In the United States, college sports have always been more than just games. They are often described as billion‑dollar enterprises perfectly woven into the fabric of American culture. For several decades, the National Collegiate Athletic Association (NCAA) maintained a strict definition for ‘amateurism.’
This insisted that athletes could not profit beyond scholarships and modest stipends. It was justified as a way to preserve the competition’s purity. But it meant that athletes themselves remained excluded from direct financial gains, even when schools and conferences reaped enormous revenues.
A dramatic shift was witnessed in 2021 with the introduction of “NIL,” which stands for “name, image and likeness.” This change allowed college stars to not only sign endorsement deals and launch personal brands, but also earn income in ways that had long been reserved for professionals.
NIL in college sports
In simple terms, NIL refers to an individual’s legal right to have control over how their image is being utilised, including commercially, according to ESPN. For a long time, student-athletes were not allowed to make deals to profit from their fame. As a result, they forfeited their NIL rights by deals with college sports teams. A few years ago, rule changes by the NCAA, accompanied with state laws, restored NIL rights to college athletes, allowing them to make sponsorship deals.
Since student athletes were considered amateurs, they remained prohibited from receiving monetary compensation for their accomplishments.
As per NCAA.org, student-athletes are now allowed to receive compensation from third parties “for use of their name, image and likeness (NIL), such as social media posts, brand appearances or promoting products and services.”
It highlights that all three NCAA divisions – Division I, Division II, and Division III – have extended support towards opportunities for student-athletes to pursue NIL consistent with rules protecting fair competition.
As the NCAA adopted uniform interim NIL policy in 2021, then-president Mark Emmert called it an “important day for college athletes” and said they will now be able to take advantage of name, image and likeness opportunities. “With the variety of state laws adopted across the country, we will continue to work with Congress to develop a solution that will provide clarity on a national level. The current environment — both legal and legislative — prevents us from providing a more permanent solution and the level of detail student-athletes deserve,” Emmert added.
How Does It Work
An NIL deal serves as an agreement where student-athletes get compensation in the form of money, products or services for allowing them to use their name, image or likeness. Among these include social media pots, product endorsements or appearances at various events.
Some of the common examples of NIL activities include social media posts or content for a brand, autograph signings, appearance in commercials or other promotional events, and endorsement or sponsorship agreements.
What’s allowed?
Student-athletes must be paid specifically for the use of their NIL, which can include posts, appearances or ads. The deal needs to have a valid business purpose tied to a real service, product or event to the public. The compensation being provided to them has to be within a reasonable range for people with similar fame or influence. They can even take help of an agent or marketing professional for NIL activities.
What’s not allowed?
Student-athletes cannot be paid with no required promotional activity or deliverables. Their agreements must say that the NIL will be used later with no defined plan.
Compensation outside a reasonable range for similar deals is not provided. Another thing which is not allowed is “pay-for-play, including payment to attend or compete for a specific school or compensation for athletics participation or achievement,” NCAA.org highlights.
NIL: Know how it is checked
As per ESPN, there is a set combination of school policies and state laws that student-athletes need to follow to understand what deals they can make. Also, there are states having no oversight. In such cases the NCAA has asked universities to pen policies for their own athletes.
A few common requirements are that they are given business advice or training before making deals. This prevents them from promoting certain kinds of products. Majorly, the state laws remain focused on preventing these NIL deals from being misused as a recruitment tool.
Notably, schools can’t pay the student-athletes directly, as per NCAA rules. This means, colleges are not allowed to offer money to high school athletes to play at their facility. Also, players cannot receive compensation directly from their university depending on their athletic achievements.
The NCAA still intends to continue with its amateur sports status, paying student-athletes for their play on the field is not possible. NIL thus serves as a means for students to receive money without technically being considered professional athletes.
If a college athlete belongs to a state where the legislation has been passed, then they will be able to profit from their NIL based on the state law. In states without current NIL laws, individual schools can have their own policy for athletes to follow.