By Daniel Cundiff

College athletics has undergone a seismic shift.  For decades, athletes participating in Division I college athletics were unable to receive compensation for the use of their name, image, and likeness (“NIL”), and they risked becoming ineligible to participate in their sport for doing so.[1]  Today, National Collegiate Athletic Association (“NCAA”) guidelines allow student athletes to profit off of their NIL,[2] over half of states have enacted some form of NIL legislation,[3] and progress is being made toward federal NIL legislation.[4]

In National Collegiate Athletic Association v. Alston,[5] the United States Supreme Court provided a push for the NCAA to change course with respect to NIL rules.[6]  While the majority of the Court avoided the question of NIL on review,[7] Justice Kavanaugh’s concurrence squarely attacked the issue.[8]  Justice Kavanaugh expressed doubt that the portion of the NCAA’s compensation rules that were unaddressed by the majority (including NIL) were legally valid, stating that “[t]he NCAA’s business model would be flatly illegal in almost any other industry in America.”[9]  Finally, seeing potential difficulties in changing NCAA compensation rules through litigation, Justice Kavanaugh proposed that the issue could be resolved through either legislation or collective bargaining by the student athletes themselves.[10]  In any event, the writing was on the wall for the NCAA, which decided to take action.

Just nine days after the Alston opinion, on June 30, 2021, the NCAA announced a change to its compensation rules that allowed student athletes to profit from their NIL beginning the next day.[11]  Now, student athletes in states that have passed NIL legislation “can engage in NIL activities that are consistent with the law of the state where the school is located.”[12]  Further, student athletes in states without NIL legislation “can engage in this type of activity without violating NCAA rules related to name, image and likeness.”[13]  So long as it is consistent with applicable law, student athletes can also engage a professional service provider for NIL activities.[14]  At least for the time being,[15] gone are the days of students being forced to choose between NCAA eligibility and compensation for their NIL.[16]

Today, twenty-eight states have passed NIL legislation with varying nuances and restrictions.[17]  Common restrictions include prohibiting contracts from extending beyond the time an athlete participates in sports at a particular institution,[18] directly tying compensation to participation,[19] otherwise known as “pay-for-play,”[20] and allowing institutions to restrict athletes’ use of team logos for personal NIL activity.[21]  Moreover, some states prohibit specific industries from contracting with student athletes.[22]  Prohibited industries include adult entertainment, alcohol, tobacco, and firearms.[23]  Other states, favoring a more ambiguous approach, prohibit all industries that “negatively impact[] the reputation or the moral or ethical standards” of the institution.[24]

North Carolina is poised to be a key player in NIL based on its position in college sports.  Home to Duke University and the University of North Carolina at Chapel Hill, each with multiple NCAA basketball championships,[25] and the current top two football teams in the Atlantic Coast Conference (“ACC”)—Wake Forest University and North Carolina State University[26]—the State has the potential to attract top-flight high school talent to its institutions.  Roy Cooper, the Governor of North Carolina, signed an Executive Order regarding NIL on July 2, 2021, providing guidance on the future of NIL in the state.[27]  Student athletes in North Carolina can now “earn compensation, and obtain related representation, for the use of their name, image, and likeness while enrolled at the institution, and such compensation and representation . . . shall not affect a student-athlete’s scholarship eligibility.”[28]  Restrictions include prohibitions against the use of NIL contracts “as a direct inducement to enroll . . . at a particular institution.”[29]  Further, the institutions themselves may not compensate student-athletes for use of their NIL.[30]  Similar to Mississippi,[31] institutions in North Carolina “may impose reasonable limitations or exclusions on the categories of products and brands that a student-athlete may receive compensation for endorsing” when the institution “reasonably determines that a product or brand is antithetical to the values of the institution or that association with the product or brand may negatively impact the image of the institution.”[32]  Moreover, as is the case in Illinois,[33] an institution in North Carolina “may limit a student-athlete’s compensation for their name, image, and likeness as it pertains to use of the institution’s intellectual property,” and the Executive Order does not give “any student-athlete the right to use the name, trademarks, service marks, symbols, logos or any other intellectual property that belong to an institution, athletic conference, or athletic association.”[34]  Finally, in anticipation of an influx of NIL compensation for student-athletes, “[p]ostsecondary educational institutions are encouraged to provide financial literacy and life-skill programs to their student-athletes.”[35]  Therefore, Governor Cooper’s Executive Order provides the framework for NIL dealings in North Carolina, though this is unlikely to be the end of the issue.

