By: Brittany Flaherty Theis and Harry Hitzeman
Beginning today, college athletes in Illinois will be able to sign agents and get paid for autograph signings, endorsing products, or appearing in advertising. Earlier this week, Governor J.B. Pritzker signed SB 2338, also called the “Student-Athlete Endorsement Rights Act,” (the “Act’) into law. This and similar laws cover rights commonly referred to as “NIL” rights, which stands for name, age, and likeness (and, generally, also includes voice).
The Act sets forth the definition of a “student-athlete” – defining student-athletes in a way that limits these opportunities to students currently enrolled at a postsecondary educational institution who are engaged in (or may be eligible to engage in) an intercollegiate athletics program. It also allows student-athletes to hire an agent. If a student-athlete obtains such representation, he or she must notify the school within seven days of entering into the agreement.
Compensation under such agreements can neither be conditioned upon athletic performance, nor used to induce attendance at a specific institution. These limitations apply to boosters as well as third party licensees, which means, under the Act, boosters cannot use goods or services as a carrot to entice a student to attend their school.
That said, tuition, room, board, books, financial aid, etc. provided in accordance with the rules of the applicable athletic conference; federal and State grants or scholarships unrelated to athletic participation; and payment for work performed by the student-athlete are excluded from the definition of “compensation” covered by the Act.
Endorsements for gambling and sports betting, controlled and performance enhancing substances, tobacco and e-cigarettes, cannabis, alcohol, and adult entertainment are prohibited by the Act. Also prohibited are endorsements for anything that is “reasonably considered to be inconsistent with the values or mission” of a college or university.
Similarly, postsecondary educational institutions can place limits on the dates and times that a student-athlete participates in covered promotional activities, including whether items may be worn during intercollegiate competition or events, and whether and how the institutions’ trademarks and logos can be used. For example, if a college has a contract with a sporting goods company, such as Reebok, Under Armor, or Adidas, the school can stop a student-athlete with an endorsement from a rival company from wearing equipment from that company during a college game or competition.
Proponents say the changes that ensure rights over a student-athlete’s name, image, likeness, and voice are needed to address the shifting landscape for college sports and can benefit athletes beyond just a football team’s star quarterback. For example, student-athletes can now charge for teaching lessons or running clinics, or receive pay if they ink an ad deal in their hometown.
Illinois is among more than a dozen states that will have similar laws taking effect this year.
Oklahoma and Nebraska have legislation in place now regarding a student-athletes’ NIL rights. In addition to Illinois, eight other states have similar laws taking effect on July 1. They are: Florida, Georgia, Ohio, Kentucky, Mississippi, New Mexico, and Texas, according to the businessofcollegesports.com
On July 23, Arizona’s law will kick in, and Connecticut will follow on September 1. NIL rights laws in Arkansas, Michigan, Nevada, South Carolina, and Tennessee will start sometime in 2022, according to the website’s legislation tracker.
Nationally, there is no standard for student-athlete compensation, although numerous bills are pending in Congress. The U.S. Supreme Court has not directly addressed the issue. The NCAA is expected soon to consider an interim NIL policy. Questions about NIL laws in Illinois and abroad? You can contact Whitt Law Senior Attorney Brittany Flaherty Theis at email@example.com.