Last year, California created a seismic shift in college sports when Governor Gavin Newsom signed California's "Fair Pay to Play Act" into law. With the "Fair Pay to Play Act," California became the first state to allow college athletes to profit from their name, image, and likeness (NIL). Since California's passage of the "Fair Pay to Play Act," four more states have enacted similar legislation. Those four states are Colorado, Florida, New Jersey, and Nebraska. These states have made college athletes' name, image, and likeness rights the law of the land in their state while the federal government is considering a number of related federal bills.
Similarly, the NCAA is expected to announce their new guidelines and/or rules governing college athletes' ability to profit from their NIL in January of 2021. There is no doubt that changes are coming to college sports in regard to college athletes' ability to profit from their NIL. As such, college athletes and prospective college athletes need to be aware of the changes. Accordingly, here is a breakdown of the state laws that have been enacted granting college athletes the right to profit from their name, image, and likeness.
California's Fair Pay to Play Act
As mentioned, last year California became the first state to grant college athletes the right to profit from their name, image, and likeness with the "Fair Pay to Play Act." Beginning in 2023, colleges and universities in California will be prohibited from enforcing any rule that prohibits college athletes' ability to profit from their NIL. Accordingly, the NCAA will not be able to prohibit college athletes from participating in collegiate sports simply because they receive compensation for the commercial use of their NIL. Likewise, the NCAA will not be allowed to ban a school from collegiate athletic participation simply because one of its players receives NIL compensation.
Additionally, college athletes will be allowed to sign with agents. California's "Fair Pay to Play Act" did not come without some restrictions as college athletes may not enter into a contract with a provision that is in conflict with a provision of their team's contract. However, a team contract will not prevent a college athlete from receiving NIL compensation when the athlete is not engaged in official team business. The "Fair Pay to Play Act" only applies to college athletes attending a four-year college in California.
Colorado's Fair Pay to Play Act
On March 20, 2020, Colorado Governor Jared Polis signed Colorado's "Fair Pay to Play Act" into law. Like the California law, this law will not go into effect until 2023. Under the Act, college athletes in Colorado will be able to receive compensation for the use of their NIL without forfeiting their right to participate in intercollegiate athletics. College athletes will also retain their ability to receive athletic scholarships. Furthermore, no athletic association, such as the NCAA, will be allowed to punish a college or university if the school's athletes receive NIL compensation.
Like the California Act, Colorado's Act is not free from limitations. Like California's "Fair Pay to Play Act," Colorado's "Fair Pay to Play Act" prohibits college athletes from entering contracts that conflict with their team's contract. However, any team contract that is entered or modified after the effective date of Colorado's "Fair Pay to Play Act" may not prohibit college athletes from the commercial use of their NIL when engaging in unofficial team events or activities. Additionally, college athletes who enter into NIL compensation contracts must report the contract to their athletic director within 72 hours of entering the contract or before the next scheduled athletic event, whichever occurs first. The Act also prohibits schools and athletic associations, such as the NCAA, from providing compensation to college athletes or prospective college athletes.
Furthermore, college athletes in Colorado will be able to hire individuals to represent their interests. Accordingly, a college athletes' eligibility will not be affected for obtaining such representation. However, any person representing a college athlete must be a licensed attorney. The Act purports that colleges and universities may sponsor on-campus athlete agent interviews. During the interview, the athlete's agent and the college athlete may discuss that agent's representation of them in marketing the college athlete's athletic ability or reputation. However, these interviews may also take place in an off-campus setting. Lastly, if college athletes are aggrieved by an action that their school or an athletic association, such as the NCAA, takes the athlete may bring an action for injunctive relief.
Nebraska's Fair Pay to Play Act
On July 21, 2020, the state of Nebraska enacted their "Fair Pay to Play Act." Pursuant to Nebraska's "Fair Pay to Play Act," college athletes in Nebraska will be allowed to profit from the commercial use of their name, image, and likeness. Colleges will not be allowed to uphold or enforce rules that prohibit college athletes from earning compensation for the commercial use of their name, image, and likeness. Furthermore, the NCAA will not be allowed to punish college athletes for earning NIL compensation. Similarly, the NCAA will also be prohibited from penalizing schools simply because the school's athletes enter a NIL compensation agreement.
Like Colorado's "Fair Pay to Play Act", Nebraska's "Fair Pay to Play Act" contains some limitations. Specifically, college athletes cannot enter agreements where compliance with the agreement would cause a conflict with a team contract. Furthermore, a NIL compensation agreement cannot require an athlete to display a sponsor's apparel or to advertise for a sponsor during official team activities. However, no team contract shall prevent a college athlete from receiving NIL compensation when the college athlete is not engaged in official team activities. Once a college athlete enters a NIL compensation contract, the athlete must report the contract to a designated official at their respective university.
