In 2022, we saw the value of NIL deals grow to higher-than-ever levels, while states, the federal government, and the NCAA continued to work out new guidance and potential new laws to govern the publicity rights of student-athletes.
Some of those laws went into effect as of January 1, 2023. States with new NIL laws include: Colorado, Delaware, Michigan (effective December 31, 2022), and New York. Other states, like Montana, Nebraska, and Oklahoma are expected to see new NIL laws go into effect later in 2023.
Colorado’s law enshrines student-athletes’ rights to remuneration for use of their NIL, but still appears to permit the NCAA to regulate student-athletes’ exploitation of their NIL rights. Colorado colleges may not impose any other limitations on NIL rights beyond those from the NCAA.
Delaware’s new law governs those who wish to act as agents of student-athletes at Delaware universities. The law, which is not principally aimed at the rights of student-athletes to payment for use of their NIL, instead significantly regulates how persons become, and must act as, agents to athletes, going so far as to (among other things) set forth specific data which prospective agents must provide to the Delaware Secretary of State, as well as warning language that must be included in any student-agent contract for representation.
In Michigan, student-athletes’ NIL rights are preserved by the new law, similar to Colorado’s statute. However, the Michigan statute does not appear to limit NIL rights based on the rules and regulations from the NCAA, and in that sense, could be seen as more favorable to student-athletes, collectives, and institutions.
New York’s new law is similar to Michigan’s, and also appears to not be deferential to the NCAA. New York’s law, however, has a unique feature: it requires any Division I college athletic program to offer a “student-athlete assistance program,” which may include a “financial distress fund” from which student-athletes can receive payments from their school in “times of financial need.” It is not clear what qualifies as a “financial need,” but the statute does not appear to prevent NIL payments from sponsors alongside payments directly from schools from their “financial distress funds.”
Given the state-to-state differences in NIL laws–just a few of which are outlined above–athletes, managers, and institutions should consult qualified legal counsel before pursuing or acting under potential NIL agreements.