NIL Domino Effect Makes its Way to High School Sports

High School Athlete Compensation

State high school athletic associations have long followed the NCAA’s lead in prohibiting compensation for athletes to preserve an “amateur” status.^[1] With college athletes earning compensation for their likeness, the traditional concept of “amateurism” is now slowly eroding. As the conventional idea of amateurism erodes, it unearths the reality that many state laws and state high school athletic association rules, too, are becoming obsolete. As a result, we have approached a crossroads between preserving the purity of high school sports and allowing high school athletes to earn compensation for their likeness safely.

Mikey Williams’ popularity helped the NIL domino effect reach the high school ranks. Photo Credit.

Preserving the Purity of High School Sports

Since the NCAA permitted college athletes to earn compensation for their likeness in 2021, the National Federation of State High School Associations (“NFHS”) has maintained its stance on the purity of high school sports. Id. Executive Director of NFHS, Karissa Niehoff, explained:

“When it comes to the actual high school locker room experience, the culture of the school community, and all that is unique about high school sports, we believe that professional contracts could be a real disruptor.” Id.

High school sports in the United States are unique because they are organized by schools instead of sports clubs or organizations. While many people like Ms. Niehoff desire to maintain the purity of high school sports, the reality is that the justification of prohibiting high school athletes from earning compensation for their likeness to maintain an amateur status is weakening significantly. As a result, several states have foreseen this reality. They have subsequently amended their policies that govern high school athletics to allow for compensation for athletes while still maintaining a level of purity amongst their high school ranks.

For example, California was officially the first state high school athletic association to allow high school athletes to earn compensation for their NIL.[2] While the California Interscholastic Federation (“CIF”) has taken the stance that their rules never prohibited athletes from earning compensation for their NIL, the CIF regulations that govern NIL demonstrate an attempt to preserve purity in high school athletics.[3] Specifically, under Section 212 in the 2021-2022 CIF Constitution and Bylaws, a high school athlete shall become ineligible if they are:

“wearing a school team uniform or any identifying school insignia while appearing in any advertisement, promotional activity or endorsement for any commercial product or service” or “lending his/her name and team affiliation for purpose of commercial endorsement.”[4][5]

Several state high school associations have amended their policies to allow high school athlete compensation, with California as a template. According to opendorse, Alaska, Kansas, Maine, Nebraska, New York, New Jersey, and Vermont have policies that permit high school athletes to be compensated for their NIL.[6] Several of these state high school athletic association policies illustrate the changes coming to high school athletics in our country.

New York High School Sports

Before October 2021, New York State Public High School Athletic Association (“NYSPHSAA”), the governing body of high school sports in New York, explicitly prohibited high school athletes from earning compensation to maintain “amateur” status.

Before October 2021, High School Athletes in New York were Prohibited from Earning Compensation for their NIL. Photo: Christopher Cecere

For example, the previous language governing amateur status in New York stated:

“A student who represents a school in an interscholastic sport shall be an amateur in that sport. An amateur is one who engages in athletic competition solely for the pleasure of the activity and for the physical, mental, and social benefits derived from participation. When competing in non-NYSPHSAA sponsored events, an athlete forfeits amateur status in a sport by:

1. Accepting money or other compensation, including gift cards and gift certificates is prohibited (allowable entry fees, travel, meals, and lodging expenses is permitted.) (Feb. 2019)

2. Receiving an award or prize of monetary value which has not been approved by this Association. NOTE: Only awards or prizes having a monetary value of five hundred dollars ($500) or less per competition will be approved by the Association. When honoring student-athletes for success in NYSPHSAA sponsored championship events, Boards of Education are encouraged to approve limited awards that are appropriate to high school level competition. (May 2019)

3. Capitalizing on athletic fame by receiving money or gifts of monetary value (scholarships to institutes of higher learning are specifically exempted).