Additionally, college athletes will be allowed to seek professional representation for assistance with obtaining and negotiating NIL contracts as the Act prohibits colleges and the NCAA from penalizing college athletes for doing so. Like Colorado's "Fair Pay to Play Act", Nebraska's "Fair Pay to Play Act" allows college athletes and colleges who may be aggrieved by a violation of the Act to bring civil action. Lastly, Nebraska's "Fair Pay to Play Act" is set to take effect on July 1, 2023. However, colleges in Nebraska can begin allowing their athletes to profit from their NIL at this very moment. Unfortunately, no school has taken advantage of that opportunity so far. The Act mandates that Nebraska colleges allow college athletes to profit from their NIL no later than July 1, 2023.
New Jersey's Fair Pay to Play Act
On September 14, 2020, the state of New Jersey enacted "The New Jersey Fair Pay to Play Act." The "New Jersey Fair Pay to Play Act" allows college athletes in New Jersey to profit from the commercial use of their name, image, and likeness. The Act prohibits four-year institutions from enforcing rules that prohibit college athletes' ability to earn compensation from the commercial use of their NIL. The Act mandates that a college athlete's scholarship shall not be affected by the athlete receiving compensation for the commercial use of their NIL.
Like the other "Fair Pay to Play Acts," the "New Jersey Fair Play to Act" does include some limitations. One limitation is that the Act prohibits college athletes from entering NIL compensation contracts with companies that promote adult entertainment, alcohol, casinos and gambling, tobacco, controlled substances, or firearms. The second limitation is that college athletes may not enter a contract if the contract contains a provision that conflicts a provision of their team's contract. However, a team contract cannot prevent a college athlete from using their NIL for a commercial purpose when not engaged in an official team activity. Additionally, college athletes in New Jersey will be allowed to seek representation from attorneys and agents. However, the attorneys must be licensed in New Jersey and the agents must comply with the federal "Sports Agent Responsibility and Trust Act."
Distinctively the "New Jersey Fair Pay to Play Act" goes a step further in that it prohibits four-year institutions in New Jersey from being a member of any athletic association, including the NCAA, that prohibits college athletes from profiting from the commercial use of their NIL. The Act also prohibits four-year institutions from being a member of an athletic association that precludes a college or university from athletic participation because their athletes receive NIL compensation. Lastly, the "New Jersey Fair Pay to Play Act" became effective immediately. However, the Act will not become applicable until the fifth academic year following the date of its enactment. Therefore, the Act will not become enforceable until 2025.
Florida's Intercollegiate Athlete Compensation and Rights
On June 12, 2020, Florida Governor Ron DeSantis signed the "Intercollegiate Athlete Compensation and Rights Act" into law. The "Intercollegiate Athlete Compensation and Rights Act" will allow college athletes in Florida to profit from the commercial use of their name, image, and likeness. Under the Act, colleges in Florida will not be allowed to uphold or enforce rules that prohibit college athletes from profiting from their NIL. Similarly, colleges in Florida will not be allowed to uphold or enforce rules that penalize schools for having college athletes who profit from the commercial use of their NIL.
Like the other "Fair Pay to Play Acts," this act does come with some limitations. College athletes are not allowed to enter a contract if the contract contains a term that conflicts with a term of their team's contract. However, the law does not address college athletes ability to commercially use their NIL outside of official team events like the aforementioned state laws address. College athletes must disclose all NIL compensation contracts to the designated official at their college. Additionally, any college athletes under the age of 18 must have any contract for NIL compensation approved. Moreover, college athletes in Florida will be allowed to seek professional representation by an agent or lawyer. However, the agent must be licensed and the attorney must a member of the Florida Bar in good standing. The duration of a contract for representation of a college athlete or for NIL compensation cannot extend beyond the athlete's participation in a athletic program at their respective college.
Distinctively, the "Intercollegiate Athlete Compensation and Rights Act" mandates that Florida colleges provide financial literacy training and life skills workshops for their college athletes. Specifically, the colleges will be required to provide a workshop including information concerning financial aid, academic resources, debt management, a recommended budget, and the time management skills necessary to be a successful student and college athlete. The colleges will be required to provide a minimum of 5 hours of training at the beginning of the college athletes' first and third academic years. Lastly, the "Intercollegiate Athletes Compensation and Rights Act" is set to take effect on July 1, 2021.
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