College athletes in five states will be allowed to enter into endorsement deals as of July 1, 2021, but there will be limitations on the types of companies and contracts that they are able to execute and deliver upon. On May 10, I looked at the name, image, and likeness (NIL) laws in Florida, Alabama, Mississippi, Georgia, and New Mexico to determine what types of conflicts may exist for third-party service providers. But what about the athletes themselves? Do they need to worry about possible conflicts before negotiating deals with brands?
Florida’s NIL law says:
An intercollegiate athlete may not enter into a contract for compensation for the use of her or his name, image, or likeness if a term of the contract conflicts with a term of the intercollegiate athlete’s team contract. A postsecondary educational institution asserting a conflict under this paragraph must disclose each relevant contract term that conflicts with the team contract to the intercollegiate athlete or her or his representative.
Thus, as long as no terms of the athlete’s contract with a brand conflict with any terms of the team’s contracts, then there should be no issue. This does not restrict an athlete from engaging with a brand that is a competitor of another brand partnered with the university. Instead, it is very fact-specific to the actual terms of the contract. Thus, if the University of Florida’s contract with Jordan Brand only requires that athletes wear Jordan Brand apparel on the field, then there seemingly would be no violation of the law should an athlete at the school separately sign a contract with Puma and post content on Instagram, taken from the athlete’s dorm room, showing off his latest Puma apparel. Importantly, the law puts the burden on the school to explain what terms are in conflict.
Next, Alabama’s NIL law states:
Except with the prior written consent of the postsecondary education institution, a student athlete may not enter into a contract for compensation for the use of the student athlete’s name, image, or likeness if the institution determines that a term of the contract conflicts with a term of a contract held by the student athlete’s postsecondary education institution.
Similar to Florida’s law, Alabama’s law requires that a term of the athlete’s contract conflicts with a term of the school’s contract for there to be an issue. However, Alabama’s law lacks the requirement that the school discloses the terms causing the conflict.
Alabama’s law goes a bit further than Florida’s law in that it also specifically prohibits athletes from entering into contracts with any alcoholic beverage company or brand, any seller or dispensary of a controlled substance, any adult entertainment business, any casino or entities that sponsor or promote gambling activities, and any entity or individual that, in the reasonable and good faith judgment of the postsecondary educational institution, negatively impacts or reflects adversely on the postsecondary educational institution or its athletic programs. A school is also able to prohibit an athlete from wearing any shoes or apparel while competing in athletic competitions.
Georgia’s NIL law contains a similar provision to Florida:
A student athlete shall not enter into a contract providing compensation to the student athlete for use of the student athlete’s name, image, or likeness if a provision of such contract is in conflict with the student athlete’s team contract. A postsecondary educational institution asserting a conflict … shall disclose to the student athlete or the student athlete’s representative the relevant provisions of the contract that are asserted to be in conflict.
However, Georgia’s law is a bit vaguer in that it does not say that the terms of the athlete’s contract cannot be in conflict with the terms of the team’s contract. It only says that if it is generally in conflict with the team’s contract then it is prohibited. That said, clarity appears to be provided in the second sentence with the requirement that the school provides the specific provisions of the contract at issue.
Moving on to Mississippi’s NIL law, it says:
A third-party licensee may not enter into, or offer to enter into, a name, image and likeness agreement with a student-athlete or otherwise compensate a student-athlete for the use of the student-athlete’s name, image and likeness rights if a provision of the name, image and likeness agreement or the use of the student-athlete’s name, image and likeness rights conflicts with a provision of a contract, rule, regulation, standard or other requirement of the postsecondary educational institution unless such contract or use is expressly approved in writing by the postsecondary educational institution.
It is interesting that the sponsors of this legislation decided to direct the prohibition to third parties as opposed to athletes. It appears to put the burden on the brands, which may not have a true appreciation for whether their offers to athletes conflict with any contract, rule, regulation, standard, or other requirements of the school. Furthermore, this language is quite broad and seems to allow universities to pick and choose which contracts are prohibited. What exactly is a school’s “standard” and how does one have an appreciation for an “other requirement of the postsecondary educational institution?”
Similar to Alabama, Mississippi has set aside certain types of brands that are off-limits. Athletes cannot engage with companies to endorse or promote “gambling, sports betting, controlled substances, marijuana, tobacco or alcohol company, brand or products, alternative or electronic nicotine product or delivery system, performance-enhancing supplements, adult entertainment or any other product or service that is reasonably considered to be inconsistent with the values or mission of a postsecondary educational institution or that negatively impacts or reflects adversely on a postsecondary education institution or its athletic programs.”
Finally, New Mexico’s NIL law is the most lenient of the bunch:
A third party shall not offer a student athlete a contract to provide compensation to the student athlete for use of the student athlete’s name, image, likeness or athletic reputation that requires a student athlete to advertise for the sponsor in person during official, mandatory team activities without the approval of the student athlete’s post-secondary educational institution.
No mention of potential conflicts with existing contracts by and between universities and third parties.
Overall, the five states set to offer athletes the right to earn money from their NIL do not have oppressive restrictions when it comes to school contracts that may be deemed in competition with the deals athletes are looking to procure. The overriding concern seems to be that athletes do not enter into arrangements with deliverables that would directly conflict with the terms of the deals that schools have in place with other brands. Certainly, there does not seem to be any issue for a player to endorse a product or service that the school is also supporting.
Darren Heitner is the founder of Heitner Legal. He is the author of How to Play the Game: What Every Sports Attorney Needs to Know, published by the American Bar Association, and is an adjunct professor at the University of Florida Levin College of Law. You can reach him by email at [email protected] and follow him on Twitter at @DarrenHeitner.