The Basics of NIL Deals (On-Demand)

General Credits:
Original Date Of Course:

$129.00

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Course Description

This course will cover the basics involved in representing amateur athletes (both high school and collegiate) in endorsement opportunities utilizing their name, image, and likeness following the National Collegiate Athletic Association v. Alston et al. case. We will discuss the history of the “amateurism” model, the cascades and factors that led to the ruling in Alston, the NIL landscape and regulations for current athletes, and discuss the future of where NIL is likely headed for athletes and the businesses that have planted a flag in the NIL space.

Principles

  • The History of the NCAA and the “Amateurism Model
  • The Cases that Paved the Way for Change
  • Today’s Landscape
  • What the Future Holds

Syllabus

  1. The History of the NCAA and the “Amateurism Model
    • The NCAA
      • In the Beginning
      • Founded in 1906 to “regulate the rules of college sport and protect young athletes.” From the issues revolving around football (1904: 18 deaths and 159 serious injuries.)
        • Some schools filled their rosters with paid players who were not students at the school they played.
        • After WWII, NCAA instituted the “Sanity Code,” permitting covered financial aid, and establishing recruitment and academic standards – all in furtherance of ensuring amateurism in collegiate athletics.
        • In 1980, in response to Title IX being enacted, the NCAA put 10 women’s sports for the championship, interscholastic competition.
      • Structure
        • Comprised of member institutions
        • While it states it tries to “protect young athletes,” this has been hotly debated, and often, NCAA rules have had unintended consequences that put some athletes in a worse position.
        • The NCAA is the overarching governing body, with athletic conferences below the NCAA, and the member schools at the base level.
        • The NCAA organizes and administers championships, sets playing rules, eligibility, and other administrative rules for its member institutions.
      • The Original Rules
      • Prior to the Alston ruling, it was often the case that the NCAA rules were cumbersome, hard to understand, and were not uniformly applied
      • The philosophy of the NCAA and its member institutions was that athletes participating in collegiate athletics should be amateurs and not be compensated based on their athletic performance.
      • The NCAA, as a conceptual theory, tried to keep collegiate athletes from receiving any additional benefit for their participation in their chosen sport, that a non-collegiate athlete would receive.
      • This was primarily focused on benefits received from sources outside the universities (e.g., boosters, fans, sponsors, etc.). However, the member institutions could provide their collegiate athletes with meals, fitness facilities, clothing, healthcare, tutors, etc. That most of the non-athlete students would not have similar access.
    • The “Amateurism” Model
      • The Purpose
        • Its primary focus is to maintain the focus of collegiate athletics on giving collegiate athletes an opportunity to receive an education while also developing as an athlete.
      • The Effect
        • The “Death Penalty” issued against SMU
        • Severe Sanctions against the Univerity of Miami
        • Reggie Bush and his Heisman Trophy
        • Cream Cheese Makes a Bagel a Meal
  2. The Cases that Paved the Way for Change
    • O’Bannon
      • Former UCLA Mens Basketball Player Ed O’Bannon brought an antitrust case against the NCAA for the rule barring compensation to student-athletes for the use of their names, images, and likenesses.
      • Court ruled that the NCAA was subject to antitrust laws and that the prohibition on NIL had a significant anticompetitive effect on the college education market.
      • While compensation rules had pro-competitive effects in the integration of academics with athletics and “promoting amateurism” there was a less-restrictive measure that could be taken.
      • The court specifically noted that allowing student-athletes to receive deferred compensation that was not related to educational expenses was also not an appropriate alternative.
      • This was the downfall for NCAA-Electronic Arts video games.
    • Oliver
      • OSU baseball player, Andy Oliver met with an attorney and his father following the MLB Rule IV First-Year Player Draft (Oliver was drafted) and negotiated the terms of his possibly playing professional baseball.
      • The NCAA said this violated their rules and that he was no longer eligible to participate in NCAA intercollegiate athletics.
      • Oliver was granted a permanent injunction and declaratory relief against the NCAA, and the court ruled that even though there was no contract between the parties, an action for breach of contract could have been brought by the player because he was an intended third-party beneficiary. The court further held that because a bylaw was arbitrary and violated the covenant of good faith and fair dealing implicit in the contract.
      • This was different than if Oliver had hired a baseball agent.
      • Other cases had been filed against the NCAA in the recent past and had chipped away at what was previously a stranglehold the NCAA held on determining player eligibility and a player’s ability to capitalize in any way (no matter how small). (See: NCAA v. Board of Regents, 468 U.S. 85 (1984),
  3. The Alston Case
    • To begin, note that the ruling was 9-0 (in 2021)! Not an easy feat!
    • The Court ruled that limits on education-related benefits for college athletes violate federal antitrust laws but did not define what “education-related expenses” encompassed.
    • Did this have anything to do with NIL? NO!
      • This was the watershed moment for the NCAA.
      • It became clear that it member institutions and athletes were not going to stand for the old rules.
      • Justice Kavanaugh’s concurring opinion made it clear that the NCAA was not going to fare well in a NIL-ready world.
  4. Today’s Landscape
    • A patchwork of state laws that vary widely
      • As it applies to colleges
      • As it applies to high school athletes
      • Who will enforce? Who is harmed?
    • The NCAA Fights for relevance
      • The NCAA has interim rules that permit NIL opportunities where state regulation is silent
      • The NCAA has been urging Congress for federal legislation around NIL
      • Recent Conference alignment and mega broadcasting deals have cut the feet from the NCAA’s prior position of NIL being the beginning of the end of collegiate sports.
    • A proliferation of Collectives
      • What is a collective?
      • How close are collectives pushing the boundary?
      • Who will enforce it?
    • A proliferation of NIL-focused companies
      • Representing Athletes
      • Representing Brands
      • Sitting in the middle
  5. What the Future Holds
    • More collegiate athletes will capitalize in novel ways
      • Online
      • Personal Appearances
      • As Influencers
    • Could affect NCAA Athletes Leaving School Early
    • Could it lead to NCAA Athletes getting paid by the schools directly?
      • Title IX Concerns
      • Budgetary restrictions
    • Opportunity Abounds
      • Athletes
      • Brands
      • Schools
      • NIL Entities
      • Advisors

Instructor

Brandon Leopoldus, Esq.

Credit Details

Course Type

Course Instructor

Brandon Leopoldus, Esq.

Original Date Of Course

General Credits

1