What is All the Hype Around Name, Image, and Likeness in Virginia's College Sports?: An Introduction to Virginia NIL Laws

If you have watched any college sports during the 2021-2022 season, then you probably have heard the term “Name, Image, Likeness” (“NIL”) on repeat. But what is all the hype around NIL in college sports and why now?

Before the 2021-2022 season, college athletes could get severely punished for receiving compensation in connection with use of their NIL. For example, college athletes could have an award revoked, program wins could be vacated, or the athlete could become ineligible to play their sport. But the 2021-2022 season marks the first athletics season when college and high school athletes in Virginia, and around the country, can make money from use of their NIL. As long as the college athletes follow their state’s rules and the NCAA’s rules, they can profit off of their NIL, without the fear of losing eligibility.

In this new age of college athletics, individual athletes, position groups, and entire teams have already inked deals with benefits ranging from meals to seven-figure compensation. Some individual athletes inked million-dollar deals, such as Quinn Ewers with GT Sports Marketing and D.J. Uiagalelei with Dr Pepper.[i] While these million-dollar deals have been in the headlines, lots of other deals are being made. For example, the Virginia Tech football team’s offensive line entered a NIL deal with Mission Barbeque to get a weekly meal in exchange for social media advertising.[ii] Welcome to the new normal for college athletics.

With all this talk in the media about NIL, lots of questions have come up. What does NIL really mean? What is all the recent hype about NIL and why was it banned before 2021? What are Virginia’s NIL laws? What is the significance of NIL for high school and college athletes in Virginia? This article will answer these questions and more to bring you up to speed on all things NIL in Virginia.

WHAT DOES NAME, IMAGE, AND LIKENESS MEAN IN VIRGINIA?

NIL basically means all things related to one’s identity, such as their name, picture, appearance, or signature. In the law, NIL does not just apply to college athletes, it applies to everyone. In the context of college sports, the term NIL refers to a student-athlete’s ability to use their NIL to earn compensation, subject to limitations depending on where their college is located.

Legally, NIL is a generic term that refers to an individual’s privacy right to be free from unwanted publicity of their NIL (identity) being used for commercial purposes, such as selling a product or service.[iii] Although NIL laws are different in every state, in general, if a person’s NIL is used for commercial purposes without the person’s permission, the person can file a lawsuit to win money damages against anyone who uses their NIL without permission. The ability to sue someone in this context is a type of lawsuit called “appropriation of NIL.”

A classic example of NIL is Michael Jordan endorsing the cereal Wheaties by getting paid to have his name, picture, and signature on the cereal box. General Mills, the owner of Wheaties, had to pay Jordan for the use of his NIL on the Wheaties box. But if General Mills had used Jordan’s identity without his permission, Jordan could have sued General Mills in court for appropriation of his NIL. The specific rules in an appropriation of NIL lawsuit, such as this, would be different in every state.

Turning to the NIL laws in Virginia, appropriation of a person’s NIL means using one’s “name, portrait, or picture” without written permission for commercial purposes of advertising or trade.[iv] Although the text of Virginia’s NIL law does not have the word “likeness,” Virginia courts have ruled that Virginia’s NIL law protects a person’s identity, which includes their likeness.[v] The NIL right in Virginia does not protect use of one’s NIL in a news story or matter of public concern.[vi]

Virginia’s NIL law has been around since at least 1950.[vii] Since 1950, Virginia college athletes could technically have been compensated for use of their NIL under Virginia law; however, the National Collegiate Athletic Association (“NCAA”) rules, policies, and bylaws effectively prevented Virginia college athletes from being compensated, as explained next.

