Flag on the Play: 2023 NIL Wrapped | BakerHostetler

Reviewing the Major Plays of 2023

This past year saw major developments in the world of college sports. From challenges to name, image and likeness (NIL) contracts[1] to congressional hearings[2] to proposed NCAA guidelines,[3] 2023 set the field for a new year ripe for resolution and possibly more challenges.

Major questions include whether college athletes should be considered university employees, what role Title IX can, and should, play in the context of NIL contracts, and how college sports will evolve to accommodate new regulations and guidelines for players, teams, schools and advertisers. How and whether antitrust exceptions may apply to these new rules also remain open questions. Guidelines are still largely made up of a patchwork of state laws and university policies. While federal legislation seems closer now than ever before, a unified approach on how to handle NIL issues is still far from reach, and federal legislators still appear reluctant to step in until stakeholder institutions have determined a unified approach.

In early December, NCAA President Charlie Baker proposed rules to allow schools to directly enter into NIL deals with their athletes. These rules, if implemented, would create a subdivision of Division I (DI) schools that would be allowed to create their own set of procedures and rules for recruiting, transfers and roster size, among other policies. Schools in this new tier would be required to set aside a minimum of $30,000 per athlete for at least half of their athletes on an annual basis. The goal would be that the money could be used to help these athletes continue educational pursuits. Payments out of such a fund would be subject to Title IX, requiring equal distribution among men and women athletes.

The proposed rule may be a starting point to curtail “pay to play” deals. It may also have the effect of internalizing collectives so that they exist in-house rather than externally.

Drawing up the Game Plan for 2024

Stakeholders in the NCAA will meet this month to discuss new rules regarding NIL questions and vote on whether to adopt the proposal. The proposal comes as larger revenue-generating sports, like DI basketball and football, consider the possibility of breaking away from the NCAA and creating their own conferences.[4] As the college basketball season heats up and the NCAA’s moneymaking March Madness begins at the end of the first quarter of this year, how the NCAA’s proposed rule will accommodate these sports and their universities will likely come to the fore.

Certain other considerations may include the introduction of a template or universal contract for NIL deals, the effect of NIL deals on a rising risk of sports betting in college sports and the general issue of camaraderie among athletes as schools balance NIL deals with building team chemistry. The impact of NIL deals calls into question the place of amateurism in college sports and even pulls high school sports into the mix as states propose guidelines for NIL deals with high school athletes.

Resolving certain questions related to NIL will also require determining whether the NCAA will receive legislatively enacted antitrust protection, an exemption it has long pursued. Antitrust exemptions are not entirely unheard of, as famously exemplified by Major League Baseball, but recent court decisions have held that antitrust rules apply to the NCAA without exception.[5]

As 2023 may very well have signaled headwinds in the world of college sports, 2024 is shaping up to answer some questions while raising others. Still, the focus on the negative impact of NIL may be overshadowing the positive impact that NIL deals can have on community service and advocacy projects. It may also be worthwhile to note that NIL deals may provide women athletes, whose sports are often overlooked and underfunded, an opportunity to even the playing field and build and profit from their own markets. 

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