4. Signing a professional playing contract in that sport.”[7]

Subsection 3, would clearly apply to any opportunity for high school athletes to compensate from their NIL. Therefore, in mid-October of 2021, the NYSPHSAA announced that it revised its rule regarding amateur athletes in New York and now permitted high school athletes to benefit from their NIL.^[8] More specifically, NYSPHSAA attempted to clearly distinguish the difference between commercial compensation and compensation based off an affiliation with the student’s school, Section, or NYSPHSAA. Id.

The new language now states:

“An athlete forfeits amateur status in a sport by capitalizing on athletic fame by receiving money, compensation, endorsements or gifts of monetary value in affiliation or connection with activities involving the student’s school team, school, Section or NYSPHSAA (scholarships to institutions of higher learning are specifically exempted.)
- This provision is not intended to restrict the right of any student to participate in a commercial endorsement provided there is no school team, school, Section or NYSPHSAA affiliation.
- The student does not appear in the uniform of the student’s school and does not utilize the marks, logos, etc., of the school, section, or NYSPHSAA as part of any endorsement.
An athlete forfeits amateur status in a sport by signing a professional playing contract in that sport.”[9]

Now, high school athletes in New York can jump for joy. As long as they don’t affiliate with their school, Section, or the NYSPHSAA in any way, high school athletes in New York can now compensate for their likeness. Photo Cred.

While the “amateur” concept still floats around, the fact that the NYSPHSAA loosened its restrictions on high school athletes’ ability to earn compensation weakens the traditional concept of amateurism. Furthermore, the language used by the NYSPHSAA highlights the tension points that this new market may bring to high school sports. For example, in an attempt to preserve the purity of high school sports, the NYSPHSAA adopted California’s policy that prohibited compensation for any affiliation with a specific school or school’s team. In addition, the NYSPHSAA went even further to prohibit any affiliation with its high school Sections or the NYSPHSAA itself.

New Jersey High School Sports

It appears that the New Jersey Interscholastic Athletic Association (“NJSIAA”) expanded even further on their NIL regulation than New York and California. The NJSIAA crafted its new policy in collaboration with Rutgers University and Big East Conference Officials.[10] Together, they generated a policy that prohibits any involvement of schools, teams, or school uniforms in advertising. Id. In addition, high school coaches, teachers, and administrators are not allowed to be involved in high school athletes’ NIL activity. Id. Further, of note, while athletes can be featured on radio and TV, they cannot participate in any NIL activity involving casinos, gambling, alcohol, drugs, and adult entertainment. Id.

The full amendment to the NJSIAA rule can be accessed here.[11] In addition, the NJSIAA has provided a FAQ that can be easily accessible to individuals that seek a further understanding of this ever-evolving market.[12]

State of Maryland Proposed Legislation

California, New York, and New Jersey each provide excellent starting points for high school athletic associations that plan to adapt to the high school NIL market. However, high school NIL activity in these states is regulated only by athletic associations and not state law. State law regulation can have greater reach, and if constructed appropriately, can begin to regulate NIL activity so that high school students can safely participate in this market.

Recently, Maryland State Delegate Jay Walker introduced Maryland House Bill 1431.[13] Under this proposed bill, public high school athletes that participate in an interscholastic athletic program within the state would gain the right to participate in NIL activity. Id. This right would be contingent on meeting two specific conditions.

For example, Section (F) of Maryland House bill 1431 sets two explicit conditions:

“(F) A student athlete may enter into a contract providing compensation to the student athlete for the use of the student athlete’s name, image, or likeness only if:

The provisions of the contract are not in conflict with the provisions of the student athlete’s athletic program contract; and
The student athlete’s parent or guardian cosigns the contrast.”[14]

In addition to requiring conditions, the proposed legislation appears to adopt the California model of maintaining purity amongst its high school programs by disassociating any NIL activity with a certain school’s affiliation. Id.

For example, Section (G) of the proposed bill states:

“Nothing in this section may be construed to grant a student athlete a right to make commercial use of name, trademarks, logos, or other intellectual property owned or controlled by a public high school.”

