Ohio’s NIL law and what it means for your campus

The summer slowdown has proven particularly elusive for campus athletics and compliance departments, not to mention general counsel. In a last minute move to salvage what started as a bipartisan legislative effort, Ohio Governor Mike DeWine signed Executive Order 2021-10D, which allows Ohio’s college athletes to monetize their name, image, and likeness (NIL).

Not to be outdone – or perhaps to level the playing field for states without NIL laws – the National Collegiate Athletic Association (NCAA) Division I Board of Directors voted to adopt an interim policy that suspended amateurism rules pertaining to NIL, though the rules prohibiting pay-for-play and impermissible inducements remain in effect. Similarly, the National Junior College Athletic Association (NJCAA), during its June 2021 Board of Regents meeting, voted to pass a bylaw to promote and provide opportunities for its student-athletes regarding NIL. While both the NCAA’s interim policy and the NJCAA’s bylaw are critical components to your overall NIL compliance efforts, our focus here is on the executive order and its impact on your campus. 

The key takeaways from the executive order:

• Compensation (defined broadly) earned from a student-athlete’s NIL shall not affect that student-athlete’s scholarship eligibility or renewal;

• Student-athletes are permitted to engage professional representation regarding NIL opportunities;

• Student-athletes cannot enter into contracts that require them to display a product, or advertise for a sponsor, during official team activities or certain other times, if that requirement conflicts with a provision of a contract to which the institution is a party;

• Student-athletes must disclose proposed NIL contracts to the institution for review and, in the event of a conflict, the institution must communicate the conflict to the student-athlete so as to allow the student-athlete an opportunity to renegotiate the proposed contract;

• Institutions are permitted to establish reasonable policies or standards to address a student-athlete’s failure to disclose a proposed NIL contract;

• Institutions (as well as athletic associations, conferences, groups or organizations with authority over intercollegiate athletics) may prohibit a student-athlete from entering into an NIL contract if the contract is associated with controlled substances, adult entertainment, casinos or entities that sponsor or promote “gambling activities;”

• Institutions are not obligated to “identify, create, facilitate, negotiate, or otherwise enable” NIL opportunities for student-athletes;

• Student-athletes are not afforded any right to use an institution’s name, trademarks, service marks, logos, symbols or “any other intellectual property regardless of whether the intellectual property is registered with the appropriate authority.”

Where does this leave institutions? In a single word: busy. Particularly as the fall athletic season draws nearer and recruiting efforts for future student-athletes heat up. The executive order serves as a guidepost, but it can’t stand alone as an institution’s policy. As you are putting your policy together consider the following:

• Given the expected growth in the NIL space, what resources is your institution able to commit to this area? Can personnel be dedicated, or cross-trained, to assist in maintaining compliance?    

• The executive order requires proposed verbal or written NIL agreements to be routed through the institution. What process are you going to utilize to review such agreements? Is a third-party platform necessary, or beneficial?

• Conflicts between institutional and proposed student-athlete NIL contracts are inevitable. However, spotting a potential conflict requires a familiarity with existing institutional agreements. Take time to review your agreements before a proposed NIL agreement is sent your way because student-athletes may need to move quickly to secure an offer.

• If conflicts between institutional and proposed student-athlete NIL contracts appear likely (e.g., the institution has a beverage vending or pouring rights agreement with a particular brand), consider making that clear in your policy and educating your student-athletes on how to navigate the conflict.

• Beyond contractual conflicts, an NIL policy will touch on other institutional policies (e.g., social media usage, code of conduct, etc.). Identify those touchpoints early to avoid making important decisions on the fly. 

• What restrictions, if any, will you put in place to secure your institution’s intellectual property and, as important, how will you approach violations by your student-athletes? How have you handled intellectual property violations in the past?

• The executive order restricts a student-athlete’s ability to associate, for NIL purposes, with certain industries or companies (e.g., adult entertainment, casinos, controlled substances, etc).  How will violations be handled on campus?

Beyond these considerations, consider that the biggest investment that NIL is going to require is a regular, ongoing educational component for student-athletes, coaches, athletic department staff and boosters. As each stakeholder brings a unique perspective to the NIL discussion, each will require a thoughtful and continuous dialogue as to the nuances of how NIL impacts their relationship with the institution. 

The bottom-line is, NIL may be in its infancy but it’s here to stay. One need only look to the NIL agreements that have been signed already to see the tremendous impact that this is having on student-athletes, institutions and brands. As a result, the next few weeks are critical to driving toward compliance by assembling your NIL team, drafting or fine tuning your policies and ramping up your educational offerings.

Bricker's Higher Education team will stay current on all aspects of NIL, from monitoring potential federal legislation to policy development and compliance issues.