NCAA Moves Toward Allowing Recommendations for Student Athletes to be Paid by Sponsors

The NCAA Board of Governors supports the rule change to allow student-athletes to receive compensation from sponsors.

The NCAA Board of Governors is moving toward allowing student athlete compensation and adopting recommendations from a NIL (name, image and likeness) working group to allow student athletes to be paid for sponsorships and endorsement deals as early as the 2021-22 academic year.

The NCAA Board of Governors announced their support after a working group proposed the changes at a meeting on Tuesday. The recommendations, if adopted, would allow student athletes to benefit from their name, image and likeness from deals with third parties and businesses. The new rules would go into effect in 2021 if the NCAA passes legislation next January.

“Throughout our efforts to enhance support for college athletes, the NCAA has relied upon considerable feedback from and the engagement of our members, including numerous student-athletes, from all three divisions,” Ohio State president Michael V. Drake said. “Allowing promotions and third-party endorsements is uncharted territory.”

As part of the recommendations, athletes can sell autographs and memorabilia and be paid for personal appearances. The recommendations ban student athletes from wearing school-branded apparel in their personal endorsement deals. They must disclose financial terms of their contracts to their athletic departments, as well as their relationship with the parties involved. If they fail to share the details of their agreement or relationships, it could affect their eligibility.

The recommendations also allow athletes to hire agents to help them find marketing opportunities, but the agents cannot seek professional sports opportunities for them while they're in school. Student athletes could not endorse products like banned substances which conflict with NCAA rules.

The NCAA could allow athletes to accept endorsement money from boosters, as long as it's not used by boosters to try to recruit players for their schools. An idea proposed at previous meetings included the NCAA creating a regulatory board to "determine the fair value" of deals and make sure athletes stay within the appropriate bounds. If athletes report their endorsement earnings, the board would reportedly flag excessive deals as a violation. NCAA president Mark Emmert said in January that he didn't know if the league or a third party would regulate the market. 

The battle for student athletes to benefit from NIL has been waging for many years. The NCAA was forced to act more recently due to pressure at the state levels. In September 2019, California Gov. Gavin Newsom signed the Fair Pay to Play Act into law. The Act, which doesn't go into effect until 2023, makes it illegal for California colleges to deny student athletes opportunities to gain compensation for the use of NIL. 

Multiple states have proposed similar bills since, and a bill in Florida could go into effect in July 2021 if signed by the governor. The NCAA has even gone to Congress about creating national guidelines for NIL rather than having various laws in different states.