Will the NCAA Really Allow Student Athletes to Receive Compensation for NIL? What Will These New Rules Look Like?

In its vague statement, the NCAA declared it would “permit students participating in athletics the opportunity to benefit from the use of their name, image, and likeness, in a manner consistent with the collegiate model.” You may wonder what these ground breaking new NIL rules (to be effective in about one year!) will look like. Let me break the news: there will be no changes other than the arbitrary addition of “NIL” to the current rules that maintain the integrity of the game by making the rich richer at the expense of student athletes.

On October 29, 2019, the NCAA released a statement announcing that its Board of Governors “voted unanimously to permit students participating in athletics the opportunity to benefit from the use of their name, image, and likeness, in a manner consistent with the collegiate model.”

The NCAA’s statement dictated numerous guideposts that all three of the NCAA’s divisions must follow when implementing their new NIL rules, which must be in place “no later than 2021.” 

These guideposts are:

  • Assure student-athletes are treated similarly to non-athlete students unless a compelling reason exists to differentiate.
  • Maintain the priorities of education and the collegiate experience to provide opportunities for student-athlete success.
  • Ensure rules are transparent, focused and enforceable and facilitate fair and balanced competition.
  • Make clear the distinction between collegiate and professional opportunities. 
  • Make clear that compensation for athletics performance or participation is impermissible. 
  • Reaffirm that student-athletes are students first and not employees of the university.
  • Enhance principles of diversity, inclusion and gender equity.
  • Protect the recruiting environment and prohibit inducements to select, remain at, or transfer to a specific institution.

So… it seems that the three NCAA divisions have approximately one year to implement their new NIL rules. What will those look like? What should they look like?

Current Rules – A Look at Division I

2019-20 Division I Manual- effective August 1, 2019:

Article 12, Amateurism and Athletics Eligibility:

12.02.2 Actual and Necessary Expenses. Actual and necessary expenses are limited to: (Adopted: 1/19/13 effective 8/1/13) (a) Meals; (b) Lodging; (c) Apparel, equipment and supplies; (d) Coaching and instruction; (e) Health/medical insurance; (f) Transportation (expenses to and from practice and competition, cost of transportation from home to training/practice site at the beginning of the season/preparation for an event and from training/practice/event site to home at the end of season/ event); (g) Medical treatment and physical therapy; 11/9/19 61 (h) Facility usage; (i) Entry fees; and (j) Other reasonable expenses.

12.02.8 Limited Benefit — Enrolled Student-Athlete — Expenses from a Permissible Source. If a student athlete engages in permissible outside competition and receives expenses from a permissible source (e.g., event sponsor, club team) that exceed his or her actual and necessary expenses by $300 or less, the eligibility of the student-athlete shall not be affected and the institution is not required to submit a self-report of the infraction. (Adopted: 1/19/13 effective 8/1/13)

12.02.10 Pay. Pay is the receipt of funds, awards or benefits not permitted by the governing legislation of the Association for participation in athletics.

12.1.2 Amateur Status. An individual loses amateur status and thus shall not be eligible for intercollegiate competition in a particular sport if the individual: (Revised: 4/25/02 effective 8/1/02, 4/23/03 effective 8/1/03, 4/29/10 effective 8/1/10)

(a) Uses his or her athletics skill (directly or indirectly) for pay in any form in that sport;

(b) Accepts a promise of pay even if such pay is to be received following completion of intercollegiate athletics participation;

(c) Signs a contract or commitment of any kind to play professional athletics, regardless of its legal enforceability or any consideration received, except as permitted in Bylaw 12.2.5.1;

(d) Receives, directly or indirectly, a salary, reimbursement of expenses or any other form of financial assistance from a professional sports organization based on athletics skill or participation, except as permitted by NCAA rules and regulations;

(e) Competes on any professional athletics team per Bylaw 12.02.12, even if no pay or remuneration for expenses was received, except as permitted in Bylaw 12.2.3.2.1;

(f) After initial full-time collegiate enrollment, enters into a professional draft (see Bylaw 12.2.4); or

(g) Enters into an agreement with an agent.

