What is NIL? NCAA rules are changing regarding athlete pay. Here’s what it means

The NCAA will now allow Division-1 athletes to market their name, image, and likeness.Keith Srakocic/Associated Press

Beginning Thursday, the NCAA will allow its athletes to profit off their own personas — something they hadn’t been able to do in the past.

This will be the biggest change to college athletics since … well, possibly ever. It opens the floodgates on a new world of endorsements, compensation, and sponsored content on social media at a time when the NCAA’s hold on amateurism seems weaker than ever.

You may have seen the term “NIL,” which stands for “name, image, and likeness.” Rule changes will allow college athletes at every level to monetize their success with the use of their name, image, and likeness.

On Wednesday, the NCAA approved a recommendation to suspend its rules surrounding amateurism on an interim basis, according to the Athletic. This comes just in time, as seven states are enacting laws Thursday that will allow college athletes to make money.

Here’s an explainer:

What is the old NIL rule?

The NCAA has long prohibited athletes from accepting any outside money. It did this to preserve “amateurism,” the concept that college athletes are not professionals and therefore do not need to be compensated. The NCAA believed that providing scholarships and stipends was sufficient.

Now, athletes will have no major restrictions on how they can be compensated for their NIL. In the past, athletes could be suspended or lose eligibility if they violated the rules.

Why is it changing?

Let’s go back to 2019, when California passed a law called the “Fair Pay to Play” act.

Ed O’Bannon (whose lawsuit against the NCAA in the early 2010s prevented the organization from licensing the likenesses of its athletes for commercial purposes) and LeBron James sat next to California’s governor, Gavin Newsom, as he signed a bill into law that made it illegal for state schools to prohibit athletes from making money off their name, image, and likeness.

The law, which is scheduled to be enacted in 2023, supersedes any rules set by the NCAA.

In the years since California’s legislation, 19 states have passed their own NIL laws. In seven of them — Alabama, Florida, Georgia, Kentucky (by executive order), Mississippi, New Mexico, and Texas — it became law Thursday. Arizona will follow in mid July.

Five states (Arkansas, Michigan, Nevada, South Carolina, and Tennessee) will enact laws in 2022. Nebraska and Oklahoma will have laws no later than 2023, with a school allowed to implement its own rules at any point before then. Colorado, Maryland, and Montana will join California in 2023; New Jersey will follow in 2025.

Thursday’s rule change is an effort to preempt these laws and bring the NCAA’s own guidelines in line with state law.

The NCAA had been lobbying Congress to pass a nationwide NIL law to avoid the state-by-state patchwork that was falling into place, but that didn’t come to fruition by July 1.

Had the NCAA not changed the rule in some form, schools in eight states with new laws this year would gain a significant edge when it comes to recruiting athletes. It would be a lot easier to recruit a Division 1 swimmer on going to school in Florida than, say, Michigan, because the athlete could profit immediately.

How does an athlete market his or her NIL?

Athletes will be allowed to make money off their celebrity. Some examples include:

▪ Sponsored social media posts or advertisements

▪ Sponsored videos on Twitter and YouTube

▪ Training lessons and summer camps

▪ Autograph and merchandise sales

A football player could receive a free meal in exchange for a Twitter post about a local restaurant. A volleyball player could accept a gift from a makeup brand in exchange for sharing it on Instagram. A field hockey player can use their face and name to recruit young athletes to a skills camp.

Those are just some examples. Athletes also will be allowed to hire agents to help them navigate the new NIL world.

What is not changing?

This does not affect the rules about choosing a school. Translation: Athletes will not be allowed to accept payments or kickbacks for choosing one football program over another. This is simply for third-party deals.

There will still be stipulations, many on a school-by-school basis. Schools will need to decide whether an athlete can sign a deal that competes with a preexisting university deal. For instance, will Boston College allow a football player to sign a deal with New Balance, even though the team is sponsored by Adidas?

Athletes will not be able to use their university logos and trademarks in advertisements. So if you see a BC women’s lacrosse player hosting a summer camp but not wearing the soaring eagle, that’s why.

What are some examples of where we’ll see this?

It’s already happening. On Monday, Wisconsin quarterback Graham Mertz released a promo featuring his own trademark, a combo of his initials on a red background similar to the Badgers uniforms.

Coming soon... pic.twitter.com/XDhapgrRrr

— Graham Mertz (@GrahamMertz5) June 28, 2021

While top-tier football and men’s basketball players will likely get the largest share of the money — because they’re the most visible — this could be a boon to the Olympic sports that make up the bulk of Division 1 athletic programs.

Remember Katelyn Ohashi, the UCLA gymnast whose floor routine went viral? She didn’t earn a single cent off of that fame, even though it was viewed more than 100 million times and she briefly became a household name. With the new NIL rules, Ohashi could have signed any number of endorsement deals or accepted sponsorships on her social media platforms.

Katelyn Ohashi had to turn down endorsement deals after going viral for her floor routine at UCLA.Ben Liebenberg/FR171658 AP via AP

On a local level, you could see a standout hockey player at UMass Amherst host a summer camp at a nearby rink and pocket the registration costs.

The Washington Post highlighted five athletes who aren’t household names but who have high earning potential under new NIL rules, including twin women’s basketball players at Fresno State (a non-Power Five program) who have 3.3 million TikTok followers but have had to turn down endorsement deals and free products.

What do critics say?

When states began passing laws to prohibit the NCAA from punishing players who profit off their own name, image, and likeness, it was only a matter of time before the organization would have to change.

NCAA president Mark Emmert and other leaders had long argued that blurring the lines between amateur and professional athletes would have negative consequences. The NCAA claims that consumers enjoy college sports precisely because they are not professional. In their view, it’s about the love of the game and the alma mater, not the money. There are also deep concerns that allowing NIL profit could throw off the competitive balance.

But when states began to pass laws, the NCAA’s hand was forced.

So, this is it, right? The new rule is in place and things are ready to roll?

There are still plenty of issues to work through. An influx of money in the pockets of college athletes creates an influx of middlemen — the fixers, the brands, and the ambassadors who want a cut. Sports Illustrated reported that most athletes won’t make enough money to hire an agent, so they’ll end up working with a “digital marketplace” to find endorsements. That’s a space with little regulation.

Some schools are already establishing programs to help their charges prepare for changing laws. At Nebraska, the athletic department launched education and support for its athletes. Opendorse, the leading digital marketplace for college athletes, was founded by two former Cornhusker football players and is based in Lincoln.

What does this have to do with last week’s court ruling?

The Supreme Court ruled last week that the NCAA cannot restrict a school’s spending on an athlete’s education. It confirmed a lower-court ruling that Division 1 football and men’s and women’s basketball programs are required to pay for things like study-abroad programs and new computers.

On paper, that unanimous ruling is limited. But it showed how the nation’s top court views the NCAA’s longstanding belief that its athletes cannot be compensated because it would impact the integrity of college athletics.

The NCAA has long argued that amateurism is crucial to its mission, which has allowed it to avoid litigation under antitrust laws. But the ruling made the NCAA more vulnerable to losing cases regarding athlete pay in the future, according to The New York Times, because the judges indicated they weren’t buying the argument that the NCAA shouldn’t have to pay its athletes.

Regardless of what happens next in the courts, you’ll see the impact of the NIL rule changes right away. How this will affect the product on the field remains to be seen.