Beyond state legislation, Senator Roger Wicker of Mississippi declared that there is “broad consensus” that the federal government should pass NIL legislation, which would unify the various restrictions of states under one common federal standard.[36]  Even the President of the NCAA, Mark Emmert, called on Congress for a “federal framework.”[37]  Emmert and others claim that the current “patchwork” of state NIL legislation leads to confusion and an uneven playing field in college athletics.[38]  Therefore, while the current landscape of NIL in college athletics remains a variety of state laws and, in states without NIL legislation, NCAA rules, preempting federal legislation is likely to pass and reshape college athletics once again.


[1] See Matthew N. Korenoski, O’Bannon v. NCAA: An Antitrust Assault on the NCAA’s Dying Amateurism Principle, 54 Duq. L. Rev. 493, 497–98 (2016).

[2] Michelle Brutlag Hosick, NCAA Adopts Interim Name, Image and Likeness Policy, NCAA (June 30, 2021), https://www.ncaa.org/about/resources/media-center/news/ncaa-adopts-interim-name-image-and-likeness-policy.

[3] See NIL Legislation Tracker, Saul Ewing Arnstein & Lehr LLP, https://www.saul.com/nil-legislation-tracker#2 (last visited Oct. 20, 2021) (“To date, the 28 states listed below have passed NIL laws.”).

[4] See id. (“[T]he most recent NIL bill . . . suggests that there is continued interest in getting a federal law on the books.”).

[5] 141 S. Ct. 2141 (2021).

[6] See id. at 2167 (Kavanaugh, J., concurring).

[7] See id. at 2141–66.

[8] See id. at 2166.

[9] Id. at 2167.

[10] Id. at 2168.

[11] Hosick, supra note 2.

[12] Id.

[13] Id.

[14] See id.

[15] See Gregory A. Morino, The NCAA Declares Independence from NIL Restrictions, Foley & Lardner LLP (Aug. 20, 2021), https://www.foley.com/en/insights/publications/2021/08/ncaa-declares-independence-nil-restrictions.

[16] See Barret Sallee, UCF Kicker Ruled Ineligible after Refusing to Agree to Terms over YouTube Channel, CBS Sports (July 31, 2017, 5:05 PM), https://www.cbssports.com/college-football/news/ucf-kicker-ruled-ineligible-after-refusing-to-agree-to-terms-over-youtube-channel/ (Donald De La Haye, a former Division 1 NCAA football player, chose to quit football after the NCAA determined that De La Haye could not earn income from his NIL on athletics-based YouTube videos.).  

[17] Saul Ewing Arnstein & Lehr, supra note 3.

[18] See, e.g., Fla. Stat. Ann. § 1006.74(2)(j) (2021) (“The duration of a contract for representation of an intercollegiate athlete or compensation for the use of an intercollegiate athlete’s name, image, or likeness may not extend beyond her or his participation in an athletic program at a postsecondary educational institution.”).

[19] See, e.g., Exec. Order No. 2021-418 (Ky. 2021).

[20] See, e.g., Katlyn Andrews, Navigating the NCAA’s Interim NIL Policy and State Regulations, Baker Tilly (Aug. 18, 2021), https://www.bakertilly.com/insights/navigating-the-ncaas-interim-nil-policy-and-state-regulations (“Subject to state law, the NCAA’s interim policy prohibits compensation . . . [f]or athletic participation or achievement (i.e., pay for play) . . . .”).

[21] See, e.g., Student-Athlete Endorsement Rights Act, 110 Ill. Comp. Stat. Ann. 190/1-99 (LEXIS through P.A. 102-450 of the 2021 Session of the 102nd Legislature).

[22] See, e.g., Ark. Code Ann. § 4-75-1307(b) (Westlaw through the 2021 Regular and First Extraordinary Session of the 93rd General Assembly) (effective Jan. 1, 2022).

[23] Id. at § 4-75-1307(b)(1)–(9).

[24] See, e.g., Mississippi Intercollegiate Athletics Compensation Rights Act, Miss. Code Ann. § 37-97-107(14) (Westlaw through the 2021 Regular Session).