12.1.2.1 Prohibited Forms of Pay. “Pay,” as used in Bylaw 12.1.2 above, includes, but is not limited to, the following: 12.1.2.1.1 Salary, Gratuity or Compensation. Any direct or indirect salary, gratuity or comparable compensation.

What Should the Division I Rules that Incorporate NIL Look Like?

The three divisions of the NCAA should be drafting new rules that will effectively allow student athletes to receive fair pay for use of their name, image, and likeness. Consider the following proposed revisions to the Division 1 rules.

12.02.2 Actual and Necessary Expenses. Actual and necessary expenses are limited to: (a) Meals; (b) Lodging; (c) Apparel, equipment and supplies; (d) Coaching and instruction; (e) Health/medical insurance; (f) Transportation (expenses to and from practice and competition, cost of transportation from home to training/practice site at the beginning of the season/preparation for an event and from training/practice/event site to home at the end of season/ event); (g) Medical treatment and physical therapy; (h) Facility usage; (i) Entry fees; (j) Fees associated with executing a contract for use of the student athlete’s name, image, and likeness; and (k) Other reasonable expenses.

12.02.8 Limited Benefit — Enrolled Student-Athlete — Expenses from a Permissible Source. If a student athlete engages in permissible (as defined below) outside competition and receives expenses from a permissible source (e.g., event sponsor, club team, or company contracting with the student athlete in relation to use of name, image, and likeness rights) that exceed his or her actual and necessary expenses by $300 or less (except in relation to a valid contract executed by the student athlete in relation to use of name, image, and likeness rights), the eligibility of the student-athlete shall not be affected and the institution is not required to submit a self-report of the infraction. *Outside compensation is “permissible” if it does not invalidate a student athlete’s “Amateur Status” as defined by 12.1.2. A valid contract entered into by the student athlete in relation to use of name, image, and likeness rights by another party in exchange for direct compensation will be deemed “permissible” under these rules.

12.02.10 Pay. Pay is the receipt of funds, awards or benefits not permitted by the governing legislation of the Association for participation in athletics, unless such pay is associated with a valid contract for use of name, image, and likeness rights.  

12.1.2 Amateur Status. An individual loses amateur status and thus shall not be eligible for intercollegiate competition in a particular sport if the individual:

(a) Uses his or her athletics skill (directly or indirectly) for pay in any form in that sport, unless such pay is associated with a valid contract for use of name, image, and likeness rights;

(b) Accepts a promise of pay even if such pay is to be received following completion of intercollegiate athletics participation, unless such pay is associated with a valid contract for use of name, image, and likeness rights;

(c) Signs a contract or commitment of any kind to play professional athletics, regardless of its legal enforceability or any consideration received, except as permitted in Bylaw 12.2.5.1;

(d) Receives, directly or indirectly, a salary, reimbursement of expenses or any other form of financial assistance from a professional sports organization based on athletics skill or participation, except as permitted by NCAA rules and regulations, or if such salary, reimbursement of expenses, or any other form of financial assistance is associated with a valid contract for use of name, image, and likeness rights;

(e) Competes on any professional athletics team per Bylaw 12.02.12, even if no pay or remuneration for expenses was received, except as permitted in Bylaw 12.2.3.2.1;

(f) After initial full-time collegiate enrollment, enters into a professional draft (see Bylaw 12.2.4); or

(g) Enters into an agreement with an agent, unless such agent represents the student athlete in relation to use of name, image, and likeness rights .

12.1.2.1 Prohibited Forms of Pay. “Pay,” as used in Bylaw 12.1.2 above, includes, but is not limited to, the following: 12.1.2.1.1 Salary, Gratuity or Compensation. Any direct or indirect salary, gratuity or comparable compensation.

In Reality, What Will the Division I Rules that Incorporate NIL Look Like?

