NIL Important Do’s and Don’ts

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Until recently, college athletes like you were prohibited from receiving compensation for endorsing a product or service. Doing so would jeopardize your amateur status and eligibility under NCAA rules, and subject you and your university to severe penalties.

All that changed in a sudden and dramatic fashion in 2021. As a result of a change in NCAA policies, court decisions and laws passed by state legislatures (including Pennsylvania), college athletes can now be paid for using your “name, image or likeness”— often referred to as “NIL” -- to endorse a product or business. Your NIL includes not only your name and picture but also any nicknames or unique slogans or symbols that identify you.

But there are traps for the unwary and no uniformity among the laws of the various states. Congress, in conjunction with the NCAA, is expected to pass national guidelines for these endorsement deals. Until then, athletes must comply with their state’s laws and university’s own internal policies. Each state and each school may be different. You have to know the rules in order to play the game.

In Pennsylvania, where I am a professor at Temple University, here are some important “do’s” and “don’ts” when it comes to NIL and Temple student-athletes.

Do consider hiring an authorized professional to assist you in negotiating an endorsement deal. Pennsylvania law limits those authorized representatives to attorneys, registered sports agents, and certified financial advisors. You can try to go it alone, but one misstep can have catastrophic results. Consider getting good professional advice, not from family and friends, however well-meaning they may be.

Don’t even think about endorsing a business associated with alcohol, gambling, tobacco or e-cigarettes, prescription drugs, controlled substances (including cannabis) or adult entertainment. All state laws—including Pennsylvania’s—ban these from NIL deals, and any future national legislation from Congress is certain to do the same.

Do give advance notice to the designated representative at Temple University about a possible NIL contract. Universities have their own sponsors and are entitled to protect those relationships from conflicts. Advance notice also gives the university an opportunity to ensure that an athlete’s NIL contract complies with its own internal policies.

Don’t assume that only the star players in the most popular sports can cash in on NIL deals. Since the rules changed in 2021, athletes as diverse as women gymnasts and volleyball players and men’s lacrosse players have secured NIL deals, in addition to participants in the so-called “revenue sports”—men’s football and men’s and women’s basketball.

Do understand that Temple University is under no obligation to allow you to use its name or logo in any NIL deal. That is Temple’s own separate property, and you must receive permission to use it. But there are great opportunities for shared revenue that benefits both the athlete and university alike.

The Pennsylvania law and Temple’s policies on NIL are a complex set of rules that must be navigated with care. Watch for more information about this important topic on this website.

Professor Jacobsen is a Practice Professor of Law at the Temple University Beasley School of Law who teaches courses in Sports Law and International Sports Law. He co-owns businesses in the sports industry and has represented high profile professional athletes in sponsorship and endorsement deals.