[25] See Championship History, NCAA, https://www.ncaa.com/history/basketball-men/d1 (last visited Oct. 20, 2021).

[26] See 2021 Football Standings, ACC, https://theacc.com/standings.aspx?path=football (last visited Oct. 20, 2021).

[27] Exec. Order No. 223 (N.C. 2021).

[28] Id.

[29] Id.

[30] Id.

[31] See Mississippi Intercollegiate Athletics Compensation Rights Act, Miss. Code Ann. § 37-97-107(14) (Westlaw through the 2021 Regular Session).

[32] Exec. Order No. 223 (N.C. 2021).

[33] See Student-Athlete Endorsement Rights Act, 110 Ill. Comp. Stat. Ann. 190/1-99 (LEXIS through P.A. 102-450 of the 2021 Session of the 102nd Legislature).

[34] Exec. Order No. 223 (N.C. 2021).

[35] Id.

[36] Ralph D. Russo, Lawmakers Agree NCAA Needs NIL Help, but How Much and When?, Associated Press (June 9, 2021), https://apnews.com/article/in-state-wire-college-sports-football-stanford-cardinal-football-laws-188c6c20ad6032f6f633a1113f57904a.  

[37] Maria Carrasco, Congress Weighs In on College Athletes Leveraging Their Brand, Inside Higher Ed (Oct. 1, 2021), https://www.insidehighered.com/news/2021/10/01/congress-holds-hearing-creating-federal-nil-law.

[38] Id.


Post image by Ghana Decides on Flickr

By Alexander Hill

On October 29, 2019, the National Collegiate Athletic Association (the “NCAA”) announced that it would begin the process of directing its divisions to consider amendments to their bylaws to allow collegiate athletes to benefit from their names, images, and likenesses.[1] In this announcement, the NCAA stated these changes would come in a manner “consistent with the collegiate model.”[2] The NCAA’s decision follows California’s enactment of Senate Bill 206, commonly known as the “Fair Pay to Play Act” (the Act), which (upon its effective date of January 2023) will allow players to profit from their names, images, and likenesses, as well as sign agents to represent them in licensing contracts.[3] Additionally, Congress and other state legislatures are considering proposed legislation that would have similar effects as the Act.[4] However, the NCAA’s language of “consistent with the collegiate model” has an eerie similarity to the argument for restriction on amateurism that it made in O’Bannon v. Nat’l Collegiate Athletic Ass’n when it argued that compensation for college athletes goes against the “identity of college sports.”[5] In comparison to the Act, how much can the NCAA limit the athletes’ ability to profit of their name, image, and likeness?

This post addresses the extent of the legal limitations under the Sherman Antitrust Act on the NCAA when implementing these changes “consistent with the collegiate model.” It analyzes these two procompetitive factors in light of the details of the California Act, and whether the rights granted to athletes under this bill hinder these purposes to the extent that the Rule of Reason allows the NCAA to structure its own likeness compensation rules more narrowly than the Act under the Sherman Antitrust Act.

The Act allows athletes to hire agents to represent them in contracts with third parties to use the athletes’ likenesses in different ways, as well as allow the third parties to compensate the athletes in turn.[6] However, the Act restricts schools from compensating the players when they use the athletes’ likenesses themselves.[7] Additionally, athletes cannot enter into contracts if those contracts conflict with the terms of contracts entered into by the teams for which they play.[8]

To this point, the prospect of amateurism as a procompetitive factor in college sports has allowed the NCAA to refuse cash compensation for name, image, and likeness under the Sherman Antitrust Act, as evidenced by O’Bannon.[9] In O’Bannon, the Ninth Circuit Court of Appeals noted that the NCAA’s rules on player compensation are subject to the Sherman Antitrust Act and should receive the scrutiny classified as the “Rule of Reason.”[10] In the Rule of Reason analysis, the court addresses whether a restriction on trade is procompetitive, and if it is procompetitive, whether there is another way to promote the goal of the restriction in a less restrictive way.[11] In the O’Bannon case, the court found that the NCAA’s restriction on cash payments from schools to athletes for their name, image, or likeness beyond grants for educational expenses of the athlete failed the Rule of Reason analysis.[12] In its reasoning, the court noted the restriction promoted two procompetitive purposes: “preserving the popularity of the NCAA’s product by promoting its current understanding of amateurism” and “integrating academics and athletics.”[13] The court held that third parties, specifically EA Sports, which for years had made video games based on college athletics, could not use the athletes’ likeness without compensating them.[14]

