Addressing NIL recruiting issues at the collegiate level

When the first states announced they would allow student athletes to capitalize on their name, image and likeness (NIL), there was discussion on whether institutions within these states would have a recruiting advantage over colleges and universities in states without such laws. On July 1, 2021, the National Collegiate Athletic Association (NCAA) suspended its NIL rules, allowing all collegiate athletes to profit from their NIL regardless of whether legislation had been signed or taken effect at the state level.

This move by the NCAA helped level the playing field in some ways, but there is no denying that NIL is altering athletic recruiting at the collegiate level. With greater opportunities to earn money, top recruits, who in previous years may have pursued a professional athletic career out of high school or before depleting their collegiate eligibility, might give greater consideration to a full collegiate career. Top talent and those looking to maximize on their athletic reputation may look more favorably at states and institutions without NIL rules or with more lenient provisions than those with requirements that are more restrictive.

Institutions may use their NIL policies to their advantage but the degree to which they can be used for recruiting purposes has limitations.

Compliance considerations

The NCAA has a number of bylaws that govern recruiting activities in order to promote “a fair recruiting environment that limits intrusions into the lives of student athletes and their families.” There are rules around who can be involved in recruiting activities, when recruiting activities can occur and the conditions under which recruiting activities may take place.

The NCAA’s interim NIL policy upholds prohibitions on pay-for-play and impermissible recruiting inducements and does not allow NIL compensation contingent on enrollment at a particular institution. When recruiting a prospective student athlete, a coach may share what NIL deals other members of the team have closed and how the institution has helped student athletes maximize their NIL earning potential. However, coaches cannot guarantee NIL deals to a prospect without violating the NCAA’s interim policy.

Group licensing deals

Other than a few requirements, the limited guidance from state regulations and the NCAA’s interim policy leave much of the NIL landscape up for interpretation. This opens the door for opportunities for such as group licensing deals sponsored by boosters.

A Michigan State booster recently announced the largest NIL group licensing deal to date, a deal that offers Michigan State football and basketball players $500 per month in exchange for the players’ promotion of his company on social media. Instead of giving the nearly $800,000 in annual payments to the university, this money could go straight into the pockets of the student athletes who opt in.