Starting today, July 1, intercollegiate athletes in Florida are legally entitled to be paid for use of their name, image and likeness (NIL). The Sunshine State is among the first states to implement such legislation in the U.S., and the country will be watching to see how Florida navigates this seismic shift in college sports.
The University of Florida, the state’s flagship institution, released its NIL policy on June 24, 2021, setting a tone for the state’s other 60+ collegiate athletic programs. And while these guidelines — released a week before Florida’s NIL legislation takes effect — establish some boundaries for UF’s intercollegiate athletes, they raise a number of questions about the legal, regulatory and administrative gray areas for prospects, students and families of other athletic programs in Florida.
Sports attorney Malik S. Jackson counsels clients on NIL compensation matters, and breaks down some of the important questions student-athletes and families need to know moving forward:
Q: According to the University of Florida’s guidelines, any student-athlete compensation must be “within fair market value.” How is this determined?
A: According to Florida’s NIL statute , compensation must be commensurate with the market value of the authorized use of the athlete’s name, image or likeness. There is no singular way to determine whether an athlete’s compensation is commensurate, or equal, with the market value.
Remember, before July 1, 2021, any athlete that sought to earn any compensation for permissive use of their NIL was subject to ineligibility, scholarship loss and a team’s forfeiture of contests, among other punishments. Now, athletes may authorize the use of their NIL to e-sports, virtual environments, publishers, brands or even the local hair salon.
I predict intercollegiate athletes will use publicly available information on athletic director and coaches’ compensation structures for speaking engagements, autograph signings, hosting sports camps, sponsorships and endorsement deals to establish market value for intercollegiate athletes’ NIL. Another source for market value information are the rates for social media influencers to post sponsored advertisements or endorsements online. Once the NIL market develops, then legislators, regulators and administrators will have a better gauge on the market value for athlete NIL rights. Nonetheless, a market does exist where there are ready, willing and able counterparties to an agreement for NIL rights.
Q: It’s one thing to be compensated for one’s own name, image and likeness while advertising a brand or product, but what about the institution’s brand? May student-athletes wear uniforms or team logos while promoting something?
A: Yes, but this depends on the post-secondary educational institution a student-athlete attends in Florida. At UF, student-athletes must secure specified rights to use a mark, logo or the team uniform from Gator Sports Properties. Information on licensing agreements relating to retail products can also be sourced through the Collegiate Licensing Company. If an athlete wants to use athletic department facilities they will need to execute location agreements, waiver of liability forms and rental fee agreements. Liability forms and rental fees must be coordinated with the Operations Department.
Now, imagine each of the 60+ other athletic programs in Florida having similar processes. Ultimately, athletes should prepare to advertise a brand or product without any use of university or collegiate facilities, logos and marks. Many will view athletes’ use of institutional properties as payment for participation (“pay for play”) or an inducement to attend a particular institution. Athletes should err on the side of caution because universities have rights to their own NIL, as do athletes, and each must get the permission of the other to rightfully use.
Q: UF’s policy says student-athletes cannot enter into NIL agreements with “gambling/sports wagering vendors or any vendors associated with athletic performance enhancing drugs (PEDs).” With the growing popularity (and legalization) of sports gambling, as well as the gray areas of PEDs, how are student-athletes expected to navigate this territory?
A: I’m counseling interested parties to break up NIL deals into four categories and think of the particular athletic program for which she or he plays:
The first category is any NIL deal or agreement that is banned because it may be perceived as harming fair competition. For example, UF identifies gambling and sports wagering and vendors associated with athletic performance enhancing drugs as impermissible NIL subject matters and counterparties.
The second category is anything related to vices. For example, athletes should avoid alcohol, tobacco, cannabis and adult entertainment. This does not mean these subjects are banned; however, an institution will foreseeably assert vices-related subject matter, or counterparties, to be impermissible for many NIL agreements in Florida.
The third category is anything related to the particular business circumstances for an institution. For example, UF’s different athletic teams have apparel agreements with Nike or Jordan. Gatorade was created in Gainesville, too. Therefore, a UF athlete needs to think about the ramifications of entering into a deal with Adidas, Puma or Gucci, for example. Likewise, UF may frown on an athlete entering into an agreement with Powerade.
