In Virginia, House Bill 1505 has emerged and been signed into law, effective July 1, to tackle the expanding domain of name, image, and likeness (NIL) activities among student-athletes. This legislation aims to revolutionize how these athletes engage with their brands while participating in collegiate sports.
At its core, the bill imposes strict prohibitions on institutions and affiliated bodies, barring them from curtailing student-athletes’ ability to earn compensation for their name, image, or likeness.
This marks a pivotal shift, granting student-athletes newfound agency in seeking professional representation without fear of punitive measures like ineligibility or scholarship revocation based on their NIL earnings or representation.
Crucially, the bill extends its reach to athletic associations, safeguarding institutions and student-athletes from punitive measures stemming from NIL activities. Moreover, institutions are empowered to compensate student-athletes for their NIL use, fostering an environment conducive to entrepreneurial pursuits within collegiate athletics.
Do’s and Don’ts of Virginia NIL Legislation
To ensure compliance and transparency, each institution is tasked with crafting and enforcing policies governing NIL compensation. Additionally, institutions are empowered to offer assets or benefits to entities supporting NIL opportunities for student-athletes, further enhancing their ability to capitalize on their brands.
Despite these strides, the bill imposes certain restrictions, barring student-athletes from earning NIL compensation in specific categories such as alcohol, tobacco, and gambling. Moreover, student-athletes are prohibited from monetizing their NIL during certain academic or athletic activities and utilizing institutional facilities for NIL compensation without prior authorization.
Transparency remains paramount, as student-athletes must disclose NIL agreements to their respective institutions, with strict confidentiality protocols to safeguard sensitive information. Institutions can also prohibit NIL compensation if it conflicts with existing agreements or policies, ensuring alignment with institutional priorities.
Clarifications are made regarding the employment status of student-athletes, affirming that participation in athletics or NIL opportunities does not confer employee status upon them. Legal safeguards are instituted to empower student-athletes to pursue legal recourse in case of violations while shielding institutions from liability for damages stemming from NIL earnings.
Legal Implications Loom
Despite the comprehensive framework outlined by Virginia’s NIL laws, several legal implications loom. Challenges may arise on constitutional grounds, invoking the Commerce Clause or federal employment laws. Antitrust concerns may surface if the legislation stifles competition or hints at stakeholder collusion. Disputes over NIL agreements may spark legal battles, spanning compensation, intellectual property rights, and contract enforcement.
Enforcement actions may be spearheaded by the Virginia Attorney General, targeting violators with penalties or injunctions. Civil lawsuits could be lodged by aggrieved parties seeking damages or injunctive relief. Institutions may grapple with compliance obligations vis-à-vis NCAA regulations, potentially triggering conflicts, or sanctions.
NCAA NIL Action Amidst Virginia’s Legislation
In parallel, the NCAA Division I Council’s recent approval of a proposal underscores ongoing efforts to bolster student-athlete support and clarity in the NIL landscape.
Effective August 1, schools can proactively assist student-athletes in navigating NIL opportunities while upholding their autonomy over agreements. This decision seeks to instill stability amid a rapidly evolving landscape, as student-athletes must disclose NIL activities exceeding $600 to their institutions within 30 days. This move, however, preserves existing prohibitions against pay-for-play and direct compensation from schools for NIL use, underscoring the delicate balance between entrepreneurial freedoms and institutional regulations.
In essence, Virginia's NIL laws and the NCAA's recent decision herald a new era for student-athletes, offering unprecedented avenues for brand cultivation while navigating a complex legal terrain fraught with challenges and opportunities alike.
About Our Author
Caleb Diaz is a member of the Adams and Reese Litigation Practice Group, experienced in sports law, entertainment law, labor and employment, commercial litigation, and insurance law. Caleb’s legal work in NIL (Name, Image, and Likeness) has garnered attention from national media outlets, including the Washington Post and ESPN. He has authored articles on NIL deals and the litigation and laws surrounding those deals among corporations, student-athletes, and NCAA rules and regulations. Caleb is admitted to practice in Alabama, Florida, and Texas. Caleb earned his Bachelor of Science from Florida State University in sports management and since has parlayed that passion for sports into his practice of law.