NCAA Rolls Out 2024 NIL Rules Enhancing Athlete Protections and Market Transparency

The National Collegiate Athletic Association (NCAA) recently introduced new Name, Image, and Likeness (NIL) rules that provide student-athletes stronger protections and more control over their personal brands when participating in collegiate sports.

At Gross McGinley, LLP, our sports attorneys help athletes, institutions, sports organizations, real estate professionals, and others in Pennsylvania with all aspects of sports law. We keep up on the latest developments in the industry and help protect the interests of both organizations and athletes. Here, we share some information about the new Name, Image, and Likeness (NIL) rules that benefit student-athletes.

What Are NIL Deals?

NIL deals are agreements in which college athletes are compensated for the use of their Name, Image, or Likeness. Historically, the NCAA had strict rules barring college athletes from profiting off their own name, image, or likeness while they were still eligible to compete. However, in recent years, some NIL rules have changed, giving college athletes the ability to earn additional income while they are still in school.

New NIL Rules

Slated to take effect August 1, 2024, the new rules allow athletes to pursue NIL opportunities without limitations imposed by the NCAA, conferences, or universities. These opportunities include endorsement deals, sponsorships, and other commercial activities. The rule also fortifies compliance with Title IX requirements.

Furthermore, as has always been the case since the inception of NIL, NIL deals must be independent and not tied to enrollment, performance, or team membership. Additionally, agreements with third parties can’t be contingent on continuing enrollment at an institution. New disclosure measures will also apply to third-party NIL service providers, such as sports agents, financial advisors, and athletic consultants.

Understanding the Details of the New NIL Rules

Student-athletes will be required to disclose to their universities any information on NIL deals that are $600 in value or greater within 30 days of entering the agreement. This entails providing contact information for all players involved, including third-party service providers. The documentation must contain the terms of the agreement (including services rendered), expiration date, compensation amount, and pay structure.

Schools will then supply NIL deal data to the NCAA biannually to build a database accessible to student-athletes. Although many states already require NIL disclosures, the NCAA’s new rule establishes a national requirement for sharing NIL deal data.

By August 2024, the NCAA will provide standardized contract requirements and aggregated data based on athlete-reported compensation to help determine reasonable rates for NIL deals. Provisions for voluntary registration for service providers and comprehensive NIL education for athletes also will be put in place.

NIL entities — which refers to third-party brands, companies, or individuals — will be prohibited from engaging or compensating prospective student-athletes for the use of their name, image, or likeness until athletes have completed certain requirements, such as signing a letter of intent to attend a college, attending a class, or practicing with the team.

Similarly, key changes to recruiting rules include limitations on the timing and communication between college coaches and athletes. The recruiting rules specify that any phone, text, email, or social media exchange between a coach and student-athletes (or their parents/guardians) is considered communication. These policies are designed to curb premature interactions during the recruiting process.

Managing Risk Exposure

Noncompliance with the NCAA 2024 NIL requirements can result in significant penalties for both institutions and individuals. The penalties for major violations vary, but can involve termination of employment, preclusion of post-season competition, and forfeiture of wins. Other enforcement remedies include disassociation from boosters and collectives, probation, fines, and reductions in scholarships and recruiting privileges.

To prevent fines and other disciplinary action related to the NCAA’s NIL rules, stakeholders, including student-athletes, universities, and third-party service providers must focus on five factors:

• Comply with state laws and NCAA policies: Stakeholders must be mindful of applicable state laws as well as NCAA policies related to NIL activities. This can prevent noncompliance that could result in repercussions for an institution’s athletic programs.
• Maintain documentation and records: Institutions should keep well-organized and complete records of all efforts to comply with NCAA NIL policies. This documentation can help refute presumed violations and demonstrate an organization’s commitment to compliance.
• Formalize an NIL compliance program: Organizations should develop, implement, and maintain NIL best practices and outline the goals and expectations of the institution. Presenting these goals and expectations keeps all involved parties informed.
• Conduct training and education: Staff, boosters, collectives, student-athletes, and their families should receive training on their NIL rights and responsibilities. Proper education about NIL money and rules can help to prevent rule violations.
• Monitor student-athlete activities: Responsible parties have a strong incentive to regularly monitor their own student-athlete activities to ensure compliance with NIL rules and regulations. Building a dependable, structured reporting process systemizes information capture and helps to ensure regulatory compliance.

Adhering to these measures helps stakeholders mitigate the risk of fines and other disciplinary actions associated with noncompliance with NIL rules. Sports lawyers experienced in NIL law can assist organizations and individuals with developing, implementing, and adhering to these measures and ensure all aspects of the new NIL rules are addressed.

Adjusting to an Intensified Regulatory Environment

With the NCAA strengthening regulations for transparency in the traditionally opaque NIL marketplace, organizations, and NIL collectives will need to adjust to a more rigorous regulatory environment. Best-in-class legal advice from seasoned sports attorneys can play a crucial role in this transition. Sports lawyers can develop and implement compliance programs, educate stakeholders, assist with contract review and negotiations, conduct due diligence on NIL service providers, advise on risk management strategies and institutional policies, and represent stakeholders in disputes or litigation.

Monitoring changes to NIL law and regulations at the state and federal levels and staying abreast of new NCAA policies will be crucial for maintaining compliance amid a rapidly evolving regulatory environment.

Contact a Sports Lawyer in Pennsylvania

Ever-changing NIL law can make compliance challenging. At Gross McGinley, LLP, our sports attorneys work collaboratively to provide forward-thinking legal solutions for clients. Our sports law firm enables organizations to stay on track with new developments in NIL rules and helps them implement measures that protect their interests.

We provide a wide range of legal services, including criminal defense, family law, business law, litigation, estate planning, real estate, and more. To schedule a consultation, contact us or call us at 610-820-5450.