In the court’s reasoning, however, the court mainly addressed the procompetitive factor of “preserving the popularity of the NCAA’s product by promoting its current understanding of amateurism” and did not really address the issue of “integrating academics and athletics.”[15] The court failed to address the fact that the NCAA already has in place certain eligibility requirements that require athletes to take certain kinds of classes during their tenure in school, as well as a GPA requirement that all athletes have to meet.[16] Whether or not players are compensated appears to have no bearing on the athletes’ integration into their college’s academics in any way. Where students are required to still maintain a certain level of academic achievement, an allowance for compensation would be a less restrictive alternative to restricting compensation for athletes while still maintaining the procompetitive factor of integrating athletics to academics. Therefore, allowing compensation for athletes would pass the Rule of Reason under the third prong. So, the only procompetitive factor that could be restricted would be restricting the popularity of the NCAA’s product.

When analyzing the restriction on the popularity of the NCAA’s product, the court in O’Bannon only focused on recruitment of players and payments to the players by the colleges themselves.[17] As noted above, the court held that colleges could not compensate athletes for their likenesses because it would hinder the popularity of the NCAA’s product.[18] Similar to this holding, the Act prohibited the ability of schools to pay their athletes for their likenesses.[19] So, that requirement would actually be consistent with O’Bannon. Looking at the allowance for athletes to hire agents, there is no reason why this would restrict the popularity of the sport. Applying the Rule of Reason analysis, allowing players to hire agents would not be more restrictive on the popularity of the NCAA’s product than would allowing players to earn compensation from third parties. If mandating that third parties must pay collegiate athletes for their likeness is not restrictive on this procompetitive aspect by O’Bannon, certainly allowing the athletes to hire agents to ensure they are fairly represented in a contract would meet the same standard under the Rule of Reason. So, naturally, allowing the athletes to hire agents would pass the Rule of Reason analysis and the NCAA would not be able to prevent students from being able to hire agents.

Additionally, if the court already held in O’Bannon that third parties are required to compensate the athletes[20], the requirement in the Fair Pay to Play Act that prevents the NCAA from implementing a rule prohibiting the athletes’ ability to profit off of their likeness is consistent with the holding in O’Bannon. Therefore, it appears that the allowances for athletes in the Fair Pay to Play Act are consistent with the court’s holding in O’Bannon.

In conclusion, it appears that the Fair Pay to Play Act’s grant of rights to athletes are consistent with the holding in O’Bannon, and any restriction beyond the Fair Pay to Play Act by the NCAA would be inconsistent with the ruling in O’Bannon.


[1] Board of Governors Starts Process to Enhance Name, Image and Likeness Opportunities, NCAA (Oct. 29, 2019, 1:08 PM), http://www.ncaa.org/about/resources/media-center/news/board-governors-starts-process-enhance-name-image-and-likeness-opportunities.

[2] Id.

[3] Allen Kim, California Just Passed a Law That Allows College Athletes to Get Paid, CNN (Sep. 29, 2019, 4:01 PM), https://www.cnn.com/2019/09/30/sport/california-sb-206-ncaa-trnd/index.html

[4] Michael McCann, What’s Next After California Signs Game Changer Fair Pay to Play Act into Law?, Sports Illustrated (Sep. 30, 2019), https://www.si.com/college/2019/09/30/fair-pay-to-play-act-law-ncaa-california-pac-12

[5] O’Bannon v. Nat’l Collegiate Athletic Ass’n, 802 F.3d 1049, 1058 (9th Cir. 2015).

[6] Fair Pay to Play Act, S.B. 206, 2019 Cal. State Senate (Cal. 2019).

[7] Id.

[8] Id.

[9] O’Bannon, 802 F.3d at 1079.

[10] Id.

[11] Id. at 1070.

[12] Id. at 1079.

[13] Id. at 1076.

[14] Id. at 1067.

[15] Id. at 1076.

[16] Id.; Amateurism, NCAA (last visited Nov. 4, 2019), http://www.ncaa.org/student-athletes/future/amateurism

[17] O’Bannon, 802 F.3d at 1076.

[18] Id.

[19] Cal. S.B. 206.

[20] O’Bannon, 802 F.3d at 1067.