NCAA rules take effect allowing student-athletes to cash in on endorsements, sponsorships

The NCAA Division I board of directors approved groundbreaking name, image and likeness rights for student-athletes Wednesday, ushering in a new era in college athletics that provides players with the ability to make money through endorsement deals.

The rules went into effect Thursday. Some athletes had already lined up endorsement deals or trademarked logos in anticipation of the changes.

The governing bodies in Divisions I, II and III approved the rights for student-athletes after the NCAA’s Division I Council on Monday recommended breaking from its long-standing policy on amateurism. The new guidelines don’t cross over into pay-for-play territory and leave much of the implementation to individual schools and conferences.

There was a rush for the NCAA to implement some baseline guidance regarding athletes profiting off their names, images and likenesses (NIL). Several state laws went into effect Thursday, and the NCAA’s Division I Council sought to create a stopgap ruling until federal legislation or new NCAA rules could be implemented.

“This is a seismic shift in the landscape, just simply because this was something that was not made available to student-athletes before,” said Damon Evans, the athletics director at the University of Maryland. “This is a change, but we’re moving in the direction that we should be moving in.”

Under the guidelines, college athletes “can use a professional services provider for NIL activities,” the NCAA said. Athletes must report their NIL activities to their schools, and colleges are responsible for determining whether the activities are consistent with state laws.

“This is an important day for college athletes since they all are now able to take advantage of name, image and likeness opportunities,” NCAA President Mark Emmert said in a statement. “With the variety of state laws adopted across the country, we will continue to work with Congress to develop a solution that will provide clarity on a national level. The current environment — both legal and legislative — prevents us from providing a more permanent solution and the level of detail student-athletes deserve.”

The interim policy from the NCAA doesn’t allow NIL compensation contingent on enrollment at a particular school, nor does it allow for compensation for athletic participation and achievement, or when a deal isn’t carried out.

Athletes can earn money in a variety of ways, including endorsement deals, private lessons, and autograph and merchandise sales. Social media could be a major asset for some athletes. Paige Bueckers, a UConn women’s basketball star, has 829,000 followers on Instagram, and Maryland quarterback Taulia Tagovailoa has 124,000 followers.

Schools can impose limitations on NIL arrangements.

“There may be certain things that are against our institutional values, and the values that you have to uphold as being a member of our team,” Mr. Evans said. “So there are some things that are not permissible from that perspective, so we’ll lay those out in our guidelines.”

Martin Conway, a sports industry management professor at Georgetown, said some tension will lie in group licensing versus individual licensing.

Under Armour is an apparel partner of Maryland. It remains to be seen whether athletes will be restricted to companies that already have established deals with their institutions.

“Part of the regulatory frameworks that are developed, either at the conference level or at the university level, that says, ‘OK, here’s our framework. You can go out and do whatever you want within this framework,’” Mr. Conway said. “And the framework may say, ‘Here’s our sponsors, and you can’t compete with those.’”

Twenty-four states have enacted NIL laws, and 14 of them have legislation that took effect Thursday, Sports Illustrated’s Ross Dellenger said. To avoid an unfair advantage for athletes in states that haven’t enacted NIL laws, the NCAA’s temporary measures allow athletes in all 50 states to profit from endorsement deals and other approved avenues.

In states without laws in place, institutions and conferences must create their own guidelines.

“Everybody doing their own thing, or certain states having laws in effect, that could create an unlevel playing field, because what some people will do and others will do could be very different,” Mr. Evans said. “I hope so, at some point in time, we’re able to get something that creates that level playing field. But there’s going to be some advantages for some and some disadvantages for others.”

The inequality could come into play during recruiting, although “the new policy preserves the fact college sports are not pay-for-play,” said a statement by Division II Presidents Council Chair Sandra Jordan. But if one school offers more robust endorsement opportunities, that could play a role in a recruit’s decision process.

“I think this is another dimension on which schools, athletic departments and coaches will compete in terms of recruiting and acquisition of players,” Mr. Conway said. “Each university, so they choose, will say, ‘We have an aspect of our athletic department, resources, people, to help you do this. Both to reach the value, but also to do it within the rules.’”

Highlighting the fine line between providing assistance and a pay-for-play setup, the NCAA allows schools to help athletes find NIL partnerships but doesn’t encourage the practice. NIL agreements with boosters are also allowed as long as “the activity is in accordance with state laws and school policy, is not an impermissible inducement and it does not constitute pay-for-play,” a release read.

Wisconsin quarterback Graham Mertz on Monday became the first college athlete to announce a trademark concept. Boomin Iowa Fireworks announced that Iowa basketball player Jordan Bohannon would sign autographs and raffle off memorabilia at an event Thursday.

Maryland has long prepared for NIL procedures. In February, it announced a program called Momentum in partnership with Opendorse, an athlete marketing company. Mr. Evans said the first step in College Park will be educating the student-athletes on what is allowed under the NIL rules while providing financial literacy. The athletic department will distribute the university’s NIL guidelines to student-athletes in the “near future,” Mr. Evans said.

The ruling to allow college athletes to profit off their names, images and likenesses was expected as pressure grew in recent years. California pushed the NIL opportunities into focus with the Fair Pay to Play Act in 2019. Many states have followed. The Supreme Court last month ruled in favor of athletes in NCAA v. Alston, a case that focused on education-related benefits for athletes.

The NIL ruling Wednesday seems to be an inevitable result of that pressure, breaking the NCAA’s long-held resistance.

“From where I sit, I’m not surprised at where we are today,” Mr. Evans said. “We all knew it was coming, and if we didn’t, then we’re blind. But I think what we have to do is embrace the change and understand where we are today but anticipate future changes coming.”