At last, the NCAA has changed its policy on college athletes monetizing their name, image, and likeness, also known as their NIL. Who cares if the Supreme Court forced the NCAA’s hands in Alston v. NCAA, which didn’t directly address the issue but provided clear indicia that the Court intended to deal with the issue eventually? What matters is that college athletes can finally market their valuable NIL and enrich themselves while the NCAA is enriching itself during their college careers. But, of course, no benefit comes without its risks.
While many college athletes are represented with respect to their NIL by experienced agents who are either personally aware of important intellectual property issues or have legal departments which are, there are many other athletes who are either unrepresented or represented by people who may not be fully aware of these issues. Therein lies the risk. If the athletes aren’t aware of the potential IP pitfalls, and they are represented by agents or marketing managers who are likewise unaware of these risks, then who is to ensure those risks don’t become truly problematic for the athlete? Well, if this article achieves its purpose, it will enlighten at least some athletes and their representation and hopefully prevent them from stumbling over these issues.
Many companies, intentionally or unintentionally, have language in their contracts that would severely prejudice the athletes in the future. For example, and this is the most prevalent issue I’ve seen, many companies include language in the agreements that would grant the company a license “in perpetuity” to use the athlete’s NIL. But what does that mean in practical terms? It means that the company will pay whatever compensation is called for by the agreement to the athlete to license the athlete’s NIL, and once the agreement’s term has concluded, it will still be able to use the athlete’s NIL for its own purposes. Put another way, the company is only paying the athlete for the express term of the contract, but it will be able to use the athlete’s NIL forever. How is that fair? It’s not.
Other issues arise when the player is asked to provide a photo for the company to use or when the company takes one of the athlete’s photos off social media. The first issue arises when the player or the company uses a photo without owning the copyright or obtaining a license from the copyright holder to use the image for a commercial purpose. That is clear-cut copyright infringement, except when used in limited circumstances such as a transformative work. Another issue arises when the photo used by the company includes the school’s trademarks or trademarks from sponsors of the school, like the Jordan logo. If the player and/or the company do not have a license from the school or the sponsor to use those marks, that too is infringement. I don’t know about you, but I’ve seen both of these issues come up in these new advertisements, and it’s likely because the individuals involved aren’t used to considering these issues. But for those of us that deal with branding, licensing, and intellectual property, these are everyday issues that we’re constantly considering.
It’s really a matter of education. If the student athletes and their representation are made aware of these issues, it’s likely that there would be fewer problems. Unfortunately, only certain schools/states were prepared to educate the athletes because only about 20% of the states were legalizing monetization of NIL for college athletes. The others had no plans to do so because they lacked state laws permitting such behavior and superseding NCAA policy. It wasn’t until the NCAA changed its policy about two weeks before July 1—the date when all athletes were permitted to start monetizing their NILs. As a result, the large majority of the schools and their compliance departments were unable to timely educate the athletes on these pitfalls. However, I expect that will change as time passes and schools actually have time to generate their own policies to protect their student athletes from these dangers.
I will be doing a webinar on this topic next month, so keep an eye out and feel free to reach out for more information.