NCAA: A BRIEF HISTORY ON AMATEURISM AND WHY NIL WAS BANNED IN COLLEGE SPORTS BEFORE 2021

Colleges and the NCAA generate hundreds of millions of dollars every year from college sports, specifically men’s basketball and football.[viii] But as the governing and enforcing body for collegiate athletics since 1942, the NCAA prevented student-athletes from cashing in.[ix]

The NCAA has long relied on the principle of “amateurism” to justify not allowing college athletes to be compensated “beyond the fixed value of their scholarships.”[x] Under NCAA policies, “‘an amateur student-athlete is one who engages in athletics for the education, physical, mental and social benefits he derives therefrom, and to whom athletics is an avocation.’” [xi] “Avocation” is a fancy word for hobby. The NCAA then used the term “amateur status” as an eligibility requirement. A college athlete who received “pay in any form” for playing their sport would lose their amateur status, which meant a loss of their scholarship and eligibility to play.[xii] The NCAA’s extremely harsh penalties deprived college athletes the opportunity to “earn money based on their incredible abilities.”[xiii]

From 1984 to 2021, the NCAA relied on a 1984 United States Supreme Court (“Supreme Court”) case to justify all the NCAA’s policies, including the NCAA’s policies on amateurism. Several universities challenged the NCAA’s television-rights policies in court based on antitrust laws. “Antitrust law” is a set of laws that regulates the behavior of businesses to protect competition in the free market.[xiv]

In the 1984 Supreme Court case, the colleges who challenged the NCAA did so on antitrust principles, arguing that the NCAA’s exclusive control of college football television rights raised prices for consumers.[xv] This 1984 challenge to the NCAA made it all the way to the Supreme Court and the NCAA won the lawsuit, cementing its policies. One comment made in the Supreme Court’s opinion was that: “[t]he NCAA plays a critical role in the maintenance of a revered tradition of amateurism in college sports . . . [and the NCAA] needs ample latitude to play that role.”[xvi] In all reality, this particular comment was “dicta,” which means the comment was not a rule of law and that other courts did not have to follow the comment. But the NCAA basically relied on the Supreme Court’s comment to argue the NCAA should receive favorable treatment under antitrust laws. The NCAA then doubled down on their amateurism policies of not allowing NIL compensation for student-athletes.

Over the next roughly 40 years, the NCAA’s amateurism rules faced harsh criticism and many lawsuits, but the Supreme Court did not address the NCAA’s rules under antitrust laws again until 2021. On June 21, 2021, the Supreme Court issued the opinion in NCAA v. Alston, which finally addressed the NCAA’s rules under antitrust laws.[xvii] In the Alston case, the Supreme Court ruled that the NCAA should not receive favorable treatment under the antitrust laws. Although the Alston case did not directly involve the NCAA’s NIL and amateurism policies, the Supreme Court gave a harsh warning to the NCAA that many of their policies could be in violation of the antitrust laws.

The Supreme Court’s warning to the NCAA is generally considered the main reason why the NCAA began to change their NIL and amateurism policies. Although the NCAA had apparently worked on an updated NIL and amateurism policy since at least October 2019, the NCAA ended up releasing an interim NIL Policy less than two weeks after the Supreme Court issued the Alston opinion.[xviii] The NCAA’s interim policy, which went into effect July 1, 2021, lifted the NCAA’s ban on NIL, allowing college athletes to be compensated for NIL without losing eligibility, marking a new dawn for college athletes.[xix] Strict NCAA policies still remain on compensation regarding athlete recruitment and “pay for play” (earning money for performance in a sport, such as scoring points).[xx]

It is important to note that the NCAA’s interim NIL policy is only temporary and will remain in effect until the NCAA changes its policies or federal laws are passed to address NIL. For now, individual schools and conferences must set the rules regarding NIL for their students and must comply with their state’s NIL laws.[xxi]

WHAT ARE VIRGINIA’S NIL LAWS FOR STUDENT-ATHLETES?

