With state laws looming, many NIL questions remain unanswered
Having name, image and likeness legislation in place around July 1 is crucial because state laws go into effect around that time and that’s why Pete Schoenthal, the CEO of Athliance, is excited about the next few weeks.
The NCAA Div. I Council is expected to meet June 22-23. It’s becoming widely accepted that at that meeting there will be a framework for NIL to get underway - and from there the floodgates for those deals could be opened.
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“The best way for the NCAA to avoid this crisis is to push through the legislation that they leaked in November which is the proposed NCAA NIL legislation which by the way is very strong,” Schoenthal said.
“If they do that and maybe do that for a year, the states will let the NCAA do their thing and rely on the NCAA or they will sit back and see. All of the states with their legislation although there is a prong here and prong there that are different, they’re pretty similar to the NCAA-proposed legislation. What I think is going to happen is we’re starting July 1 in every state at every university.”
Like most things surrounding NIL legislation and how it’s going to be operational at the university level, there are still lots more questions than answers.
The basic framework that most knowledgeable insiders believe is something like a third-party board reviewing each NIL deal to make sure they fall within the boundaries of fair-market value.
For example, a lawyer with ties to Auburn (or pick your school) cannot just pay a current player there $100,000 to do a commercial for that law firm. But if Auburn’s quarterback wants to run a camp and charge $50 per kid to come through and get some pointers, then those micro-deals would certainly be part of NIL.
The opportunities are endless. So are the scenarios in which current players can make money. But recruits cannot be incentivized to attend a certain school for NIL reasons and there will be an oversight committee of some sort to work through all these deals to make sure they meet certain standards. Compliance departments will play a major role as well.
At least, that’s the belief.
A handful of states are trying to implement their own NIL rules which will basically force the Div. I Council to implement something at their meeting later this month.
Schoenthal, whose Athliance software helps compliance departments manage NIL deals for athletes, said review boards and compliance departments will be crucial overseers in NIL deals. It’s all happening - and it could start happening fast.
“If an athlete gets an opportunity there will be certain things that must be disclosed to the NCAA and if there is an issue with some of those deals then there will be consequences,” Schoenthal said.
“You need a review board just like you have in basic tax law. Compliance at the universities will be the gatekeeper on that because they will know the legislation, they know what students have to do. … It’s going to be very important for the universities to know what’s going on and to get the minutiae of those opportunities.”
One hang-up about NIL deals is that universities (or coaching staffs) cannot negotiate NIL deals, cannot put deals together for players and most certainly not recruits and yet the universities will hold some responsibility in making sure their athletes are still compliant in those situations.
It’s a tough needle to thread - and there will be some hiccups along the way as this legislation takes effect.
One question is what exactly will NIL be? Football staffs are building out their social media departments, scaling some NIL divisions to promote their athletes and partnering with brand experts.
Schoenthal understands those moves to cover bases but thinks more deals will be of the micro variety. Others in the NIL space have definitely disagreed with that.
“There has been a lot of smoke out there that marketing and branding is the most important faction of NIL and I disagree with that,” Schoenthal said. “The way I see NIL going is athletes are going to sign up for either third-party marketplaces … or 90 percent of these deals kids will get Twitter DMs or Facebook messages, moms and dads will be approached, and eventually schools will educate their athletes.
“I’ve paid for a lot of the SEO, I’ve paid for the better Web sites and to make my Instagram look better. That’s not what really gets me more cases as a lawyer. Opportunities are going to come from back home where you’re a superstar. All that branding and building your brand, realistically all these deals are going to be micro-deals.
“What’s getting lost is everyone thinking of Trevor Lawrence and Justin Fields but that’s the one percent of the opportunities.”
That might be the case. That might not be. When it comes to NIL, no one is exactly sure just yet.