This article was written for Law.com and was published May 26, 2023.
Florida's initial Name, Image and Likeness (NIL) law, which the state passed in June 2020, caused a stir in the college sports world.
The June 2020 law allowed athletes to earn money through endorsements, sponsorships and social media deals. Expressly, the law permitted college athletes, for the first time, to profit off their NIL while still enrolled in school. The June 2020 bill was especially relevant to future and current Florida college athletes. They were able to explore opportunities for monetizing their NIL without the fear of losing eligibility.
However, in February 2023, the Florida legislature again changed the state's NIL law. The subsequent change in the law affected student athletes and impacted additional stakeholders, such as Florida universities and their employees. Further, the February 2023 law has implications for collectives and boosters, sports agencies and marketing firms. The term "collective," typically referring to a collaborative venture, does not hold any specific legal significance. In the context of Name, Image, and Likeness (NIL), collectives are merely business establishments formed by supporters of college athletic teams, operating under state laws to generate and accept revenue. These collectives utilize the generated funds to provide NIL opportunities to college athletes who opt-in and seek their aid in capitalizing on their NIL. These entities can now legally represent or assist student athletes concerning endorsement deals and sponsorships. They can also help student athletes build their brand and capitalize on their popularity. This opens new business opportunities to tap into the college sports market and work with the athletes to promote their products.
The February 2023 law provides schools' employees with immunity, including coaches and administrators, protecting them from any legal action related to a student athlete's NIL activities. While the February 2023 law is less restrictive than its predecessor, under the new law, schools have additional duties and obligations. In addition to the requirements mandated in the June 2020 law, schools must provide additional educational programs for their student athletes.
One concern related to the Florida law is the unclear penalties for noncompliance. The new law does not specify the consequences for schools, coaches or student athletes who violate the law, creating uncertainty and ambiguity about how the state will enforce its new law. For instance, if a school fails to complete or report its NIL educational programs, are there criminal or civil penalties associated with non-compliance? If so, what are the penalties, who will enforce them, and how will the penalties be enforced?
The law also has potential implications concerning Title VII and Title IX. Title VII prohibits employment discrimination based on race, color, religion, sex or national origin. Title IX prohibits sex discrimination in any education program or activity that receives federal funding. NIL and its enforcement undoubtedly create new liabilities for discrimination. Because the new NIL law permits colleges and universities to assist in directing endorsement deals and other compensation, schools may violate Title XI. If a school endorses male athletes or teams more than female athletes or teams, it could create a disparity in the financial support provided to male and female sports in violation of Title XI. While a student athlete is not a university's employee, if athletes are denied NIL opportunities based on their race, color, religion, sex, or national origin it could violate Title VII's prohibition of employment discrimination.
Despite Florida's new law, NCAA bylaws still apply. This means that student athletes are still subject to NCAA regulations related to their NIL activities. Notably, the NCAA has stated that it continues to review its policies related to NIL, which could lead to further changes in the future. Currently, there is no federal legislation concerning NIL and a uniform implementation of NIL, if it ever comes to fruition, could be years away. Because there is not yet a uniform federal law concerning NIL, universities and their athletic departments should remain cognizant of other state's NIL laws and how a violation of those laws could expose a university to liability.
For now, Florida's recent change in NIL law is highly relevant as it affects multiple stakeholders as well as creates new opportunities in the college sports world. As the state implements the law, it will be essential to monitor the actual impact it has.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
