspaper uses an athlete’s name in an article about his performance in a game. While the athlete’s name is a protected part of his right of publicity, the newspaper’s use is not commercial in nature and thus the first amendment protects it.
On the other side of this coin, there is a significant chance that the reach of NIL regulations may themselves run afoul of the first amendment. As mentioned before, Virginia’s NIL law is subject to exceptions where an athlete cannot monetize the use of his or her NIL rights. These exceptions include the uses in association with alcohol, weapons, drug use, and gambling. While these exceptions are likely well intended, they appear to be content-based restrictions on the athlete’s speech. If this is the case, then restrictions like this on an athlete’s NIL rights may very well violate the first amendment. Given how new these laws are, it is difficult to say what challenges and interpretations they may face. Despite that uncertainty, it seems increasingly likely that constitutional challenges will be on the horizon as this body of law continues to develop.
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