Well… let’s go back to what the NCAA said in their October 29 statement. “[I]n a manner consistent with the collegiate model.” The “collegiate model” the NCAA is referring to is the infamous amateurism ideal – a multibillion dollar industry that benefits everyone except the players. So… you ask, what will these new NIL rules look like? Probably something like this:

12.02.2 Actual and Necessary Expenses. Actual and necessary expenses are limited to: (a) Meals; (b) Lodging; (c) Apparel, equipment and supplies; (d) Coaching and instruction; (e) Health/medical insurance; (f) Transportation (expenses to and from practice and competition, cost of transportation from home to training/practice site at the beginning of the season/preparation for an event and from training/practice/event site to home at the end of season/ event); (g) Medical treatment and physical therapy; (h) Facility usage; (i) Entry fees; and (j) Other reasonable expenses, including expenses associated with use of name, image, and likeness rights.

12.02.8 Limited Benefit — Enrolled Student-Athlete — Expenses from a Permissible Source. If a student athlete engages in permissible outside competition and receives expenses from a permissible source (e.g., event sponsor, club team) that exceed his or her actual and necessary expenses by $300 or less, the eligibility of the student-athlete shall not be affected and the institution is not required to submit a self-report of the infraction.

12.02.10 Pay. Pay is the receipt of funds, awards or benefits not permitted by the governing legislation of the Association for participation in athletics.

12.1.2 Amateur Status. An individual loses amateur status and thus shall not be eligible for intercollegiate competition in a particular sport if the individual:

(a) Uses his or her athletics skill (directly or indirectly) for pay in any form in that sport;

(b) Accepts a promise of pay even if such pay is to be received following completion of intercollegiate athletics participation;

(c) Signs a contract or commitment of any kind to play professional athletics, regardless of its legal enforceability or any consideration received, except as permitted in Bylaw 12.2.5.1;

(d) Receives, directly or indirectly, a salary, reimbursement of expenses or any other form of financial assistance from a professional sports organization based on athletics skill or participation, except as permitted by NCAA rules and regulations;

(e) Competes on any professional athletics team per Bylaw 12.02.12, even if no pay or remuneration for expenses was received, except as permitted in Bylaw 12.2.3.2.1;

(f) After initial full-time collegiate enrollment, enters into a professional draft (see Bylaw 12.2.4); or

(g) Enters into an agreement with an agent.

12.1.2.1 Prohibited Forms of Pay. “Pay,” as used in Bylaw 12.1.2 above, includes, but is not limited to, the following: 12.1.2.1.1 Salary, Gratuity or Compensation. Any direct or indirect salary, gratuity or comparable compensation.

Notice something sketchy about this? How about that the new NIL rules will look exactly the same as the rules in place today. Maybe, just maybe, the NCAA will put in some effort and add the term “NIL” in an effort to remain consistent with their statement that they will “permit students participating in athletics the opportunity to benefit from the use of their name, image, and likeness, in a manner consistent with the collegiate model.” But will the rules change? Absolutely not. And this is just fine with the NCAA because such “new rules” will:

  • Assure student-athletes are treated similarly to non-athlete students unless a compelling reason exists to differentiate.
  • Maintain the priorities of education and the collegiate experience to provide opportunities for student-athlete success.
  • Ensure rules are transparent, focused and enforceable and facilitate fair and balanced competition.
  • Make clear the distinction between collegiate and professional opportunities. 
  • Make clear that compensation for athletics performance or participation is impermissible. 
  • Reaffirm that student-athletes are students first and not employees of the university.
  • Enhance principles of diversity, inclusion and gender equity.
  • Protect the recruiting environment and prohibit inducements to select, remain at, or transfer to a specific institution.

How about that? The NCAA will do nothing in terms of implementing “new rules” and yet will remain completely consistent with its flashy, ground breaking statement. How could this be? Well, because the NCAA effectively said nothing in its October 29 statement. The statement was simply “a PR stunt to stop momentum generated by legislation that will mandate student-athlete compensation.”

So what does “benefit” mean? Remember, the NCAA never said student athletes would be paid (directly or indirectly) for use of their name, image, and likeness. I mean, they really couldn’t be paid because then there would be an inconsistency with the collegiate model. Here, the NCAA could allow student athletes to receive a “benefit” for use of NIL as long as such “benefit” does not exceed his or her actual and necessary expenses by $300 or less. See what the NCAA did there? Absolutely nothing. And that was the point all along.

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