Virginia passed NIL laws for college athletes so that Virginia could remain competitive against other states in attracting student-athletes from across the country and world. With many states previously set to have NIL laws become effective July 1, 2021, universities from across Virginia wrote a joint letter to Governor Northam and the Virginia General Assembly to request urgent passage of Virginia NIL laws for student-athletes.[xxii] Virginia’s NIL laws for student-athletes were passed on August 10, 2021.[xxiii] The Virginia NIL law for collegiate athletes has several important provisions:

(1) student-athletes can legally earn compensation for use of their NIL;
(2) student-athletes can hire agents and attorneys to represent them;
(3) colleges in Virginia cannot prohibit student-athletes from receiving NIL compensation; and
(4) colleges in Virginia cannot “declare ineligible for competition or reduce, cancel or not renew an athletic scholarship because a student-athlete earns” NIL compensation. [xxiv]

While the right for Virginia student-athletes to profit off their NIL is monumental, there are many limitations this new law places on a student athlete’s ability to be compensated for their NIL. Student-athletes are not allowed to be compensated for endorsing certain categories of products or services such as gambling, drugs and alcohol, adult entertainment, and weapons.[xxv]

Colleges can impose further limitations on the rights of their student-athletes to be compensated for their NIL. For example, a student-athlete cannot use their school’s logos, facilities, uniforms, and other intellectual property without the school’s permission.[xxvi] Each college is also free to make rules requiring their student-athletes to disclose all of their deals.[xxvii]

The Virginia NIL law for student-athletes is only in place for the 2021-2022 athletics season and is set to expire in June 2022. It is possible that the United States Congress could pass NIL legislation, or the NCAA could pass a permanent NIL policy. Either of those possibilities could drastically change the NIL landscape for student-athletes in Virginia and throughout the country.

THE FUTURE OF STUDENT-ATHLETE NIL IN VIRGINIA

This new Virginia NIL law for student-athletes opens the door for athletes in Virginia to “flex their entrepreneurial muscles” by monetizing unique opportunities.[xxviii] An athlete could sign an endorsement deal, get paid for autographs, start their own business, or run a youth sports camp, all without the fear of losing their eligibility. Individual players, and even entire teams and position groups, have already landed NIL deals. Student-athletes in nearly all sports, not just football and men’s basketball, are also landing deals.

The door is now open for athletes to begin earning compensation for use of their NIL in high school or earlier! With easy access to companies on social media, high school athletes have already started working with businesses around Virginia. At least one prominent high school quarterback in California has already cashed in on a four-figure endorsement deal.[xxix] It is only a matter of time before Virginia high school athletes begin to cash in on similar deals.

Since Virginia NIL has only been around for a few months and this is the first season of NIL in colleges, there are many unknowns about NIL. Will a Virginia college athlete be able to land deals with Virginia businesses located outside of where their college is? Can college athletes outside of football and men’s basketball land profitable deals? How much are NIL deals really worth for businesses? How much can an endorsement from a high school athlete benefit a business? What is the best school in Virginia for an athlete to maximize NIL profitability? What happens to an NIL deal if the athlete is injured?

Now that you are up to speed on Virginia NIL laws, stay tuned for future blog posts answering these questions and more regarding Virginia NIL.

Ross Broudy is a Pender & Coward attorney focusing his practice on civil litigation, construction law and local government matters.

[i] See Tom VanHaaren, Ohio State Buckeyes QB Quinn Ewers has NIL deal for $1.4 million, source says, ESPN (Aug. 31, 2021), https://www.espn.com/college-football/story/_/id/32120440/ohio-state-buckeyes-qb-quinn-ewers-nil-deal-14-million-source-says; Ross Dellenger, An NIL First: Clemson Quarterback D.J. Uiagalelei to Star in De Pepper National Ad Campaign, Sports Illustrated (Aug. 11, 2021), https://www.si.com/college/2021/08/11/clemsons-dj-uiagalelei-to-profit-from-nil-in-dr-pepper-ad-campaign.

[ii] Mike Niziolek, Sitting down at the dinner table with Virginia Tech’s entire offensive line, The Roanoke Times (Oct. 9, 2021), https://roanoke.com/sports/college/va_tech/sitting-down-at-the-dinner-table-with-virginia-tech-s-entire-offensive-line/article_afc4a590-23c1-11ec-a806-9776b50550f5.html.

[iii] See Restat. 2d of Torts, § 652C; 16 M.J. RIGHT OF PRIVACY § 1 (2021); Lavery v. Automation Mgmt. Consultants, Inc., 234 Va. 145, 154, 360 S.E.2d 336, 342 (1987).