Furthermore, the bill would also restrict any public school or any groups affiliated with the school from providing compensation to the high school athlete for their NIL or from limiting the athlete from using their NIL for commercial purposes.[15] If passed, this bill would not be effective until July 1, 2023. Id. Nonetheless, this bill provides an excellent example of how states can adapt to the evolving NIL market to allow their high school athletes to earn compensation for NIL activity in a safe way.

Range of Regulations for High School Athlete NIL Participation

As the NIL market evolves, it is clear that states and their respective high school associations will be at crossroads as to whether or not to allow high school athletes to earn NIL compensation. California, New York, New Jersey, and the proposed Maryland bill provide excellent permissive examples. However, not all states are clearly behind the concept of high school athletes participating in the NIL market. For example, in Texas, it is state law, and not its high school athletic association, that prohibits high school athletes from earning NIL compensation.[16]

The same bill that regulates NIL activity for college athletes, Senate Bill 1385, states:

“(j) – No individual, corporate entity, or other organization may:

enter into any agreement with a prospective student athlete relating to the prospective student athlete’s name, image, or likeness prior to their enrollment in an institution of high education; or
use of inducements of future name, image, and likeness compensation arrangement to recruit a prospective student athlete to any institution of higher education.”[17]

In addition to the Texas state bill that explicitly prohibits high school athletes from earning NIL compensation before enrolling in an institution of higher education, twenty-four (24) other states either have state law or high school athletic association policy that prohibit high school athlete NIL compensation.[18] The remainder of states are either considering their stance on high school NIL activity or have outdated language regulating amateur status which are unclear as to its application to NIL activity.

Conclusion: Participate in this Market Safely

Overall, it appears that the NIL landscape for high school athletes may even be more unstable than that at the collegiate ranks. Nonetheless, when individuals can contract their services, there are always concerns. In a previous post, we discussed what college athletes should know before engaging in NIL activity.[19] While many of these points of emphasis remain valid, NIL activity for high school students adds concern – primarily the fact that minors may be engaging in contracts. In most states, any individual under eighteen (18) is considered a minor and awarded certain rights under standard contract law. While minors generally have the right to void agreements, traditionally, minors who engage in sports or entertainment contracts are usually not able to void such contracts.

Further, it is unclear whether contracts for an athlete’s NIL rights are considered sports or entertainment contracts. Thus, high school student-athletes who want to pursue NIL activity should do so with legal representation, if their state allows, and always with the assistance of a parent or guardian.

[1] https://globalsportmatters.com/youth/2021/12/07/high-school-sports-nil-mikey-williams/

[2] https://www.forbes.com/sites/kristidosh/2021/12/31/nil-momentum-increasing-for-high-school-athletes/?sh=22d6f0434680

[3] https://www.natlawreview.com/article/high-school-student-athletes-asserting-name-image-and-likeness-rights-moves-to#:~:text=The%20New%20Jersey%20State%20Interscholastic,their%20school%20logos%20and%20marks.

[4] https://www.cifstate.org/governance/constitution/200_Series.pdf

[5] https://opendorse.com/blog/nil-high-school/

[6] https://opendorse.com/blog/nil-high-school/

[7] https://s3.amazonaws.com/nysphsaa.org/documents/2021/6/8/NYSPHSAA_Handbook_002.pdf

[8] https://www.democratandchronicle.com/story/sports/high-school/2021/10/20/ny-high-school-athletes-can-benefit-nil-deals-nysphsaa-says/6107729001/

[9] https://twitter.com/RobertZayasNY/status/1450852049302822916/photo/1

[10] https://globalsportmatters.com/youth/2021/12/07/high-school-sports-nil-mikey-williams/

[11] https://www.njsiaa.org/sites/default/files/documents/2021-12/amateurism-nil-proposal-2nd-reading.pdf

[12] https://p16cdn4static.sharpschool.com/UserFiles/Servers/Server_16803561/File/njsiaa-nil-faqs-final.pdf