The fourth category is anything that is not within the first three categories. This is the broadest category and where most intercollegiate athletes should focus their attention.
Q: According to UF’s policy, student-athletes must disclose any NIL agreements to the athletic department within four days. Will this likely be a standard amount of time? What about the window of time for the university to reply to the student-athlete with any issues?
A: Whether Florida-based institutions will have a standard four-day NIL agreement disclosure period is unknown at this time. UF’s policy doesn’t say whether the four days an athlete has to disclose the agreement to UF includes weekends and/or holidays. It’s unrealistic to apply the same timeline for UF’s NIL policy to other athletic programs in the state because UF has almost unparalleled resources to implement NIL. Each postsecondary educational institution in Florida is statutorily required to have a process that explains the manner in which an athlete discloses NIL agreements to the school. Institutions are statutorily required to disclose to the intercollegiate athlete — or to her or his attorney or agent — each relevant contract term in the athlete’s NIL agreement that conflicts with the intercollegiate team contract.
Institutions will establish a reasonable timeline for an athlete’s disclosure of NIL agreements. UF has a four-day disclosure requirement for athletes to submit an executed NIL deal on Teamworks. Meanwhile, Florida State University utilizes the INFLCR app for athletes’ NIL disclosures; but, the university’s NIL policy does not state the deadline for an athlete to submit the NIL agreement. Notably, UF does not state when they will assert to an athlete, or her or his representative, whether or not the agreement is in conflict with a term of the intercollegiate athlete’s team contract. At this time there is no way to predict the amount of time institutions will take to assert a conflict with an athlete’s NIL agreement. Nonetheless, the institution is statutorily prohibited from adopting or maintaining a contract, rule, regulation, standard, or other requirement that prevents or unduly restricts an intercollegiate athlete from earning compensation for the use of her or his name, image, or likeness.
These ambiguities will be worked out in Florida’s NIL market beginning July 1, 2021. Undoubtedly, high school recruits and potential athletic transfers will take note of mandated institutional timelines to disclose NIL agreements and the timeframe an institution follows to assert a conflict with an athlete’s NIL agreement.
Q: Under this new law, student-athletes may profit from their name, image and likeness, but are they only eligible if they’re actively competing? What about if they’re still a student, but no longer playing their sport(s)? What about offseasons?
A: Under Florida’s NIL law, an agreement for NIL may not extend beyond the athlete’s participation in an athletic program at a postsecondary educational institution. The starting point for athletic participation in a collegiate program is somewhat unclear. Once a high school athlete signs the national letter of intent for a sport, then he or she is then subject to NCAA, college conference, and institutional rules. Yet, the signing student is probably still in high school and not enrolled in the institution.
Once an athlete enrolls — whether in the Summer A, Summer B, Fall or Spring terms — then it is obvious the athlete is a participant in an athletic program. Participation includes the offseason, and institutions will need to define the start and termination dates for athletic participation that makes an athlete subject to Florida’s NIL law.
In the event of an athlete’s suspension, removal and/or appeal of a decision that impacts athletic participation, there will need to be guidance from institutions regarding whether the athlete remains a participant. Language in NIL deals should be structured to terminate upon a date that absolutely falls within the participation period for an intercollegiate athlete. If an athlete stops participating in a sport, then the athlete needs to terminate any NIL agreements and choose whether to enter a new agreement not subject to Florida’s NIL statute. Anecdotally, many athlete NIL deals will be for a duration of a few months or less while the NIL market is established in Florida.
Q: Most, but not all, college students are over the age of 18. Are there any exceptions for athletes who are minors when they begin their college career?
A: According to Florida’s NIL statute, if an athlete is a minor, they must have any contracts for NIL approved by one of the twenty Florida circuit courts. Upon approval of the NIL agreement by the Florida circuit court, a minor must then disclose the contract in a manner designated by the institution with the athletic program in which she or he participates. For example, early-enrollees to college campuses are usually extremely talented minors. Parents and guardians need to understand NIL agreements operate differently for this subset of elite athletes while they are minor intercollegiate athletes in Florida.
Do you have specific questions about the name, image and likeness law in Florida? Wondering how you or your student can avoid legal landmines in this new frontier? Contact Malik at 904-359-7717 or mjackson@smithhulsey.com .
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