Background
The first domino fell in late 2019 when Governor Newsom signed
The Fair Pay to Play Act into law.1
This was the first statute allowing collegiate student-athletes to
profit off their name, image, and likeness (NIL). Specifically, the
statute bars universities, athletic conferences and the NCAA from
preventing student-athletes in California from profiting off their
NIL. Despite the NCAA’s vigorous opposition initially, close to
30 states have since enacted similar legislation or have otherwise
legalized NIL deals in their own states.2 Moreover, last year’s unanimous
Supreme Court ruling in NCAA v. Alston may not have
reached the issue of NIL, but it did chip away at the NCAA’s
ability to regulate student-athlete compensation.3 Sensing the inevitably of its waning
grip over its NIL policies, the NCAA then committed to a dramatic
policy shift within days of the Alston ruling by
permitting all student-athletes to begin profiting off their NIL as
of July 1, 2021.4 Even if a state
has not yet passed NIL legislation, the NCAA policy change applies
nationwide and now brands can partner with student-athletes in
every state.
During the NIL era’s first six months, brands as big as Nike
jumped into the new advertising market to promote their products
and services, but most of the NIL deals have come from smaller
businesses partnering with student-athletes with local
followings.5 And nearly half of NIL
revenue has derived from brand promotions on student-athletes’
social media channels.6 While a
number of student-athletes qualify as macro-influencers (between
100,000 and 1,000,000 social media followers), many more qualify as
micro-influencers (between 10,000 and 100,000 followers).7 Depending on the specific consumer
demographic a company hopes to reach, partnering with a
student-athlete who qualifies as a micro or macro influencer can
provide a means of reaching that targeted audience.
How to Navigate the Changing Rules
As more…