Over the past couple years, the NCAA, Congress, piecemeal state laws, and high school sports associations, among other governing bodies, have been navigating the murky waters related to student-athletes’ ability to earn compensation through name, image, and likeness (NIL) policies. In the short timeframe since the “amateurism” label was effectively removed by the U.S. Supreme Court via the NCAA v. Alston decision in June 2021, varying state laws and school policies have created an interesting playing field for institutions and student-athletes alike, which has quite literally been changing the game.
NIL will continue to develop at a rapid rate as regulation occurs at a national and state level before they settle. Either way, NIL is here to stay at the areas (college and high school) even though the student-athletes were previously known to be uncompensated. In turn, donors, schools, and student-athletes must be aware of the landscape and how certain NIL deals will be structured. Most importantly, young student-athletes will need to be made aware of the contracts they are signing.
And to complicate things a bit more, developing in parallel with NIL (likely for generations to come) will be the complicated area of Non-Fungible Tokens (NFTs). NFTs are a blockchain technology (a type of digital asset) meant to provide consumers direct ownership of digital and physical items that can represent and authenticate particular items (i.e. videos, GIFs, digital trading cards, music, art, etc.).
In most instances, the student-athletes engaging in these contracts will range in age from minors (signed with the approval of a parent or guardian) to their early 20’s. And, in even more likelihood, the student-athletes will have minimal knowledge of what exactly NFTs are. In the end, it is these student-athletes that are benefiting from the sales of the NFTs featuring their intellectual property and right of publicity.
Take, for example, 13 University of Georgia football players, that have won back-to-back national titles, and were recently featured in a NIL deal involving NFTs. Or highly touted University of Texas quarterback, Arch Manning, who entered the largest NIL deal ($102,500.00) with Panini America, a trading card company for an exclusive multiyear partnership, which includes a 1-of-1 Throwback Prizm Autographed card. While Manning’s deal is not an NFT per se, it signifies what we can expect as NIL develops and NFTs technology further unfolds in the future.
NFTs indubitably mark a new and revolutionary way to capitalize on an untapped market. It will be a huge revenue driver for student-athletes. Student-athletes will need to be made aware of how their rights of publicity, intellectual property, and NIL are affected through the use of NFTs in the contracts they enter.
That is where Layer 1 comes into play, whose mission is to create a global stage for incubating and promoting the best blockchain ideas. Education and awareness of what’s happening with NIL and NFTs, and the regulation of same, will be integral for student-athletes to understand what they’re signing up for. The intersection of NFTs and digital assets adds another complex level for the high school and college level student-athletes.
Post Date: August 17, 2023