It finally happened, and it is long overdue.
“The NCAA is not above the law” was the final line of Justice Kavanaugh’s majority opinion finding the NCAA’s regulations restricting collegiate athlete compensation to certain types of education-related benefits as a violation of the Sherman Anti-trust Act. The ruling technically has a very limited scope: that universities can in fact offer athletes educational benefits vastly better than simply tuition, such as laptops, paid post-graduate internships, and funding things like tutoring and study abroad. However, due to the competitive nature of recruiting top athletes, universities are bound to get creative when offering these “education-related benefits” to their athletes. This decision was always likely to lead to more. Now, on June 20, 2021, just days after the Supreme Court ruled against them in Alston, the NCAA is recognizing the error of its ways (or at least realizing its likely to lose future cases) and altering its rules to allow athletes to profit off their name, image, and likeness.
For decades universities have profited off student athletes, generating millions in revenue annually from television contracts, ticket sales, alumni donations, and licensed apparel while the NCAA rules continued to deny those same athletes the ability to profit off their name and likeness. Not only does the new rule have huge implications for the athletes themselves, who can now pursue sponsorship deals, online endorsements and personal appearances without risking harming their careers or images (see Reggie Bush; see also Baker Mayfield), this is a great opportunity for businesses that want to get involved. In the age of social media and the internet, companies can have reach well beyond what they were previously able. However, hiring spokespeople to endorse goods or services, especially well-known ones, can get expensive quickly. Now that these young talented athletes can start making money for themselves, they are likely to be on the lookout for companies with great products and services willing to pay them for a shout-out. A lot of these athletes do not have huge national followings, but around the area of the university or the students of these schools themselves, have a huge amount of influence. We’ve already seen this with companies like Barstool Sports, who, almost immediately following the announcement, started sponsoring “Barstool Athletes”. This not only put the company’s name out there, but also builds positive publicity as a company that is willing to support student athletes. It’s a win-win!
All this is well and good, but where can it all go wrong? Although it may now be oaky to hire these athletes as spokespeople for your brand, brands still need to be careful. Many websites and social media platforms have convoluted terms of service that could cause issues if not followed perfectly. Having a post removed, or an account suspended for violating these terms is a waste of both time and money for the company. Additionally, the NCAA rules contain specifics on what is and is not okay for the athletes to undertake. A brand that gets an athlete in hot water for not following these rules could end up with more negative publicity than positive. Properly understanding and expertly navigating these rules and regulations is imperative for both brand and athlete. A worse situation still, the relationship between the two goes sour, and the parties want to go their separate ways. That is where a solid contractual agreement cannot be overlooked. An agreement that determines everything from who gets paid what, when, what can and cannot be said or done, and protects both the intellectual property and the integrity of the company and the athlete is integral in avoiding negative publicity and expensive litigation for both parties.
Hiring a group of attorneys that understand your business, what you are trying to accomplish, know the law, and will work to protect both parties from all problems that can arise from these types of business arrangements is absolutely necessary. At Larson Law, that is the exact type of personal attention we provide. If you are a business owner with a great product or service and would like to get started on developing a marketing relationship with these athletes or drafting contracts to protect both your business and them – reach out to us at 617-932-6169 and let’s get started!