The NCAA’s Name, Image and Likeness Rights Reforms: Lecture Recap

Last Thursday evening, MSLA President Benji Batten and I attended a Name, Image and Likeness (NIL) rights seminar by Professor Marc Edelman (Professor of Law at the Zicklin School of Business, Baruch College, City University of New York). Professor Edelman was a tremendous speaker with a wealth of knowledge in the area of NIL in sports, so I wanted to share the key takeaways.

American College Sport:

Division One (the top-tier college athletic association sports in the American college competition) schools generate around $22 billion AUD in revenue annually. In comparison, the AFL had revenue of $20 million last year.

For those that don’t know, American college athletes are not paid athletes. So of this $ 22 billion, only 18.2% is returned to the athletes through scholarships, whereas in contrast, 35% is spent on administrative and coach remuneration.

Since the inception of college sports up until 1 July 2021, college athletes weren’t even allowed to profit off their names, image or likeness. As such, colleges have historically possessed free labour in the form of highly valuable young athletes. However, on 1 July 2021, the NIL rules within the NCAA were changed amid pressure from changing state laws, and student-athletes could profit from their own success through marketing and sponsorship deals.

NIL deals can range from small deals with local restaurants for a couple hundred or thousand dollars to 7 figure deals with big fast-food brands like Subway, clothing brands like American Eagle or video games made by companies such as EA Sports or 2K.

The Benefits of NIL reform:

College athletes have benefited immensely from NIL reforms. According to Professor Edelman, many college athletes live below the poverty line. But, on average, a Division One athlete makes about $4,500 a year in NIL income. This extra income allows students to go to the movies, go out for lunch with their friends or take someone on a date. All activities we take for granted.

Looking at the more lucrative NIL deals, which can reach into the millions, there are examples of players supporting their families by purchasing homes, cars or paying off debts. Some players buy their entire teams gifts through their NIL payments or are now able to fly their family and friends to important games all over the country.

Further, NIL deals are not just confined to individuals. In some cases, entire teams can sign contracts, enabling every player, not just the star, to receive payment. 

NIL reform has clearly improved the quality of life of college athletes.

During the proposal of the NIL reform, the NCAA raised significant concerns regarding the compensation that female athletes would receive compared to male athletes, arguing that women would receive less than men. Professor Edelman considers this a ‘myth.’ 

According to Professor Edelman, removing the beast that is American Football from the calculations, around 52% of all NIL deals are held by female athletes. Further, even without removing American Football, the top-earning college athlete is Oliva Dunne, a gymnast from Louisiana State University.

Room for improvement in NIL:

It would be incorrect to suggest that NIL has fixed the issues within college sports. Professor Edelman highlighted that one of his main concerns was in regard to the limited regulation surrounding sports agent law. Emerging from the positive NIL reforms are many self-proclaimed experts in NIL rights; many in their early 20s have little to no experience. These so-called experts do not have the athlete's best interests at heart. Instead, they are alleged to be purely concerned with the money they can skim from a NIL deal.

In addition, the elephant in the room of college sports has not left; athletes are still not being paid for their labour. Scholarships are certainly a form of remuneration, but as Professor Edelman rightfully pointed out, many of these athletes have to miss around 25-30% of the academic year. As such, college athletes aren’t exactly receiving a full education. College athletes deserve to be remunerated, given the revenue they create, and the professional level at which they compete and train. However, this must be transparent to allow fair competition across the NCAA.

Underground compensation has not been eradicated, and if anything, NIL has provided a new way for colleges to compensate players illegally. ‘NIL collectives’ exist at larger colleges, which are groups comprised of successful alumni whose aim is to compensate talented athletes handsomely through NIL. Therefore, there is nothing stopping schools from using companies or wealthy alumni as proxies to pay an athlete.

Ultimately, NIL rights have transformed college sports and empowered student-athletes. However, as Professor Edelman alluded to, there is, without a doubt, more space for reform within the area.

For those interested, please find a link below to a similar seminar presented by Professor Edelman recorded by the Iowa Innovation, Business and Law Centre: https://www.youtube.com/watch?v=c4jd7DNSvws