[iv] Va. Code § 8.01-40.

[v] Lavery, 234 Va. at 154 (interpreting Va. Code § 8.01-40).

[vi] See Williams v. Newsweek, Inc., 63 F. Supp. 2d 734, 736 (E.D. Va. 1999) (applying newsworthy and matters of public interest exceptions to Va. Code § 8.01-40).

[vii] Va. Code § 8.01-40.

[viii] Ryan Maher, Turnover on Downs: How the NCAA’s Mishandling of Student-Athlete Compensation has Punted the Ball to State and Federal Legislators, 51 U. Balt. L.F. 41, 55 (2020).

[ix] Id. at 44; David A. Grenardo, The Continued Exploitation of the College Athlete: Confessions of a Former College Athlete Turned Law Professor, 95 Or. L. Rev. 223, 224-225 (2016).

[x] Grenardo, 95 Or. L. Rev. at 258.

[xi] Waldrep v. Tex. Emplrs. Ins. Ass’n, 21 S.W.3d 692, 701 (Tex. App. 2000) (quoting NCAA Manual); see 2015-16 NCAA Manual, at p. 18 Rule 2.9, http://www.ncaapublications.com/productdownloads/D116.pdf.

[xii] 2015-16 NCAA Manual, at p. 75 Rule 12.1.2, http://www.ncaapublications.com/productdownloads/D116.pdf.

[xiii] Grenardo, 95 Or. L. Rev. at 233.

[xiv] See U.S. Dept. of Justice, Antitrust Enforcement and the Consumer, https://www.justice.gov/atr/file/800691/download.

[xv] Nat’l Collegiate Athletic Ass’n v. Bd. of Regents, 468 U.S. 85, 119, 104 S. Ct. 2948, 2970 (1984).

[xvi] Id. at 120.

[xvii] 141 S. Ct. 2141 (2021); see 10 Federal Antitrust Law § 74.10 (2021).

[xviii] Michelle Brutlag Hosick, NCAA adopts name, image and likeness policy, NCAA.org (June 30, 2021), https://www.ncaa.org/about/resources/media-center/news/ncaa-adopts-interim-name-image-and-likeness-policy.

[xix] See Interim NIL Policy, NCAA.org, http://ncaaorg.s3.amazonaws.com/ncaa/NIL/NIL_InterimPolicy.pdf.

[xx] Laura A. Ahrens and Gregg E. Clifton, “Game On” for College Athlete Compensation Changes at State and Federal Levels, 33 S. Carolina Lawyer 53, 58 (Sept. 2021).

[xxi] Id.

[xxii] Maggi Marshall, Virginia universities ask Northam for athletes to be paid for name, image, likeness, WSET ABC 13 News (June 16, 2021), https://wset.com/news/local/virginia-universities-ask-northam-for-athletes-to-be-paid-for-name-image-likeness.

[xxiii] 2021 Special Session II, Summary of Virginia HB 7001, https://lis.virginia.gov/cgi-bin/legp604.exe?213+sum+HB7001.

[xxiv] 2020 VA. HB 7001(18)(a)(3) (2021); see id.(25) (stating the NIL laws expire at midnight on June 30, 2022), https://lis.virginia.gov/cgi-bin/legp604.exe?213+ful+CHAP0001.

[xxv] 2020 HB 7001(18)(d).

[xxvi] Id.(g).

[xxvii] Id.(e).

[xxviii] Id.(18)(a)(4); Jake Nicholson, Name, Image, and Likeness Reform Is Here: The Business Basics, Nat. L. Rev. (July 16, 2021), https://www.natlawreview.com/article/name-image-and-likeness-reform-here-business-basics.

[xxix] Dan Murphy, High school football player Jaden Rashada signs endorsement deal with recruiting app, ESPN (December 21, 2021), https://www.espn.com/college-football/recruiting/story/_/id/32916770/high-school-football-player-jaden-rashada-signs-endorsement-deal-recruiting-app.

Article originally published on Pender & Coward website on December 27, 2021.